© LU 5SSION 
FTISHFR 
Professor ALLAIS’ interesting paper makes essentially one empi- 
rical test. The model predicts two items to be fairly constant. One 
of these is y, the capital output ratio, which the theory predicts 
should vary rather weakly, and the other is 6, which the theory 
predicts to be a constant. Indeed y is supposed to vary weakly 
because it is essentially a function of 6, and some things that don’t 
move very much. Professor ALLAIS secures numbers on these two 
magnitudes. 
Now, when a theory predicts something to be constant it is hard 
to know how to evaluate the test that is used. One has to be able 
to say how constant is constant and there is no standard for this. 
The only possible comparison that can be made, I should think, 
is a relative one. Professor ALLAIS’ theory predicts that 6 should 
be constant and y should vary slightly; in fact, §_ varies substan- 
tially more than does y. 6 moves by something of the order of 
17.5 per cent as compared with 5.8 per cent for the figures for y 
tor the United States. This takes the ratio of the range to the mid 
point of the range as the basis for the calculations which are im- 
precise. If the theory were right, it should be the other way around. 
Now this is rather serious since it is almost the only empirical 
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Allais - pag. 283