PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

THE TRANSIENT MODEL

I. INTRODUCTION

This model is still at the preparatory stage. The variables
are the same as in the steady-state model. The relationships,
already described in [40], are outlined below. The estimation
problems are similar to those in the steady-state model. The
computations are carried out by dynamic programming. We
are assembling the material for a trial run with a four industry
model and have written a programme in which the calculations
proceed year by year. In this way the full model is kept within
‘he capacity of the computer.
Since we have not yet made any calculations with this model,
 I shall describe here only the, relationships we propose to
use, limiting myself to the case of a closed economy with
constant parameters. In [40] it is shown that these simplifications
 can be dispensed with.

2. THE RELATIONSHIPS

The relationships of the model are set out below. Unless
otherwise stated, the notation follows that developed in the
preceding chapter.
First, in the base year at the outset of the transitional period,
 the vector, s, of the economy’s stock of capital goods is
equal to a given value s say. That is,

V. 1

‘1] Stone - pag. 76