Full text: Study week on the econometric approach to development planning

SEMAINE D ETUDE SUR LE ROLE DE L ANALYSE ECONOMETRIQUE ETC. 
Su. 
and the solutions for the physical quantities take the form 
‘1I.11) 
17 
ar 
\ 
1, 
As can be seen, the first (# - 1) solutions, referring to con- 
sumption goods, are again of the simple type of the previous 
case: they actually coincide with the (II.6). But the following 
(n - 1) solutions, referring to investment goods, now contain 
two elements, expressing the fact that production of these goods 
is generated by two distinct types of demand: demand for new 
investments, and demand for replacement of worn-out capacity. 
6. The structure of brices 
From the physical flows which have just been considered, 
another system of equations can be derived in terms of prices. 
At first, one might think that one should write the same matrix 
of (II.g) (but transposed) and multiply it by prices. This pro- 
cedure, however, is no longer sufficient because the production 
processes now require capital, besides labour, and therefore 
‘he total income which flows to sector # has two components: 
a remuneration for labour (wages) and a remuneration for ca- 
‘10] Pasinetti - pag. 23
	        
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