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

670 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 
tion in the problem of giving the various symbols so far used 
an empirical content. Of course, since each coefficient or va- 
riable appearing in our system refers to actually observable 
magnitudes, the problem of fitting empirical data into the 
model is in principle very straightforward, in the same way as 
it is for an input-output model. But the criterion of classifica- 
tion is different. In the input-output model, the criterion is the 
industry producing a certain commodity, intermediate or final, 
and the problem is to reckon where its inputs come from and 
where its outputs go to. In the present model, the criterion 
is the process of production of a final commodity, and the 
problem is to build behind each final commodity a conceptually 
integrated sector which, by passing over all the intermediate 
~ommodities, goes right back to the original factors. 
The procedures for collecting and ordering data for input- 
output analysis purposes are well known. On the other hand, 
collecting data for the purposes of the present model may seem 
a rather laborious task, mainly in connection with the pro- 
duction sectors, if not in connection with the final sector (the 
latter being the same as the final sector of an input-output 
model). But the difficulties are only apparent. It is true that 
to classify production processes in a vertically integrated way 
would be almost an impossible task if attempted directly. But 
this task need not be attempted directly. The algebraical pro- 
cedure which has just been shown allows us to go over to a 
vertically integrated type of classification by starting from a 
classification of the input-output type. 
All this means that, in order to give the present model an 
empirical content, one may first of all collect data and fit them 
into an input-output table in the usual inter-industry way. Mo- 
reover, data must be collected about capital at current prices 
(or about capital-output ratios, as is more usual) in each single 
industry of the input-output classification. Then the resulting 
system of input-output linear equations can be open with 
respect to the final eoods and solved bv computing the inverse 
10] Pasinetti - pag. 100
	        
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