Study week on the econometric approach to development planning

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Monograph

Identifikator:: 1824422792

URN:: urn:nbn:de:zbw-retromon-217476

Document type:: Monograph

Title:: Study week on the econometric approach to development planning

Place of publication:: Amsterdam [u.a.]

Publisher:: North-Holland Publ. Co. [u.a.]

Year of publication:: 1965

Scope:: XLVII, 1259 S.; graph. Darst.

Digitisation:: 2022

Collection:: Economics Books

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Document type:: Monograph

Structure type:: Chapter

Title:: A new theoretical approach to the problems of economic growth / Luigi L. Pasinetti, King's College - Cambridge - Great Britain

Collection:: Economics Books

586 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 each commodity, so that (II.6) say that production of each commodity exclusively depends on demand. If there were no demand, there would be no production. On the other hand, each of the coefficients (a, a, ... a, ,_;) expresses the labour imput in each physical unit of output, so that (II.7) say that the price of each commodity is directly proportional to the quantity of labour required to produce it. In other words, prices, in this simple case, are explained by a pure labour theory of value. 3. À necessary condition for full employment Condition (II.5) will recur time and again in the subsequent analysis and we may well investigate its economic meaning immediately. From a mathematical point of view, the fulfilment of (II.5) is a necessary condition for each of the systems (II.3) and IT.4) to have positive solutions. However, non-fulfilment does not imply no solution. The coefficient matrix of (II.3)-(II.4) has a particular form (all its entries are zeros, except on the last row, on the last column, and along the diagonal), which means that the solutions of the systems can be derived directly, without substitution, from the first (7 — I) equations of (II.3) and from the first (n- I) equations of (II.4) respectively. Therefore, relative prices and relative quantities are determined independently of condition (II.5), whose binding restrictions fall entirely on the last equation of each of the two systems. Let us n—l see what this means. Suppose, for example, that > a,; 4, CI. i=1 This inequality implies two things. In the context of system (IL.4) it implies (3) that Za, P,<P,, namely that average per- () From now on, for shortness sake, the limits of the summations will be omitted. In other words, all summations that will appear in our analysis have to be interpreted as running from 1 to (n—1), unless otherwise specified. 10] Pasinetti - pag. 16

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