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

SEMAINE D'ÉTUDE SUR LE ROLE DE L ANALYSE ECONOMETRIQUE ETC. 50% This is an old dilemma in economic analysis. When the classical economists (RICARDO in particular) faced it, they thought they could take the wage rate as given from outside the sphere of economics. Later on, the marginalist economists chose the other alternative. As is well known, they introduced a series of new hypotheses, which amounted to treating capital goods as if they were natural resources, and built up a whole theory behind the technical coefficients — the theory of mar- ginal productivity. In the present work, I am in a sense going back to the Classics’ approach, but with a reversal of their hypothesis. At this stage, I shall take as given the rate of profit (x). It must be made clear, however, that this step does not have, here, the same meaning that taking a given wage rate had for the Clas- sics. The rate of profit is not an exogenous magnitude in the present theoretical scheme (as technology and consumers’ pre- ferences are). What this taking the rate of profit as given here means is a simple assertion that the rate of profit is not de- termined by the elements of the model so far considered. Of course, the rate of profit is determined bv elements which come within the scope of economic investigation and which must be examined. We shall come back to this problem later on in chapter V. For the time being, the only anticipation of that discussion needed here is that the rate of profit is bound ‘0 remain roughly constant, or rather, to show a roughly cons- ant trend through time. This result is relevant here because it allows us to keep the rate of profit among the constants of our analysis. Thereby we are in a position to express the new vector appearing in I1.12) in terms of prices, and to incorporate its constant ele- ments into the coefficient matrix. The rate of profit itself need not necessarily be exactly the same in all sectors. There may be particular elements of risk and uncertainty in each sector, 10] Pasinetli - pag. 25

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