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

612 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - - ratio. This is a well-known relation. As the reader will realize, condition (III.ro) is simply a more analytical formulation (re- ferred to the case of population growth) of what has become generally known in macro-economic theory as the HArrop-Do- MAR equation (?). To conclude, two types of conditions must necessarily be satisfied in order to keep equilibrium over time. There is, first of all, a series of capital accumulation condition (IIT.6), ensur- ing that each sector be endowed all the time with the additional productive capacity required by the expanding demand. These conditions. state that, in each sector, the ratio of new invest- ments to the level of production must be equal to the techno- logically determined capital-output ratio multiplied by the rate of population growth. Secondly, in order to ensure the full utilization of the productive capacity that thereby comes into being and of the available labour force, the macro-economic effective demand condition (III.g) must also be satisfied. This condition determines the equilibrium division of total expen- diture between consumption, replacements, and new invest- ments. It states that, given the total amount of equilibrium investments by the first series of conditions and by the repla- cement requirements, total demand for consumption goods must be such as to absorb the whole remaining part of potential gross income. Lea Pit 4 441, And since, in equilibrium, X; = K;, we obtain: =p 0.E.D. (*) See R. F. Harrop, An Essay in Dynamic Theory in « The Economic Journal » 1939, and Towards a Dynamic Economics, London 1948; E. Do- MAR, Capital Expansion, Rate of Growth and Emblovment, in « Eco- nometrica », 1046. [10] Pasinetti - pag. 42

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