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 ETUDE SUR LE ROLE DE L ANALYSE ECONOMETRIOUE ETC. 641 pears in system (II.13) will be taken as a constant. This does not mean that the rate of profit is an exogenous magnitude. It only means that it does not depend on the structure of the sconomic system, as represented by (II.g) and (II.13), and must be explained with a separate economic theory. Now, since I have had the opportunity of dealing with such a theory already in an independent publication of mine (Rate of Profit and Income Distribution in relation to the Rate of Economic Growth in « The Review of Economic Studies », October 1962), [ shall here simply refer the reader to that publication (*). The results of that analysis which are relevant for our present pur- poses are that in an economic system where the over-all rate of capital accumulation remains roughly steady over time, the rate of profit is bound to remain steady as well. A further point is that the assumptions of section 1 do not yet provide us with the dynamics of all coefficients that appear ‘n systems (II.g) and (II.13). The movements through time of one series of coefficients — the demand coefficients for new nvestments — have not been specified. This series of structural coefficients is the only one that affects the stocks of the system (i.e. productive capacity in each sector). It cannot therefore oe taken as fixed from outside the system. These coefficients must be such as to be compatible with the process of growth and will come out themselves to be determined as a part of the equilibrium conditions 3} To those readers who still find it difficult to follow the logic of the long-run-equilibrium growth models I would suggest a device. We have normally been used to think in terms of a free market economy and then ‘0 extend the results to the case of a centrally planned economy. Here, it turns out ot be much more helpful to reverse the procedure and to think first in terms of a centrally planned economy. For, in this case, the relationship (an equilibrium relationship) between the long-run rate of profit and the natural rate of growth emerges immediately. The corresponding relationship for a free market economv will then appear much easier to grasp 10] Pasinetti - pag. 77

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