998 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

From a theoretical point of view it is possible to show that the
proposition: « real income is proportional to real capital » cannot
de derived from the proposition: « the capital output ratio is praccally
 constant ».
[ can illustrate this proposition in using my own model which in
any event is mathematically consistent. In the exponential case of
this model we obtain two results simultaneously

a) the capital output ratio

323-1)

_C 6,
Y RT +67

changes little if we consider the usual range of variation of i:

5) real national income

(251-16)

6

De
y

has a maximum value R,, whatever the value of real capital C.

Thus, it is impossible to admit the derivation of relation (a) from
the observed constancy of the capital output ratio as a valid and
seneral proposition.

10) Finally, two main objections were raised in the LEONTIEF
group’s discussion.
The first was that one cannot have great confidence in the statisical
 data so that the agreement between my theory and the facts
should be questioned. This argument is quite singular. In fact,
there is a striking agreement between three sorts of data.

‘I1] Allais - pag. 302