Ssit” 
FS 
ALLAIS 
Prof. LEONTIEF's paper is very interesting and the ideas he 
expressed and his conclusions are very important and stimulating 
from two points of view: first, theoretical and secondly political. 
And in view of this importance I find myself obliged to express my 
disagreement, in a very friendly, but very firm way. This disagree- 
ment relates to equation 2, which is founded on the same hypothe- 
sis as Prof. HaAvELMO’s paper yesterday. This ‘equation 2 has 
practically underpinned Western policy over the last 15 years. In 
every meeting of the United Nations, equation 2 has been implicitly 
accepted and has thus had great importance. I think it is worth 
while to discuss this equation 2 and the hypothesis on which it is 
founded in detail. The hypothesis is that the real national income of 
anv one country is proportional to its real capital. 
I thin: this proposition can be accepted neither from a theoretical 
nor an empirical point of view. We have to distinguish two different 
points carrefully. The first is: we observe that the capital output 
ratio is practically constant for a number of countries at different 
times. That much is certain and I have personally given some data 
to support this conclusion in my 1961 Econometrica paper. But it is 
a completely different thing to accept that in every situation there 
is proportionality between real income and real capital. Perhaps my 
point of view is quite difficult to understand because it is not very 
~Oomman 
| Leontief - pag. 19