THE RATES OF LONG-RUN ECONOMIC 
GROWTH AND CAPITAL TRANSFER FROM 
DEVELOPED TO UNDERDEVELOPED AREAS 
WASSILY (LEONTIEF 
Harvard University - Cambridge. Mass. - U.S.A. 
1. The Underdeveloped Areas, which hold at least two- 
thirds of the entire population of the world, produce now only 
about one-seventh of the world’s gross output of goods and 
services; moreover, their rate of economic growth is at the 
present time much lower — possibly only half as high — as 
that of the advanced industrialized countries. That means that 
the contrast between the richer and the poorer areas tends to 
increase rather than diminish. 
A rise in the rate of growth of the Underdeveloped Areas 
would demand an increased volume of productive investment. 
The additional capital could be created through stepped up 
internal savings, or it might be obtained from abroad, that 
is, transferred in the form of aid, foreign loans, or direct pri- 
vate investment from the Developed countries. 
How much additional investment would the Underdevelop- 
ed parts of the world have to absorb if they were to raise their 
average growth rate, over the next ten year period, up to the 
average growth rate of the economically advanced industrial 
countries? If capital transferred from Developed to Under 
3 
Leontief - pag.