1044 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA -

~§

The growth of the Underdeveloped Areas turns out to be
described by a combination of two exponential terms. The
first reflects the effects of internal savings, the second the contribution
 of investment financed through capital imports. Accordingly
 the growth rate, A,, of the first component depends
on the magnitude of the domestic savings and capital-output
ratios while the second term grown at the same rate as the
GNP of the Developed Areas (1).
Equations (4) and (9) permit us to project forward the
growth of both groups of countries provided their base year
levels of their respective GNP’s, Savings, Growth Rates, as
well as the initial magnitude of the interregional capital transfer
is given. The corresponding values of the constants entering
into the two growth functions can be computed from the following
 formulae:

pL Le) IL) Le
TY 0) Von PT ¥.0) Ya0)7.(0)

_0)

à, = À — Yalo) _ . __[L(0) — H(0)] Ya(o) _
BL Yo) MO) MST Lo) Lo)
H(o) | _
TO +o)

These relations are obtained by inserting the given base
year values of the variables in the appropriate Investment
Functions. Accelerations Relationships and Growth Functions.

(!) If the ratio of the saving to the capital coefficient in the Developed
and Underdeveloped regions happens to be equal. the solution of the
differential equation (8) is reduced to:
TIN

(0-2)

Y, (4) -

10)

nf

à -

SU
h,

2
b,

that is, the growth rates of bnth groups of countries would in this case
he reaual.

13]. Leontief - pag. 6