Full text : Study week on the econometric approach to development planning

SEMAINE D’ETUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIOUE ETC.

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At the same time there is a second proposition according to which
real national income has a maximum. whatever the level of real
capital.
Of course, this model in no way constitutes a proof, but at least it
supports the fact that the two propositions are absolutely different.
It also shows that it is impossible to derive a general property of the
production function, from the fact that the capital output ratio is
practically constant, according to which real national income would
be proportional to real capital. Thus from a theoretical point of view
it 1s impossible to deduce proportionality between real national income
 and real capital from the fact that in certain circumstances we
can observe an apparent constancy of the capital output ratio.
From an empirical point of view the empirical researches of Douglas
 and his followers have shown that we can write at least as a
first approximation

R = KLeCt

where R is real national income, L labor. C real capital, anc
x, {3 constants.
The Douglas results have been very much discussed but there
is one point which has never been contested This is that the order
of magnitude of the elasticits

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Leontief - pag. 21
            
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