SEMAINE D’ETUDE SUR LE ROLE DE L ANALYSE ECONOMETRIOUE ETC. 
1 4 
in fact in order to feel comfortable in the situation in which he is 
placed, he would have to be not only an econometrician but an 
electronic computer as well. He would want to know what quanti- 
tative consequences his indications of preferences would have in 
order to feel comfortable about the answers he is giving, I wonder 
whether a better and a more effective procedure, which would get 
more effective cooperation, would not be an iterative one. While the 
policy-maker is being asked to state his preferences, he would be 
assured that this is for a trial run only and that the outcome of the 
zomputation is to be presented only to him or to his associates before 
‘hese preferences would be considered firm. 
My second point has to do with the question of preferences being 
1ecessarily temporary and having to evolve by experience. It is 
stated that the broad purpose of planning is, among other things, 
‘0 realise the high goals of rapid economic growth and social justice. 
Of these if would seem to me that social justice is the more permanent 
one whereas rapid economic growth is a more temporary one. 
Finally I have a point which is put more in the nature of a 
question to Prof. FriscH. This has to do with the way in which 
‘he steering prices would be used in order to steer the economy. If 
the production system has constant returns to scale it would seem 
‘hat prices are a poor instrument by which to bring about moderate 
“hanges in quantities. The production set is, in a two-dimensional 
case, the set of all points that are on or below a way out of the 
origin. Them for certain price ratios profit maximizing quantities 
are found in the origin. For other slightly different price ratios, 
profit is the higher the larger the output.” So in a strictly linear 
‘echnology, the response to prices is likely to have a flip-flap cha- 
racter. 
Now, one would ask, if the competitive market system that is 
prevalent in many countries is, in a way, a model for the steering ot 
the economy by prices, why does that flip-flap behaviour not ma- 
nifest itself so clearly in the competitive market as I am concerned 
that it might manifest itself in the steering mechanism that we are 
discussing. I believe that in the competitive market system prices 
4) Frisch - pag. 19