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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 
[SARD 
My comment is general. The paper is excellent, but I miss the 
regional variable, HaAAVELMO talks about investment programming 
and yet we know in national economic planning that a basic problem 
is how to allocate investment among the different regions. I am 
very conscious, too, of the different investment incentives required 
in different regions. And so forth. Thus, althoug I do not wish 
to be critical of HAAVELMO’s excellent statement, I do hope that 
he and others might perhaps consider sometime in the future in- 
troducing in a simple wav the regional variable in their model. 
ALLAIS 
I must confess I have been provoked by the conclusion of the 
model according to which the rate of growth is doubled under a 
regime of public investment. I have searched for the explanation, 
because, in a model which is mathematically coherent, the expla- 
nation of the conclusion must lie in the hypotheses adopted. I the- 
refore have four remarks to make, 
The first is that there is one apparently absolutely inoffensive 
hypothesis on page 4. That is, the capacity of the economy to 
produce is assumed to be proportional to the stock of capital 
(assumption 1). At first sight that is quite natural and in my paper 
I intend to stress the fact that the capital output ratio is practically 
constant and I intend to propose to vou an explanation of this 
constancy. 
But, from the practical constancy of the capital output ratio, 
it is impossible to conclude to any proportionality of real income 
to real capital and specifically I intend to show that, for a given 
population and with given technological knowledge, there is a maxi- 
mum value for real national income whatever the value of real 
capital. 
If you make the assumption that population is constant and if 
you don’t make it explicit somewhere that there is some technical 
8] Haavelmo - pag. 16