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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

rise to a decrease in the consumption of at least one good with
no increase in the consumption of any other good: that is,

(17

a
À < 0,9

where

; = [21/91, Z2/V2> <> EnlVn)

Let us now assume that the working population grows at
a rate depending upon the long-run equilibrium consumption y :
The rate of growth of the labour force p is negative for very low
level of vy, o for the subsistence level of y, and then increases
with the rise in y until p reaches a certain maximum, after
which p will decrease gradually but will increase again when ¥
reaches the level of an affluent society (4).
We are now in a position to be able to fix the rate of interest
 (°). Measure the rate of growth of the labour force and
the rate of balanced growth of outputs along the vertical axis,
and the rate of interest along the horizontal axis. Considering
 (17), we find that our assumption on the labour-forcegrowth-rate
 function implies the curve pg’ in Figure 1. On the
other hand, as the rate of balanced growth of outputs equals
the rate of interest, the relation between them is simply expressed
 by the 45° line. It is obvious that, to sustain the demandsupply
 balance of labour, the condition that the rate of balanced
growth of outputs equal the growth rate of the labour force is
to be fulfilled. It is seen from Figure 14 and 1b that there are
at least one and at most three equilibria. The greatest equilib-(®)

 Let X be a vector; X<o (or X>0) means that all components of
X are non-positive (or non-negative) and at least one of them is strictly
negative (or strictly positive).
(*) Professor S. C. TsrANG makes a similar assumption in his analysis
of the Rostovian stages. See S. C. TsianG, 4 Model of Economic Growth
in Rostovian Stages, « Econometrica », XXXII (1964), pp. 619-48.
(>) A similar argument is found in my Equilibrium, Stabilitv and Growth,
Ch. III (Oxford Clarendon Press. 1064).

o| Morishima - pag. 10