340 
PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA -~- + 
Let us denote the voN NEUMANN non-normalized prices 
(i.e. the long-run equilibrium non-normalized prices correspond- 
ing to the voN NEUMANN rate of interest) by p,°, p1°, … b,°, 
4:° ..., 4°. Equation (5) may be linearized in the neighbour- 
hood of the voN NEUMANN prices in the following way. 
We get from (7) and (0) 
(10) 
_ 1 —d, 
Agy,= App, — Tir À Pryt+1 
where Aq, ,=q;,-q’, and Ap, =p, ,-p,’. Expanding the 
left-hand side of (5) in a TAYLOR series and neglecting higher- 
power terms, we have by virtue of (19) 
20) 
_— n _ n I — 
Pix — 2 An Pau — (1+ 7 ) >. {riz by) Pi, + 
7 [1 —a — — 
—_— by) ; — a, o =0 
+2 AE | Pied Pot 
where pi =Ap. pC. We also have from (18) 
(ZI) 
et n — 
Po HS Li Pis - 
Substituting for Por from this and writing (20) in matrix form, 
we get 
(22) 
M—a—(1+P)best—c] p,+ b(I—d)e-!p,,, =0 
9] Morishima - pag. 12