588 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

nomic result emerges immediately from a pure production model
of the type we are dealing with; a model, by the way, which
has been developed on a multi-sector basis.
It must be added that, with the particular hypothesis of
the present simple case (where no capital is needed) the condition
 that all income must be spent also means something
more specific, namely that all income must be consumed. By
adopting a Keynesian definition of savings, i.e. by defining
savings as that part of personal incomes which is not spent,
macro-economic condition (II.5) may also be expressed by
saying that there can be no net savings in the system, as a
necessary condition for full employment. Single individuals, of
course, may save, but there must be other individuals who dissave
 by the same amount, so that savings and dissavings, on
the whole, cancel each other out. The only form of savings
which is possible for the system as a whole is in real terms,
i.e. by carrying over durable (produced) commodities from one
period to another. But within each period, total demand must
be such as to induce the full utilization of the production potential,
 if full employment is to be reached. This is another
important property of a production system. There must be
demand — and in our simple case demand for consumption
goods, whether durable or non-durables — for such an amount
as to generate that quantity of production that requires the full
employment of the existing labour force.

1. Production by means of labour and cabital

We may now consider an economic system which has all
the properties of the system analysed in the previous sections
with one difference. The production processes, in order to be
carried on, require another factor of production besides labour:
capital. Each productive process includes, as in the previous
case, a flow-input of labour and a flow-output of final commodity,
 but now it also requires a stock of capital, on which the

[10] Pasinetti - pag. 18