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PONTIFICIAE ACADEMIAE SCIENTIARVM SCR PTA VARIA - 28
actually be made up of a long series of different physical goods
in different proportions and with different durability. The
reason why such a unit of measure is here used is the same that
prompted the use of the concept of a final commodity (*). Both
concepts permit useful simplifications of exposition and will
become especially helpful in the dynamic analysis which will
follow in the next chapters.
5. The physical stocks and flows of the system
Let us consider, first of all, the physical aspect of our system
in a given period of time. We are faced with a series of stocks
and a series of flows.
At the beginning of the period, there exists a series of
stocks of capital which have been inherited from previous pe-
riods. We may represent them by a vector
(11.8) K, Ky ooo. Ky ooo. KT
where each K; stands for the stock of capital, measured in terms
of productive capacity, in sector j (j=I, 2, … #-I). When
our analysis begins, the K's are obviously given. However
they are not given by « nature ». They are the result of
production activity in earlier periods of time, each K; being
the sum of all net investments made in the past in sector 7.
(*) Conceptually, the notion of a unit of productive capacity and the
notion of a final commodity have many similarities. Both a final commo-
dity and a unit of capacity can, at a given point in time, be broken down
into many distinct components: intermediate goods for the former, capital
goods in an ordinary sense for the latter, These break-down relations, how-
ever, are valid only at a given point of time. When a movement through
time is considered, the relations change - intermediate goods on one side
and final goods on the other, capital goods on one side and productive
capacity goods on the other, follow a path of their own. It is in connection
with these time movements that final goods and productive capacity goods
will become particularly useful in the subsequent dvnamic analysis.
'10] Pasinetti - pag. 20
