612 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - - 
ratio. This is a well-known relation. As the reader will realize, 
condition (III.ro) is simply a more analytical formulation (re- 
ferred to the case of population growth) of what has become 
generally known in macro-economic theory as the HArrop-Do- 
MAR equation (?). 
To conclude, two types of conditions must necessarily be 
satisfied in order to keep equilibrium over time. There is, first 
of all, a series of capital accumulation condition (IIT.6), ensur- 
ing that each sector be endowed all the time with the additional 
productive capacity required by the expanding demand. These 
conditions. state that, in each sector, the ratio of new invest- 
ments to the level of production must be equal to the techno- 
logically determined capital-output ratio multiplied by the rate 
of population growth. Secondly, in order to ensure the full 
utilization of the productive capacity that thereby comes into 
being and of the available labour force, the macro-economic 
effective demand condition (III.g) must also be satisfied. This 
condition determines the equilibrium division of total expen- 
diture between consumption, replacements, and new invest- 
ments. It states that, given the total amount of equilibrium 
investments by the first series of conditions and by the repla- 
cement requirements, total demand for consumption goods must 
be such as to absorb the whole remaining part of potential 
gross income. 
Lea Pit 
4 
441, 
And since, in equilibrium, X; = K;, we obtain: 
=p 
0.E.D. 
(*) See R. F. Harrop, An Essay in Dynamic Theory in « The Economic 
Journal » 1939, and Towards a Dynamic Economics, London 1948; E. Do- 
MAR, Capital Expansion, Rate of Growth and Emblovment, in « Eco- 
nometrica », 1046. 
[10] Pasinetti - pag. 42