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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 
3. The rationale of framing a dynamic analysis in terms of 
verticallv intevrated sectors 
At this point, the reader may wonder why, in the previous 
dynamic analysis, a classification based on vertically integrated 
sectors has been preferred to an input-output type of classifi- 
cation. This question can be answered simply by considering 
the type of analysis for which each of the two classifications is 
most suited. 
To begin with, I may recall that both the inter-industry and 
the vertically integrated way of looking at the production 
processes of an economic system are by no means new in eco- 
nomics; they can be found quite extensively used at different 
stages in the history of economic thought. However, it is very 
significant that they have normally been used for different pur- 
poses and independently of each other: the inter-relation ap- 
proach has mostly been associated with analysis at the micro- 
level and of a static nature, while the vertically integrated ap- 
proach has mostly been associated with dynamic and macro- 
economic types of investigations. As a result, a kind of gap 
has gradually appeared between the two approaches. The 
foreigong discussion now puts us in a position to investigate 
the nature of this gap. 
At a given point of time, the two models which we have 
been confronting make the connections between the two ap- 
proaches quite obvious and well-defined. LEONTIEF has prov- 
ided, for the inter-relation approach, a much more aggregate 
framework than the one normally used. The model which has 
been discussed here gives, on the other hand, a much more 
disaggregated framework for the vertically integrated approach. 
Between the two, the inverse matrix mentioned above provides 
the analytical bridge. As a matter of fact, once we posses the 
inverse matrix. all relations between the two approaches at a 
[10] Pasinetti - pag. 102