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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 classification.
 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 economics;
 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 purposes
 and independently of each other: the inter-relation approach
 has mostly been associated with analysis at the microlevel
 and of a static nature, while the vertically integrated approach
 has mostly been associated with dynamic and macroeconomic
 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 approaches
 quite obvious and well-defined. LEONTIEF has provided,
 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