598 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

ABSTRACT

A general view is given of the results of my work on Capital
theory from 1943, date of publication of my Treatise of Pure
Economic Theory, until 1963.
The first part presents a general formulation of Capital
theory, the second a model illustrating the general theory, the
third confronts the model with the empirical data, and the fourth
presents different applications. In appendix. the model is
studied for a very general case.
The different relations given in Part I between quantities
which are not real quantities express simple accounting identities
 valid for any economy. Thus they have a very large range
of applicability. The relations between real quantities derive
simply from the hypothesis that there exists, over a wide range,
a valid index Rg of real consumed national income evaluated
at primary factor cost (services of labor and of natural resources)
 when the process considered is optimal in the Paretian
sense. From this hypothesis it follows that

ôR _k 2yèY
R  IyY

where Y represents the primary inputs, y their prices and % the
coefficient of homogeneity of the production function. The
different relations in real terms of this paper are derived from
this hypothesis ($ 110)

11] Allais - pag. 2