SEMAINE D'ÉTUDE SUR LE ROLE DE L’ANALYSE ECONOMETRIQUE ETC.

737

Case where Consumed Income is equal to Capital Income

In the case where consumed income Rc is equal to capital
income R,. we have from (116-16)

116-22)

A
R,=R_ +1

and from (116-19) we have then

116-23)

R tu K w

Thus in this case the whole increase of capital comes from
primary income. There is no contribution from the capitalisaon
 of interest on capital.
From (116-21) and (116-23) we have in this case

116-24)

a — ir

Mlustration by a Simple Example

The significance of the preceding discussion can easily be
understood by examining a simple example.
Consider a stationary process in which the rate of interest
is zero and assume that the lag between use of a factor input
and its appearance in consumed income Rg is the same for all

11] Allais - pag. 41