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

PART

MODEL ILLUSTRATING THE GENERAL THEORY

200. The general theory whose main elements have been set
forth above can be illustrated by a very simple model. This
model has some very suggestive features and appears to be of
very wide generality.
Among others, the model has the essential advantage of
being easily adapted for numerical applications, and in particular,
 of facilitating evaluation of the influence of the volume
nf capital used on real consumed national income.

THE ASSUMPTIONS OF THE MODEL

The model to be examined is based on two hypotheses:

Hypothesis (a): Paretian Optimum over Time and Invariance
of ilt) - p(t)

210. It is assumed that a Paretian optimum over time is
realised (1), and that the difference between the rate of growth

() In French « maximation du rendement social », cr in the terminology
sf English language literature: « optimum allocation of resources » [see
ALLAIS (1943)]

11 | Allais - pag. 753