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output corresponding to the fixed capital/output ratio entering in my 
equation 2. 
Accordingly, my computations show essentially the upper limits 
of the future growth in national income that can be expected to be 
brought about by various combinations of domestic savings and in- 
ternational capital transfer, If the supply of other factor — such as 
skilled labor, efficient management and natural resources — could 
not expand proportionately the actual increase in income would in 
each case fall short of that, in a certain sense, maximal rate. 
I used the capital/output ratio essentially as a limiting factor. 
Not saying that this amount of capital transfer is sufficient to produce 
that output, I on the other hand imply that without the indicated 
rate of capital transfer the corresponding rate of income growth — 
computed on the basis of my formulae — could hardly be attained 
Professor ALLAIS does not seem to disagree with this. So far as the 
political conclusions — which he expects to be drawn from the results 
of my analysis — are concerned, he might be right or he might be 
wrong; it all depends on the additional — political — premises which 
will have to be introduced before one would be justified to draw 
them. 
ALLAI. 
I agree completely with what Professor LEONTIEF has said but : 
wish to stress two points. First, precisely in this particular line, an 
attempt is made to calculate some limits of the capital effect, and 
this attempt is very interesting indeed. But if this is done, b should 
be replaced in equation 2 by b/8 where 3 is equal to 0.2 and not 1, 
if we accept the results of the Douglas researches and those of his 
followers. My second point is that, so far as underdeveloped coun- 
tries are concerned, we must be very cautious in extrapolating data 
which are valid for the West. This, I think, is the error that Douglas 
himself has committed in assuming that his relation could represent 
the production function over a verv large range. What he has shown 
-31 Leontief - pag. 23