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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28 
4. The production aspect of technical change 
It will now be useful to consider carefully the mean- 
ing and implications of technical change. When the technical 
coefficients of production change as time goes on, there are 
two distinctly different series of effects which are called into 
being and which may respectively be connected with produc- 
tion and demand. On the production side, technical change 
means a variation in the technical conditions and therefore a 
change in the physical quantities of goods which may be pro- 
duced out of a given amount of original factors of production. 
On the demand side, it means a change in remuneration of the 
factors of production, and therefore a change in the amount 
of per-capita real income at the disposal of consumers in ge- 
neral. 
Let us take the production aspect first. Here the causes of 
change may be manifold. For a long time economists have 
been impressed by those changes which are connected with 
the exhaustion of natural resources. To MALTHUS and RIcARDO, 
for example, at the beginning of last century, it appeared 
as a matter of logical necessity that the continuation and ex- 
pansion of the process of production, on natural resources 
which are given, should inevitably lead to decreasing returns, 
i.e. to an increasing trend in the technical coefficients of pro- 
duction. But the economic history of the industrial countries 
has by now consistently and persistently brought to the fore 
another, more important and widespread process of change, 
continuously at work ‘in any modern society: technical pro- 
gress. 
Technical progress is a very complex movement. In the 
sense in which it is relevant for economic analysis, it includes 
not only, and not so much, the great scientific discoveries, 
which by their own nature come about in a discontinuous and 
sometimes accidental way, as their practical application on 
tol Pasinetti - pag. 56