AN 
USSIGRK 
[LEONTIEF 
May I ask Professor HAAVELMO to answer the following question: 
His equation 3.3 involves a relationship between the magnitude 
a deficit and that of public investment. A deficit is measured in mo- 
netary terms while investment in real. Professor HAAVELMO visual 
zes apparently the possibility of a situation in which large or 
small deficit might be combined with either large or small public 
nvestment. It would be helpful if he could interpret in somewhat 
more operational terms the practical meaning and implication of 
-ither one of these different possible combinations 
HAAVELMO 
I refer to the definitions (2.1) and (2.2). I can derive the equa: 
tions (3.2) - (3.4) from the definitions plus the consumption function 
(2.4) and the relation (2.5). m is simply government outlay net 
of taxes. Of this outlay the only real counterparts are public con- 
sumption x, and public investment k, The rest is government 
subsidies or expenditures on « worthless things ». m for full employ- 
ment will be large if total investment, public and private, is small 
Haavelmo - pag.