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PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 2H 
diagonal element of the i-th column of (I-a- 5)". Accord- 
ingly, 
dlogv; _ dlog y; 
38) 7F “dr =° 
=~ 
In words, if industry ¢ makes a technical improvement of the 
neutral type, the long-run equilibrium prices of good 7 de- 
crease proportionately more than the other prices. 
Clearly (38) implies dy/dF;>0; therefore, the curve pp’ 
in Figure 1 shifts upward in the diminishing phases and down- 
ward in the increasing phase (see Figure 2a). The intersection 
of the new curve p” p’” after the technical change with the 45° 
line results in a new voN NEUMANN rate of interest #!. Usually 
we have >r. But as in the case illustrated in Figure 2b a 
technological change of the neutral type may perversely bring 
forth a decrease in the von NEUMANN rate of growth. We shall 
refer to the increasing part ww’ of the curve pp” as the perverse 
part and to the other part as the normal part. (See Figures 2a 
and 2b). In any case, however, we have dy /dF,>0. so that 
“'GURE 
IGURE 2-b 
y| Morishima - pag. 20