348 PONTIFICIAE ACADEMIAE SCIENTIARVM SCRIPTA VARIA - 28

instead of the observed values u= 0.32 and 1 - A=0.go0 respec-Hvely.


Here again, if the exponential model is assumed to be
correct, the divergences are the result of the incorrectness of
hypothesis (H), but the concordance of orders of magnitude
shows that the interpretation of reality corresponding to hypo-‘hesis
 (H) is acceptable as a first approximation.
As might have been expected, the values of 0°=3.59 which
nas been derived is of the same order of magnitude as the

average production period, 0 =4.23. In point of fact, if the
supplementary hypothesis (H’) that all investments involve
a production period equal in length to the average production
period is made in addition to hypothesis (H), it follows necessarily
 that

y =6=4.23

It may be concluded from this that if the formulation of
the exponential model can be considered as conforming with
reality, approximate assessment of the real situation can be
made by considering the hypotheses (H) and (H’) as valid.
Taking 0,=3.59, and using for illustrative purposes the
value of 8; =0.25 (3 months) the following table can be derived.

111 Allais - pag. 152