Growth Strategies 

 

RESOURCES OR INCENTIVES FOR ECONOMIC GROWTH?

by Oldrich Kyn

Planovane hospodarstvi,

Vol. XX - 1967 No. 4. pp. 70 - 80

 

 

 

 I. 

 

An article recently [in 1967]  published by Karel Soska, called: Investments and Economic Growth1, takes issue with the opinions of some of our economists who have criticized the attempts to solve the problem of stagnation of the Czechoslovak economy by a fast growth in the volume of investments. Soska at the same time tries to rehabilitate the viewpoint that investments are and will be the most important determining factor of economic growth and that henceforth, the process of growth will depend primarily on the development of the accumulation process.

We find a similar point of view expressed by M. Soucek, in  "Reproduction of Economic Growth, Resources and Distributive Processes"2. However, Soucek is trying to solve a different problem than Soska and their opinions and modes of argumentation are not identical. Nevertheless, it appears that Soucek like Soska views the main problems of growth to be in “reproduction of growth resources" by which he means the investment or accumulation fund. 3

The main thesis of Soucek  that “where the growth resources are not created, no growth can take place,” can be interpreted differently according to whether we take just investment for “resources” or whether we consider it more broadly, to include innovations, technical progress, organizational changes, incentives, etc. Some further opinions of Soucek, especially his analysis of the task of distributive processes4 confirm my own opinion that he interprets his thesis in the narrower sense. It is possible that I am mistaken, because other parts of his article admit of a different interpretation. An authentic interpretation of his thoughts can, however, be given only by Soucek himself. Thus, I believe that, if I misinterpret his views he will show himself where I am mistaken.

We find differing opinion in the articles of a number of our economists (O. Sik, V. Nachtigal, J. Goldman, M. Toms, M. Hajek and others), published in the journals Politicka ekonomie, Planovane hospoda'rstvi, and Hospodarske noviny5. This opinion was poignantly formulated by M. Toms and M. Hajek in their article “The Determinants of Economic Growth and Total Factor Productivity”[7] (Politicka ekonomie,, No.10 1966), where we read “ At the beginning of the post-war years, it was imperative for growth to consider the quantitative stock of capital.  Relatively simple economic growth models often used a direct proportionality between the growth of capital and the growth of production. … But empirical research made it possible to raise grave doubts about the adequacy of such a simple theory.  The results of an empirical analysis of long-term growth trends. ... prove more than convincingly that the important growth source is the positive action of the third determinant: an increase of the total factor productivity  in the majority of advanced countries ensures 60-80% of the growth rate of national income.   (Politicka ekonomle, No.10/1966, pp.874-875).

  In accordance with this point of view the above-mentioned Czech economists do not consider insufficient investment resources (a low rate of accumulation )   as the reason for economic stagnation. and therefore, do not look for   growth rate renewal via investment, but rather  by the elimination of factors which caused the slow down of growth.

  The point of view expressed above in the words of Toms and Hajek, of course, is not an invention of Czech economists. With the development of neoclassic growth models and analytic methods of economic develop­ment which use the Cobb-Douglas_production function, more and more eminent Western economists have expressed this opinion during the last decade. Among these are E. Domar, R. M. Solow, J. W. Kendrick, etc.

  Also the Soviet economist A. L. Vainshtain adopted a similar point of view in his lecture at the Econometric Congress in Warsaw (September 1966) and proved with the help of empirical data from 1950-1960 that the Soviet Union had not succeeded in stopping a decline in the growth rate even by raising the rate of accumulation. One of the main reasons he gives for this is due to the fact that a fall in   share of consumption in national income weakens labor incentives  and thus decelerates the growth rate of labor productivity.

But not even the works of the Polish  economists referred to so much by Soska, confirm his point of view. For example this is quite evident in Michal Ka1ecki's book ‘Introduction to the Theory of Growth in the Socialist Economy’. Also Oskar Lange (e.g., in the ‘Theories of Reproduction and Accumulation), did not assume the necessity of raising the accumulation rate and even explicitly criticized the so-called law of preponderant growth of department l over department II. 6

The quotation from Oskar Lange on which  Soska basis his thesis was meant for developing countries.  There Lange clearly relates a substantial rise of the rate of accumulation with economic "take-off." But he says further: "At a higher level of economic development, when the economy becomes more sophisticated and differentiated, the problem of efficiency and incentives grows more and more in importance.” 7

Oskar Lange is perhaps right that "at the stage of take-off it is essential to mobilize necessary funds for investment into production” ,  thus “a certain primitivism of planning is justified at the initial stages”.­  But, since Czechoslovakia is no longer at this stage, it should emphasize “the more subtle side of planning”.

  Soska maintains that raising the accumulation rate is a necessary accompanying phenomenon of economic growth under socialism. He even maintains that this is the basic thesis formulated by classical Marxist economics (which would have to be proved), and economists who criticize this "economic law" commit a "serious mistake." Soska considers two possible alternatives: either lowering or raising the accumulation rate, and says: “We should not even deal with the first alternative, when we consider theoretical questions of economic growth under conditions of a socialist economy, because its destructive influence on economic development is obvious and hence, in no need of further theoretical clarification”.

 

 

II 

 

The relation between the growth rate and the rate of accumulation at various stages of technical progress has been thoroughly analyzed many times with the help of various growth models.  Let us now turn our attention to one of the aggregate growth models. It  can be easily show that the growth of the rate of accumulation not only cannot be considered a general rule but that it is not even permanently possible

 Let   
Y = national income,  
K = capital,  
L = labor force,  
S = consumption fund,  
A = accumulation fund,

 and let us define the following parameters:  
           a   =   A/Y   … the rate of accumulation;  
           b   =   Y/K   … the efficiency of capital,  
           w  =   Y/L   … labor productivity,  
           r    =   Y'/ Y  …the growth rate of national income;  

           l   =  L'/ L  … labor force growth rate  
           f   =   b'/b   ... rate of change of capital efficiency 
           m   =  w'/w …rate of change of labor productivity

 

  Note:  the primes ‘ indicate the derivative with respect to time. Technical progress is capital intensive  if  f < 0: neutral    if  f =  0;  and capital saving if  f > 0.

 Assuming that the labor force growth rate l is constant, we can express the growth model by the following system of equations:    

(1)                                    

Y  

=  

 bK  

(2)

Y

 wL

(3)

S + A  

(4)

A

=

aY  

(5) 

A

=

K’  

(6)

L

=

L0 elt

 

From the production function (1) and equations (4) and (5) we can derive the growth rate:

(7)                                    

 r 

 = 

ab + f

 

From production function (2) we can derive the relation for the so-called natural growth rate:

(8)                                        

rL

 =

m + l

 

If resources of unused labor force exist, then r > r is possible, but if these resources do not exist (which is the case of Czechoslovakia) the equilibrium condition for economic growth is

(9)                                              

 r 

=

 rL  

 

It follows from (7), (8) and (9) that

                                          

ab + f

=

m + l

 

and from this

 (10)                       

 a

=

(m + l - f)/b

 

If the dynamic balance of the economy is to be preserved, it is necessary that the rate of accumulation in time develops according to relation (10), which depends on the rate of growth of the labor force, the rate of growth of labor productivity and on the rate of change of capital efficiency. As long as we do not know the direction of change of these parameters, we cannot arrive at any conclusion about changes in the rate of accumulation over time. It is obvious from the model, that if the right side of equation (10) diminishes over time it will be possible to preserve balanced growth in the economy only at the price of a fall in the rate of accumulation. In this case real wages will grow faster than national income, but this does not necessarily lead to inflation or rationing in the economy, as Soucek maintains. In this case an  increase in the accumulation rate, and not a decrease would cause imbalances in the economy.

But Soska is not right either, if he draws conclusions about the development of the accumulation rate only from changes in capital efficiency (or its reciprocal value capital intensiveness). Even if we were to admit the  general validity of capital intensive technical progress, we cannot draw conclusions about the dynamism of a, as long as we do not  know how m and l change.    

From model presented above we find that:
a) from (7) it is obvious that with capital saving technical progress growth is possible even with no accumulation at all. On the other hand the capital intensive technical progress “absorbs” accumulation and consequently reduces the rate of growth.
b) from (10) we see that when the natural rate of growth m + l is constant capital-neutral technical progress requires constant rate of accumulation a.
c) from (10) we also see that with capital-saving technical progress and f > 0 the rate of accumulation can  permanently fall  without causing  a fall in the growth rate of national income.
d) with capital intensive technical progress f < 0 it is possible to secure a non decreasing natural growth rate m + l only if the rate of accumulation grows by   f  . This process, as can be easily shown, cannot go forever.

The rate of accumulation cannot grow infinitely  (since a has to be less than one) so that  capital intensive technical progress is inconsistent with a non-decreasing growth rate. 8 Thus either there will be permanent investment intensive technical progress but then, the growth rate will start to decline after some time (possibly with further negative consequences causing the imbalance of the economy), or it is possible to maintain a non-decreasing growth rate under socialism, but then investment intensive technical progress can last only for a limited period of time. 9

                            

 

III.

 

  Even if we deny the existence of some general law for accumulation to grow faster than national income, the question posed by Soska will be of great importance to us. If capital intensive technical progress in the years to come becomes reality then it means that our standard of living will grow at a slower rate than if investment saving technical progress could be realized.

From our model we can calculate the rate of accumulation necessary for securing a growth of national income by 8% annually under the following conditions:  
(a) capital intensive technical progress, where the efficiency of capital declines by 2 % per annum, i.e., f = -.02; (b) neutral technical progress; (c) capital saving technical progress, where the efficiency of capital grows by 2% per annum, i.e., f =  0.02.

Rate of accumulation necessary for securing 8% growth when the technical progress is10

                                Capital            Capital          Capital 
                                intensive          neutral          saving 
                0                 20.0                 16.0               12.0 

                1                 20.4                 16.0               11.8
                2                 20.8                 16.0               11.5
                3                 21.2                 16,0               11.3
                4                 21.6                 16.0               11.1
                5                 22.1                 16.0               10.9

       Soska concludes that “the hypothesis that capital saving technical progress is characteristic of socialism …cannot be considered…as an absolutely valid scientific finding.” This is, of course, a great misunderstanding, which follows from the fact Soska obviously considers the type of technical progress as being objectively given, independently of the decisions in a given economy. If however, we were to consider the type of  technical progress as a result of the so-called “technical choice11 then the question could be posed differently – what conditions in the decision-making process determine which type of technical progress will be realized? Certainly, there are many factors influencing the choice of technique but probably the most important among them is “the management model” of the economy.  In this sense we should not ask which type of technical progress is generally characteristic for socialism, but rather, how can we arrange the functioning of a socialist economy so that we can achieve desirable technical progress.       

In his argument  Soska leans almost exclusively on the collection of essays called The Theories of Economic Growth and Present-day Capitalism [11] and focuses primarily on the essay by  Z. Chrupek. Here most of data which he mentions relate to advanced capitalist countries. On the basis of these he arrives at the conclusion that “the analysis of these facts in no way confirms the hypothesis of a fall in investment intensiveness in contemporary economic growth of advanced capitalist countries. “ From this and some further considerations about the situation in Czechoslovakia, he arives at a statement that in Czechoslovakia “obviously factors which increase investment intensiveness will predominate.”

I have many reservations about this procedure. Soska does not provide enough concrete and quantifiable data about development in capitalist countries to be able to prove whether the capital intensiveness in advanced capitalist countries grows or falls. The data about the capital coefficient in the U. S. A. and the U.K. which he takes from the collection of essays of Polish authors, are in direct contradiction to his conclusions. On the contrary a whole series of quantitative analyses, made by Marxist and non-Marxist economists whom we shall mention later), shows that the capital intensiveness in the foremost capitalist countries has been falling  for some time.

Soska does not give any quantifiable data about Czechoslovakia from which one could clearly prove what will be the development tendencies of capital intensiveness. Thus his statement maybe just as hypothetical as the hypothesis which he criticizes.

Soska’s hypothesis is proved even less than the others. The quoted  studies of  Sik, Goldmann. and Flek, Nachtigal. Toms and Hajek include quantitative analysis. We may have reservations as to the methods they have used but their conclusions can be disproved only by a more accurate analysis which would prove the contrary.

 Soska mentions ( page 58) the table taken from the article of H. Flakierski, and then says at once: “The data above testify to a certain oscillation of the capital coefficient in both countries although its trend cannot be evaluated as explicitly falling. On the contrary, up until the years 1928 and 29 this capital coefficient with temporary deviations was growing.”  This, of course, is just making fun of, the reader. From the figures of the table one can observe predominantly falling trend of the capital coefficient from 1909 in the U.K. and from 1919 in the U.S.A. Before this, the capital coefficient either grew or stagnated. 12 This is explained by the fact that industrialization is a change from manual production to machine production and is thus bound to a growth in capital intensiveness. When, however, this process comes to an end, capital saving innovations predominate, because in this way it is easier to lower costs and raise profits.

This “period profile” of the development of the capital coefficient, has been discussed in the wor1d economic literature for a long time. John W. Kendrick13 ascertained on the basis of an extensive analysis that this period profile’ is not only valid for the economy as a whole but also for almost every industry.  He analyzed  33 industry groups. It appeared  that in some industries the capital capital coefficient has been falling (with capital efficiency rising) since 1899, in some since 1909, and in some only since 1919. After 1919, generally, growth of the efficiency of capital prevails; a fall happens only in unique cases. For the whole period 1899 –1953 a fall in the efficiency of capital happened only in three of the 33 analyzed industries, namely in coal, (except anthracite), by an average annual rate - 0. 2%, products of wood by a rate of  - 0.4%, and industrially produced gas by a rate of  - 0.1%. Even within these groups the decline of efficiency  was very small.

In the other industries efficiency grew fastest in the electricity industry, where it grew within the period 1899—1953 at an annual average by 4.7%. The efficiency of capital in the production of electricity at that time grew annually by almost 5%.

For the whole economy of the U. S. A., Kendrick gives these data:  
The average annual growth rate of capital efficiency 14  

1899 – 1909       8                  
1909 – 1919       0.3                   
1919—1929       1.4               
1929—1937       0.9                   
1937—1948       2.7                  
1948 – 1953       0.1              
1899—1053       1.2

Apart from this he  gives additional data calculated by a different method in an appendix. They also show the similar trend. The falling trend of capital intensiveness of production is also shown  by  the Soviet economists V. Kudrov andG. Shpilko. 15 The figures are different, because they use a different method for calculation, but the result is analagous.

Capital Intensiveness of Social Production in the U. S. A. 16 
YEAR Capital            YEAR Capital 
            intensivness    intensivness  
1897        1.23                       1939         .87  
1900        1.22`                      1942         .68  
1905        1.24                       1945         .59  
1909        1.18                       1948        .67  
1919        1.10                       1950         .67  
1025        1.07                       1955         .66  
1029        1.03                       1958         .72  
1935        1.07

Secondly, Soska bases his argument on considerations of directions in technical development17  and their influence on capital intensiveness. He draws inferences from the character of technical progress in four industries (electric energy, atomic industry, automation, and chemistry) saying that they are basic for the contemporary scientific-technical revolution. But can we be satisfied with this? We must express some doubts about these seemingly persuasive conclusions, based on empirical facts. For example for almost 50 years economic development in the U. S. A. was based, on capital intensive industries such as electricity, engineering and metallurgy yet, nevertheless overall capital intensiveness fell substantially. And how can we reconcile the Soska’s conclusions with the fact that production of electrical energy is a industry where capital intensiveness in the U. S. A. fell fastest?

We must also consider the fact that very fast growing industries can exist which Soska cannot categorize into his structure of the contemporary scientific-technical revolution. Why is electronic left out? Its capital intensiveness is lower than the average, so it influences  his conclusions negatively. It is surprising how boldly he draws his conclusions, when out of the four industries about which he talks, automation raises capital intensiveness only ‘probably’ chemistry lowers it, and “the insignificant share of the atomic industry does not permit formulating conclusions about a pronounced influence of this industry on the capital coefficient in the whole economy.” 18

The influence of the growth of any industry on the average capital coefficient of the whole economy does not only depend on the direct capital intensiveness of this industry but also on the impact which this industry has on the capital intensiveness in other industries linked by input-output relations. Even if production in a capital intensive industry growth quite quickly the average capital intensiveness of the economy may fall  if the use of the products of this industry lowers the capital intensiveness of other industries. Apart from this, the capital intensiveness of the atomic industry and automation is nowadays  high because they are new. One can infer that due to fast growth the capital intensiveness of these industries will  fall sharply.

The idea that technical progress is necessarily related to a growth of capital intensiveness19 has probably its roots in the fact that technical progress in most cases leads to the control of a greater mass of the means of production by human beings in the production process. Thus, the ratio of live labor to the means of production falls. If we consider national income a product of live labor, then it only requires a step to conclude that the relation of national income to capital has to fall concurrently with technical change. But the matter is much more complicated than that, and cannot be grasped by such simple considerations.  The capital coefficient expresses a full (complex) capital intensiveness and not a direct one, so that its magnitude is influenced by complicated feedbacks in the economy. But it is mainly a value relation and not a relation of  physical magnitudes. For this reason the coefficient is influenced by changes in relative prices. Technical progress leads to a relative lowering of prices of investment goods in relation to the price of the labor. 20

  In a further argument Soska, claims that the relation between depreciation and accumulation plays a significant role. He shows that the share of depreciation in gross investments grows and this, according to him, “optically” lowers the magnitude of the capital coefficient. But he uses the concept of the capital coefficient in two distinct meanings: sometimes as a incremental (investment) coefficient, and sometimes as an average coefficient. In his tables and considerations  he apparently has in mind the average capital coefficient, i. e., the ratio of national income and total capital. The average capital coefficient does not depend on investments (whether gross or net) and thus, it cannot be distorted by a change of the share of depreciation in gross investments. All quantification of the dynamics of capital intensiveness, based on the average coefficient such as Kendrick, Kudrov and Shpilko, quoted by me, cannot be distorted by this condition and, because of that,  the case where the average capital coefficient falls, while the “real capital intensiveness” (whatever that is) grows, cannot happen.

Of course, the situation is different in the case of the incremental or investment coefficient, where  a very significant distortion can happen for two reasons:  
First, in a growing economy a certain part of the depreciation fund can be used for net, rather then replacement investments. An exact mathematical formulation of this problem was given by E. D. Domar. 21 It follows from his analysis that22 ·      

 a) if the share of depreciation in gross investments is constant (however large)  then it distorts only the magnitude of the investment coefficient and not its dynamics;

b) if the share of  depreciation in gross investments grows, then the growth rate of investment intensiveness is "optically” raised (or the rate of a fall in investment intensiveness is lowered);

c)  if the share of  depreciation in gross investments falls then the contrary, is true.

 

Thus we have here the very opposite of what Soska claims. From the table which he shows on page 62, the tendency to raise the share of depreciation in gross investments in the U.S. A. is obvious. It means that in this case a situation cannot arise where the investment coefficient falls, while real investment intensiveness grows.

The second reason for the distortion of the investment coefficient can be an impact of independent technical progress or of so-called noninvestment growth factors.  The distortion occurs because in the investments coefficient the whole increment of national income is related to investment although it was caused by it only partially.  But this further weakens Soska’s case since the greater this distortion is, the more important is the growth of non-investment factors and the less important are investments. This is the very opposite of what he wanted to prove. 23

In view of the fact that the investment coefficient has these deficiencies, present-day economic science has switched to other instruments of factor growth analysis.  This kind of analysis also confirms the decrease in importance of extensive expansion of capital for economic development.

 

 

IV

 

It is obvious that in the present discussions, we are not concerned so much about general tendencies but by the question of how to solve present problems of the Czechoslovak economy. I think that it cannot be proved that the only possible way of overcoming stagnation in Czechoslovakia is a substantial increase in the rate of accumulation with the subsequent reduction of already low growth rate of personal consumption. At least equally possible is a strategy which leads not to a further "creation of resources”  but to a more efficient utilization of the immense stock of accumulated capital.

Today of course we cannot claim that development will follow one way or the other. Not because  it will be determined somehow by objective forces, but on the contrary because it depends on numerous economic decisions that will be made in future. The efficiency of the economy as a whole depends on decisions about choice of technology of production, about utilization of scarce resources and also on how well are economic decisions coordinated.

If we do not succeed in actually constructing a better mechanism of functioning of a socialist economy, we shall probably be forced back to the logic of the old system. Loses arising from non-rational decisions, from waste of limited resources and imperfect economic coordination, will have to be offset by a further accelerated "creation of resources" and by further "belt tightening. " We can imagine this kind of development but it is difficult to imagine that during such a development socialism could prove its superiority over capitalism.

The hopes of the new management system are founded on the belief that economic development, based on the quantitative piling of the means of production, but accompanied by the low utilization of a potential stock of human intelligence, by a general decay of initiative, and insufficient flow of innovations, can be changed into a development where the human factor will enhance the productive force of material factors of  production. Hence the central problem facing our economy now  is how to create a system where decision-makers would receive sufficient amount of relevant information,  where the criteria of economic decision-making would be undistorted and where --and, this is most important--  there would be sufficient incentives in all parts of the economy.

That our economy suffers from insufficient resources is only an optical illusion.  The lack of resources is a consequence of inefficient utilization of existing resources. What the economy really  needs  are incentives that would make people interested in getting maximal social effect out of existing resources. If we embark in the new system with a further slow­-down of consumption (or even lowering of real wages), we shall not generate such interest but rather strengthen the already widespread distrust in economic changes in our country. Present-day economic theory has already established a close correlation between growth in living standards and growth of social labor productivity. 24

 

FOOTNOTES

 

1       Planovane hospodarstvi, 2/1967  [1] back

2     Planovane hospodarstvi, 8 – 9/1968  [2] back

3   “A general expression of their creation and use is the fund of accumulation”  Planovane hospodarstvi, 8 – 9/1968, p. 143.  back

4 For example on pages 148 and 152 op. cit. he says that inflation “accelerates the expanded reproduction of growth resources” by which he means, as follows from his preceding presentation, that inflation causes redistribution of national income in favor of accumulation.”    back

  5  These are mainly the following  articles: O. Sik,  A Contribution to an Analysis of Our Economic Development, Poiticka ekonomie, [3], 1/1966; J. Goldmann and J. Flek, An Economic Growth Model in Socialism and a Criterion of Planned Management Effectiveness, [4], Planovane hospodarstvi  3/1996; V. Nachtigal, Extensiveness and Effectiveness of Czechoslovak Economic Development, [5], Politicka ekonomie, 4/1966; M. Hajek, M. Toms, The Production Function and the Economic Growth of Czechoslovakia 1950-1964, [6], Politicka ekonomie 1/1967      back

6 A similar criticism of this law we find in works of  Feldman, Dobb,  Kalecki and others. See e.g., O. Kyn, Chapters from the History of Economic Thoughts, part III, Theories of Economic Growth, [8], SPN, Prague, 1966.     back

7 Collection Theories of Economic Growth and Present-Day Capitalism, pp. 23-24, NCSAV Prague [9]     back

8 Michal Kalecki writes in his  Outline of the Theory of Growth of a Socialist Economy [6]. (NPL, Prague.1966) on page 96. about the process of growth acceleration by raising investment intensiveness: 'In no cease can it be opportune to prolong  this process ad infinitum. In such a case permanent growth of accumulation would gradually lower the share of consumption to zero, which is absurd... Sooner or later it will be necessary to stop the growth of investment intensiveness."     back

With permanent capital intensive technical progress at non-decreasing rate of growth, the rate of accumulation need not grow boundlessly (there could be lim a < 1 for t approaching infinity ) only if the growth rate of investment intensiveness would approach sufficiently quickly zero. But then there would exist a time period after which the rate of change of capital intensiveness  would be less then  any arbitrarily small number. This means that in such a case it is possible to find a period after which the growth of capital intensiveness will be so minute that technical progress would be  virtually neutral.     back

10  The initial efficiency of capital  b = 0.5.     back

11 Many economists proceed from this opinion, especially those who use the Cobb—Douglas production function. See e. g. R. M. Solow.A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics, February 1958, or J.E. Meade, ‘A Neoclassical Theory of Economic Growth.’ London, Allen and Unwin, 1961 and others. The Idea of a choice of technique we find even among the models which are not based explicitly on the Cobb—Douglas production function; e.g., A. K. Sen. Choice of  techniques; Maurice Dobb, An Essay on Economic Growth and Planning; Nicholas Kaldor, Essays on Economic Stability and Growth; Joan Robinson  Essays in the Theory of Economic Growth; etc.    back

12 The same explanation of the dynamics of the capital coefficient is given by H. Flakierski, see the above quoted collection, p. 143. The falling trend is still more expressive with the marginal capital coefficient in the U.S.A.which according to the estimate of W. Fellner, reproduced by H. Flakierski was 5.08 in 1919, 3.30 in 1929, and 1.2 – 1.5 in 1950.    back

13 Productivity Trends in the US, Princeton, 1961.    back

14  This indicator is identical with the parameter f in our mathematical model     back

15     V Kudrov C. Shpilko: Tempi i proporcii obsschestvenogo proizvodstva v SshA, Moscow 1966.‘    back  

16 V Kudrov C. Shpilko op. cit. p 117    back

17 These considerations are taken from the Z. Chrupek’s article.    back

18 Z. Chrupek in the quoted collection: Theories of Growth p. 275.    back

19 In a somewhat different form this idea maintained itself for a long time among Marxist economists as the dogma of the growth of the organic composition of capital.     back

20                This process can clearly be seen in the table, mentioned by Kendrick, op. cit. p. 121.   back

Relative factor prices in the U.S.A. (1929- 100) 
            Year            Labor            Capital 
           1899             90.7                 130 
           1919             97.6                 106.6 
           1921           100                    100 
           1937           113.3                  72.5 
           1948           105.8                  85.2 
           1957           124.3                  53.9     back

21 See E. D. Domar, "Depreciation, Renewal and Growth." seventh essay from  “Essays in the Teory of Economic Growth” Oxford University Press, 1957, and also Oskar Lange. The teory of Reproduction and Accumulation. NPL 1965.    back

22 These relations are very clearly seen in the table on page 110 of the above-quoted work of Oskar Lange      back

23 See e. g. the above quoted article by M. Toms and M. Hajek: “Determinants of Economic Growth and the Integral Productivity”    back

24 See e.g.. the lecture of A. L.Vainshtain at the Econometric congress in Warsaw     back

 

 

 

 

 

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