Full text: From Stagnation in the 30s to Slow Growth in the 70s.

8 
We consider a closed private economy, a two class model, 
in which workers do not save. Let us define a vector q 
of the quantities of the various commodities ( only final 
products are considered, the economy 
integrated, so that costs consist only of wages and salaries) 
We write then for the gross national income Y and for the 
wage and salary bill W the following equations: 
Y = /3 q, 
(D 
(2) 
+ w 1 . 
o 
cost per unit are vectors. The income Y and wage bill W 
are given by the inner product/°f the vectors and are 
therefore scalar. 1 is the unit vector and w Q are the 
fixed wage and salary cost. 
At the break even point q Q income equals wage and salary 
cost, we have therefore 
(3) 
From this follows that 
(4) 
o 
f h y \ ) Hd? tjtf ~ Wol 
The difference between equations (1) and (2) taking account 
of (4) will give the profits ( a scalar ): 
)( q - q 0 ) 
(5) 
P = Y 
W 
We now make use of Kalecki's profit equation 
P = I + C 
where I is the investment and C the consumption of capitalist 
which we assume, for simplicity, to be independent of profits
	        

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