An article by Michael D. Intriligator entitled Embodied Technical Change and Productivity in the United States 1929-1958 appeared in the February 1965 issue of this REVIEW. To judge the importance of embodied and disembodied technical progress, Intriligator computed 40 correlations of gross national product, excluding GNP originating in government and housing, with capital and labor input. All 40 regressions resulted from combining four alternative measures of labor input, three of them mine, with five alternative capital series based on different assumptions about embodiment, and two methods of handling trend. To match Intriligator's GNP measure, labor input must exclude all general government employees. The data Intriligator actually used, however, include all government employment: civilian, military, and work relief. The period covered, 19291958, spanned the Great Depression, World War II, and the Korean War, periods in which the share of government employment was fluctuating violently, as well as a postwar period in which most of the employment increase was devoted to government. Intriligator's results consequently seem to have no apparent meaning. An interesting feature of the article is that all 40 regressions Intriligator computed have high correlation coefficients despite his use of irrelevant data; only one is below 0.95 and most are above 0.98. This may give further reason for skepticism about the utility of inferring causation -in this case, degree of embodiment-from minor differences in the goodness of fit of time series.

M OST descriptions of the behavior of private saving have dealt separately with net personal saving, net corporate saving, or capital consumption allowances. However, for many analytical purposes, and particularly the appraisal of inflationary or deflationary pressures, it is gross private saving as a whole the sum of these three components -that is crucial, and analysis of the details is of interest mainly in arriving at the implications for this total. Should it appear that total gross private saving bears a more stable relationship to key income or output measures than do its components, analysis could be both simplified and improved by dealing with this total directly. This is, in fact, what the data for past periods show. I recognize that this conclusion is contrary to the common a priori expectation, that it may not hold in the future, and that in retrospect it may appear as merely a statistical oddity. But the record of past experience seems to me clear enough to demand exploration. In the Survey of Current Business for January I955 1 I pointed out that the ratio of gross private saving to gross national product was about the same in I929 and each of the years from I948 through I953. This ratio continued to hold in I954, I955, and, on the basis of preliminary estimates, in I956. In these ten relatively prosperous peacetime years-all those for which estimates are available except for I946 and I947, when the saving rate clearly was sizably distorted by war-time influences gross private saving averaged I4.63 per cent of GNP, and never deviated more than onehalf percentage point from the average.2 The article cited also pointed out that in the 1930-4I period of substantial underutilization of resources, when saving fluctuated much more than GNP, a formula taking account of the difference between current-year GNP and GNP in the most recent year of substantially full employment would satisfactorily describe the saving pattern.3 As a result, gross private saving for the entire I929-56 period, excluding I942-47, is quite satisfactorily described by the following simple formula: Gross private saving = I463 Po .27 (POP.) where PO is the gross national product in the most recent high-employment year (including the current year) and P1 is gross national product in the current year. For high employment years, PO and P1 are the same, and we have simply gross private saving equals I4.63% of gross national product. The gross private saving estimate calculated from this formula for each of the 22 years of the period is compared with reported gross private saving in Table I.4 The mean deviation is $0.7 billion, or 3.I per cent of the average level of reported gross private saving. This is probably within the margin of error of the reported data. Indeed, reported gross private saving is more closely approximated by this formula than by the alternative estimate of gross private saving that can be derived from the national accounts statistics by deducting the government surplus on income and product transactions from gross investment. The difference between the two estimates, which is equal to the statistical discrepancy in the national accounts, averaged $I.o billion. For the ten high-employment years included in the period with which this note is primarily concerned, saving calculated as I4.63 per cent of GNP differs from reported saving by an average of $o.8 billion, or I.9 per cent, and the statistical discrepancy averages $I.3 billion.

Edward F. Denison, Capital Formation and the Recent Productivity Slowdown: Discussion, The Journal of Finance, Vol. 33, No. 3, Papers and Proceedings of the Thirty-Sixth Annual Meeting American Finance Association, New York City December 28-30, 1977 (Jun., 1978), pp. 1006-1010