Direct and indirect requirements: A correct economic interpretation of the Hawkins-Simon conditions

This paper proposes a correct economic interpretation of the Hawkins-Simon conditions of macroeconomic stability. First, it indicates a misinterpretation of the conditions by Dorfman, Samuelson, and Solow (1958) for the two-sector case. Then, it investigates a probable source of their misinterpretation, i.e., the confusion between the direct and indirect input requirements to support a unit of final demand, and the direct and indirect input requirements to produce a unit of gross output. Finally, a generalized economic interpretation of the conditions for the general case is developed.