Introduction

Within the analysis of multisectoral growth models emphasis has in the last two decades shifted to problems of structural change and technological unemployment. The analysis of an economy which originally has been in a steady-state equilibrium but which was disturbed by a change in one of the exogenous determinants of growth, such as technical progress, the supply of labour or natural resources, is one of the most challenging problems in economics. The investigation of the macroeconomic consequences of such disturbances and of the conditions that have to be fulfilled in order to bring the economy back to an equilibrium growth path, is at the centre of traverse analysis, which ‘is the easiest part of skiing, but the hardest part of economics’. Although traverse analysis is linked with equilibrium growth which it takes as a starting point, in contrast to long-run balanced growth analysis it is a short- or medium-run analysis which marks an important step forward in coping with the dynamic nature of the problems and thus rejuvenating growth theory by liberating it from the overall preoccupation with steady-state growth paths. Pioneers in the field of traverse analysis are Adolph Lowe (1976) and John Hicks (1965, 1973) who in chapter 16 of his Capital and Growth was the first to formally define a traverse.