ABSTRACT
The purpose of this chapter is to simulate the traverse of full employment and discover what may occur as a result along the time path. A crucial feature of Capital and Time is the existence of ‘time’. Hicks was aware of the importance of time when he wrote:
The paradox has arisen because the diagram has concealed what will have happened – what must have happened – on the way. Fig.14 is no more than a piece of steady state analysis; and for the study of a Traverse that is not good enough. All that is shown on the diagram is a relation between wages and interest; all that is ‘represented’ is the fact that when the wage is such-and-such, the rate of interest must be at the figure that corresponds. Nothing is said on when that position will be reached. There is a missing co-ordinate – Time.
