ABSTRACT
Instead of referring to the trend I could equally well refer to long-term development or long-term growth but I do not intend to deal with it in the manner of the usual growth theory which is the method of comparative steady states. I should rather prefer to deal with it in the same way as with the trade cycle which is usually represented by a difference or other functional equation which together with given initial conditions will trace out the process. The initial conditions are important because it is through them that exogenous factors are introduced into the process. These exogenous factors take account of the fact that our models cannot embrace the whole world or the whole of history and must therefore start from facts which are given from outside. The method of comparative steady states tends to bypass this problem of exogenous influences and that is only too natural since they involve great difficulties. It may be thought, however, that by avoiding these difficulties we may miss the right understanding of the actual process and expose ourselves to the risk of great misunderstandings.
