Beyond Hicks' sectorial traverse: unsustainable growth and flexibility of the productive system

While most recent studies of the traverse seem to favour the Austrian approach, Hicks himself still held to the sectoral approach. After a brief study of the main features of the Hicksian sectoral traverse, in particular the instability associated with a highly mechanized investment sector, the paper focuses on the required reproportioning of the capital stock and of the labour force for full employment to be maintained. The unsuccessful reproportioning is described in two cases: when dynamic instability occurs, and when the new rate of growth of the labour force exceeds the maximum rate of accumulation. The paper ends with a discussion of the solution advanced by Hicks himself, i.e., the introduction of flexible rates of capacity utilization, as they can be found in Kaleckian models of growth