Exploring General Equilibrium

<b>An incisive unconventional assessment of general equilibrium theory; with a previously unpublished paper.</b><p>Fischer Black is known for his brilliance as well as his sometimes controversial opinions. Highly respected for his scholarly writings in finance he now moves into different territory with this incisive unconventional assessment of general equilibrium theory and what that theory reveals about business cycles growth and labor economics. The general equilibrium approach Black asserts can be used to explain most of the economy's behavior. It can explain business cycles and growth without using sticky prices irrationality economies of scale or imperfect competition. It can explain the volatility of consumption output sales investment and inventories with axiomatic utility and constant-returns-to-scale production. It can explain temporary layoffs job changes with and without intervening unemployment and the behavior of vacancies. It can explain lower wages in part-time jobs wages that increase rapidly with time on the job and the forces that cause migration from poor to rich countries. Although the general equilibrium approach can't be tested in conventional ways it can be used to generate examples that explain stylized facts--generalized observations from the real world--that have preoccupied macroeconomists for the last decade. Black contrasts his interpretation of these facts with conventional interpretations. Finally he reviews a substantial body of literature on these topics.</p>