The model of competitive equilibrium which has been discussed so far is set in a timeless environment. People and companies all operate in a world in which there is no future and hence no uncertainty.

We need to abandon the economist's notion of the economy as a machine, with its attendant concept of equilibrium. A more helpful way of thinking about the economy is to imagine it as a living organism.

Many Europeans, while admiring the strength and power of the American economy, undoubtedly feel that the system of social values which prevails in the United States, manifested in the acute problems evident in the inner cities and the level of violent crime, for example, leaves much to be desired.

Baseball players or cricketers do not need to be able to solve explicitly the non-linear differential equations which govern the flight of the ball. They just catch it.

Keynes tried to show that market economies could settle in equilibrium states in which the labour market did not clear, and in which the level of unemployment was high. He believed that this was due to a particular example of market failure, developed in his concept of effective demand.

The temptation to use mathematics is irresistible for economists. It appears to convey the appropriate air of scientific authority and precision to economists' musings.

The behavior of the economy as a whole, at the aggregate, macro-level, is built up from the individual equations at the micro-level.

The obstacles facing academic economists are formidable, for tenure and professional advancement still depend to a large extent on a willingness to comply with and to work within the tenets of orthodox theory.

Even in financial markets, the concept of market efficiency does not hold.

The reader might reflect that an awful lot of supposing has to take place in order for the quantity theory of money to be true.

In most Western economies, the general relationship is not in fact between the rate of inflation and the level of unemployment, but between the rate of change of inflation and the rate of change of unemployment.

At 2 per cent growth a year, an economy doubles in size in just thirty years.