Costs and Consequences of Inflation

Abstract

One approach to the microeconomic foundations of macroeconomics problem takes the frame and the components of standard ‘neoclassical’ theory as the given starting point. One asks what can be used and what needs modification for purposes of representing the movement of a macro-system through time and into a future that is in some respects unknowable. The aim is to define and, if possible, solve the analytical problems that emerge at the levels of individual conceptual experiments, market experiments, and general equilibrium experiments. I have pursued this approach in other recent papers¹ but am running into diminishing returns.

I am thankful to Armen Alchian, Robert Clower, Ben Klein, John McCall and Sidney Afriat for comments and obliged to declare them free from responsibility. Financial support of the Liberty Fund is gratefully acknowledged.