Exploring General Equilibrium

By Fischer Black

Book Overview

An incisive, unconventional assessment of general equilibrium theory; with a previously unpublished paper.

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.

• Format: Paperback
• Language: English
• ISBN: 0262514095
• ISBN13: 9780262514095
• Release Date: May 2010
• Publisher: MIT Press
• Length: 360 Pages
• Weight: 1.10 lbs.
• Dimensions: 0.7" x 5.9" x 8.9"
• Age Range: 18 years and up
• Grade Range: Postsecondary and higher

Customer Reviews

A deeply insightful anti-Economics economics book

Fischer Black was among the most brilliant economists of the 20th century, with an eccentric style. This book is a masterpiece that goes back to Von Neumann-Morgenstern first principles to reconstruct macroeconomics, stripping away errors due to oversimplified models and overaggregated data. The argument is short and easy to understand, although its subtleties repay many rereadings. The bulk of the book consists of short refutations of other views, organized alphabetically by economist last name (Fischer was an eccentric guy). These contain many important insights, although they require familiarity with economics terminology to understand, and the random topical order is annoying.

Good resource but not for learning macroeconomics

This is an excellent resource for a graduate student in economics to have (or for a professor). It has good summaries of many articles and clear information on a wide variety of issues relating to macroeconomics. However, it would be extremely difficult to learn macroeconomics from this book. It assumes that you already have a wide knowledge.