Once the true relationship between inflation and unemployment is understood, with luck and skill, a free lunch is possible.

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.

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

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.

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