The Share Economy: Conquering Stagflation

Abstract

Martin Weitzman has written a serious book about the chronic prob? lem of stagflation that has plagued the United States economy for the past twenty years. As discussed below, I have grave reservations both about the underlying microeconomic model on which Weitzman relies and about the basic policy proposal that he advances. Neither, in my judgment, is sufficiently microanalytic to come to terms with the fundamentals of contracting in the labor market?the key market in Weitzman's analysis of stagflation. Of books that work within the firm-as-production-function tradition, however, Weitzman's treatment of stagflation is the best of its kind. It has justifiably attracted wide attention and received high praise.