Fischer Black is known for his brilliance as well as his sometimescontroversial opinions. Highly respected for his scholarly writings in finance, henow moves into different territory with this incisive, unconventional assessment ofgeneral equilibrium theory and what that theory reveals about business cycles, growth, and labor economics.The general equilibrium approach, Black asserts, can beused to explain most of the economy's behavior. It can explain business cycles andgrowth without using sticky prices, irrationality, economies of scale, or imperfectcompetition. It can explain the volatility of consumption, output, sales, investment, and inventories with axiomatic utility and constant-returns-to-scaleproduction. It can explain temporary layoffs, job changes with and withoutintervening unemployment, and the behavior of vacancies. It can explain lower wagesin part-time jobs, wages that increase rapidly with time on the job, and the forcesthat cause migration from poor to rich countries.Although the general equilibriumapproach can't be tested in conventional ways, it can be used to generate examplesthat explain stylized facts -- generalized observations from the real world -- thathave preoccupied macroeconomists for the last decade. Black contrasts hisinterpretation of these facts with conventional interpretations. Finally, he reviewsa substantial body of literature on these topics.