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AbstractThis article illustrates numerically that the adjustment path of the economy will not show how a national policymaker may be misled by overaggregation until it is too late for correction. Labor and other resources are overaggregated in the equilibrating mechanism of most economic models, tending to mislead policymakers regarding both the amount and direction of change of important variables. Overaggregation also hides important constraints and tradeoffs which masks opportunities to use slack resources. In turn, this creates unnecessary dilemmas, such as that between inflation and unemployment which plagued the progress of the Humphrey‐Hawkins Bill. The article first illustrates the hypothesis using simple models. Then its relevance to current analysis and planning is discussed.

AbstractMost researchers have not recognized that the main problem of an economic system is the excessive time it requires to reach equilibrium (and consequent inadequate control). An extension of control theory is applied to the Competitive Equilibrium Model. The calculation shows, in contrast to previous results, full employment, if attained, may be maintained for nonzero periods. However, ill condition and other factors cause a very slow approach to optimum. Consequently, constant social and other changes keep a complex economy far from optimum.

AbstractCalculating the solution for a mixed integer linear programming problem has been problematic for any sizable dimension because of the time required. Accordingly, an improved method for the fixed charge problem is presented here. The method is a modification of a bounding technique first suggested by Balinski, and it exploits fully the ratio of costio‐use, first described by Cooper and Drebes. It exploits those local properties which have global application so that enumeration is confined to those relatively few combinations which cannot be evaluated otherwise.