The Epsilon Society

Abstract

Any economic theory that attempts to explain production and distribution in the First World countries must construct an abstract society in which two outcomes of the economic process are necessary. First, the labor market must always operate with unemployment. Second, there must be interplay between real and monetary variables. These constitute notable empirical regularities of the First World countries (Facts 1 and 4, as listed in chapter 2). This chapter presents a new abstract society—called epsilon society—with the intention of meeting those challenges.