Abstract
i. The reading of Professor Lange's last book on Price Flexibility and Employment' aroused in my mind three sets of observations which I should like to pursue in this paper. Firstly, I propose to discuss the general assumption, implicit in Professor Lange's analysis, regarding the substitutability among factors of production.2 The second set of considerations is related to the element of irrationality which is contained in human behaviour. Particularly, I shall try to make clear the difference between human action and human thought, and thereby see whether and to what extent it is possible to draw relevant deductions from Professor Lange's analysis. Finally, I shall consider the true effects of movements of the rate of interest, as one of the allegedly most important stabilisers of full employment equilibrium. But before I go on with my observations I shall try to summarise (I hope correctly) Professor Lange's analysis.
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