This book arose out of the seventeenth Summer Workshop held at Warwick University on 12–30 July 1993, with the same title as this volume. We had felt for some time that there was a need for a conference to bring together some of the people involved in the study of various ‘market imperfections’ and their implications for macroeconomics. We had become aware of the rapidly burgeoning literature in the particular area of imperfect competition and macroeconomics in the course of writing our survey (Chapter 2 in this volume) over the period 1988–91. We wanted to organize a conference that would explore this along with other topics: financial market imperfections, bounded rationality, and menu costs, to name but a few. The idea coalesced with some encouragement and prodding from Marcus Miller, and our idea was generously funded by the Economic and Social Research Council of the UK, and by the Human Capital and Mobility Programme of the EU Commission.

The workshop was a great success, and we would like to thank all those who came for making it so. All of the contributors to this volume attended the workshop. The papers appearing here were either given at the workshop, or were ‘commissioned’ there specially for the volume, with the exception of two reprints (Chapters 2 and 4) which are included because they particularly complement the general theme.