Economics is an endless challenge. It is intellectually demanding, and practically important. The intellectual challenge can only be met through basic research – the patient construction of knowledge, which has advanced dramatically over the past decades, yet remains grossly inadequate today. The practical challenge calls for making the best possible use of whatever knowledge we have, in order to assess or suggest policies. That practical challenge also leads economists, occasionally, to redefine research priorities, in an attempt at understanding better the policy issues of the day. But even then, the long-run goal of constructing economic knowledge creeps under the surface, ready to take precedence again.

Except for Chapter 2, which was written in 1972 and published in 1975, all the essays collected in this volume have appeared over the decade 1979–89. They are representative of my attempt, starting in 1978, at understanding better the nature of, and likely remedies to, the macroeconomic problems of Europe – in particular persistent unemployment.

The quest for a better understanding was definitely practical, as it became increasingly clear that the recession born in 1974–75 would not be short lived; but it was also intellectual, as the reading of Malinvaud's Theory of Unemployment Reconsidered (1977) had revealed to me how a new synthesis of microeconomic and macroeconomic thinking could be sought.

With welcome support form the Fonds National de la Recherche Scientifique, I took sabbatical leave during academic year 1978–79 and set to work – knowing well that ‘learning-by-doing’ was the only realistic way.