The first thing a new-comer student to economics encounters in the "law of supply and demand". It is an ancient story of negative feedback control. Discrepancies between amounts demanded and supplied lead to changes in price which reduce the discrepancy and, plausibly, equilibrate the market. A great many economists believe that a system consisting of an arbitrary number of such markets must surely function in essentially the same way and that, if anything appears to go wrong, it must be because some sort of interference with the adjustment of prices.

The lecture will discuss a variety of cases in which, although prices are flexible, a system of markets fails to home in on its general equilibrium. The examples are drawn from persistent depressions, very high inflations amd from “fat tail” episodes in financial markets

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