The controversy between Hayek and Keynes in the 1930s is probably one of the best‐known disputes in economics and several comments have been made on this episode (Hicks, 1967; Machlup, 1977; Fletcher, 1987). In the assessments little attention has been paid to the development of the ideas of the two...

This paper discusses trade mechanisms in pollutionpermit markets. Proofs are given, that sequential,bilateral trade in tradeable emissions permitsconverges to a market equilibrium with minimal totalcosts of pollution control. If ambient or depositionpermits are traded, the convergence of...