The material of this paper is set out in four sections. In the first one be the objective function of the LMF and the partial and general equilibrium implication of the postulated behavior of LMF are discussed. The literature is concerned with both conditions of perfect and imperfect competition; furthermore, the effectiveness of economic policy is investigated. In the second section the static analysis is carried into a dynamic framework where investment and other intertemporal allocation decisions are analysed. The state of the art in this area is unfortunately still at an initial stage. This is also true of our knowledge of the internal organization of LMF, surveyed in section three. The paper ends with a succinct overall assessment.