Book excerpt: Originally published in 1986, this book discusses how the proper boundary between the lexicon and syntax should be defined and examines various word formation processes in Japanese and English which involve some interaction of morphology and syntax. It also questions the plausibility of the lexicalist hypothesis as a theory of universal grammar. It proposes a rule typology approach to the syntax/lexicon dichotomy and looks at deverbal nominals and compounds in English and Japanese and discusses their similarities and differences. In particular the important role argument structure plays in morphological derivations is analysed.