a home
for economists
who believe
macroeconomics
can be both coherent and stabilization policy-relevant
The GEM Project blog appears weekly (Fridays). Interested economists are invited to participate by submitting comments or writing blog entries.
There are a few rules. The subject matter must be related to macroeconomics and macroeconomists, especially in their grand struggle to construct models that are stabilization relevant and internally coherent. Blog entries should be 1,000 words or fewer, and author name and association are required.
These six blogs are the cliff-notes version of the GEM eBook. In bite-sized portions, they capture the essentials of Generalized Exchange Macroeconomics:
New Keynesian theory, the go-to model in modern macroeconomics, is a quagmire of seemingly insoluble puzzles. Readers of this Blog know that much of the difficulty is rooted in the New Neoclassical Synthesis, the academy’s governing directive for acceptable research. …
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Students are typically introduced to macroeconomics via the New Keynesian (NK) 3-equation model rooted in friction-augmented general market equilibrium. This post features the version in the popular textbook, Macroeconomics, by Carlin and Soskice (C&S). The first equation relates inflation-adjusted total …
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The editors of the American Economic Journal: Macroeconomics (AJE:M) have selected “Deconstructing Monetary Policy Surprises – The Role of Information Shocks” by Marek Jarocinski and Peter Karadi (hereafter J&K) as the best article appearing in their journal in 2020. The …
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The GEM Blog’s month-long series on modeling of management reveals New Keynesian (NK) theorists’ badly incomplete understanding of the Industrial Revolution. The impact on the evolution of productivity-enhancing capital equipment is adequately grasped. Many also know that those technological advances …
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As has become clear over the past month, mainstream New Keynesian (NK) theorists do not even try to inform their research with a recognizable treatment of management. This post demonstrates their negligence cannot be the result of a lack of …
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Last week’s post called out mainstream New Keynesian theorists’ for their universal assumption that labor management is best described by the long discredited drive system, rooted in arbitrary direct supervision. Of all macroeconomists’ laughable assertions about what goes on inside …
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The generalized-exchange model’s large-establishment venue (LEV) provides an important role for the active management of labor. Most notably, human-resource departments, universally present in complex, highly specialized firms, are tasked to calibrate firms’ modal workplace-exchange relations. (See last week’s post.) GEM …
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The marketplace-workplace synthesis featured in this Blog addresses a lot of debilitating gaps in dominant NK macro theory. Among the most notable, the two-sector approach provides a much more robust role for optimizing management. Mainstream modeling relies on market exchange …
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It is hardly surprising that the American Economic Journal: Macroeconomics greatly interests the GEM Project. The relatively new journal, first appearing in the winter of 2009, provides a real-time record of the unhappy run of the New Keynesian (NK) dominance …
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Last week’s post summarized Michael Woodford’s five key elements of the 21st-century consensus among macro theorists. He celebrates the general acceptance of the friction-augmented general-market-equilibrium (FGME) framework in modern analysis: “… the study of business fluctuations is no longer driven …
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