The Lost Generation, Part II

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We know that mainstream macro theory, rooted in friction-augmented market-centric general equilibrium, cannot accommodate meaningful wage rigidity. We know that MWR is defined by its capacity to rationally suppress wage recontracting. We know that the absence of MWR mandates the … 
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The Lost Generation

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I just reread Jordi Gali’s short 2011 book, Unemployment Fluctuations and Stabilization Policies, that he based on his Zeuthen Lectures. The GEM Blog has been hard on that book in the past. I remember being especially put off by its … 
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Helping a Great Economist: Edmund Phelps

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In his extraordinary body of work, Edmund Phelps was fearless in his determination to introduce labor pricing that is both micro-coherent and stabilization-relevant into modern economies. Overall, his macroeconomics reflect a grand, cheerful quest for answers to important questions. A … 
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More on New Keynesian Macro Silliness

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An on-going task of the GEM Blog is to monitor the American Economic Journal: Macroeconomics (AEJ:M), flagging the more egregious use of neoclassical general-market-equilibrium modeling to explain actual behavior in modern, highly specialized economies. The exercise is always discouraging, but … 
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The Criticality of Chronic Wage Rent

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I have become increasingly interested in how macroeconomists think, or more accurately don’t think, about wage rent. The GEM Project features the most consequential variant of that phenomenon, which it names “pure wage rent”. PWR does not require formal collective … 
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Helping Great Economists: Joan Robinson

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Joan Robinson is the most surprising theorist never to be awarded a Nobel Prize in Economics. She made fundamental contributions to understanding the limits of mainstream competitive market-centric theory, perhaps helping to explain why an economics establishment deeply committed to … 
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Helping a Great Economist: Arthur Burns

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It is a tenet of the GEM Project that professional greatness is not limited to making important contributions to economic theory. Economist policymakers whose experience and skill, especially in crisis, have substantially enhanced our collective well-being are included in the … 
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