In a WSJ op ed (9/28/2018), Martin Feldstein warned that “another recession is looming”. There are reasons for readers not to be alarmed. Newspaper editors are notoriously eager to publish anything that foretells the serious pain of deep macro contractions. …
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Unapologetic Market Centricity
The GEM Blog argues that mainstream macroeconomics is stabilization-policy irrelevant, providing consistently bad advice to policymakers. Non-economist friends tell me I must be exaggerating. They cannot believe that well-known theorists reject the core message of the GEM Project: the necessary …
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WSJ Lessons from the Great Recession
The Wall Street Journal used the 10th anniversary of the Great Recession to instruct its readers on the lessons from the massive market failure: “It has been 10 years since the financial crisis. The Wall Street Journal is taking a …
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What Stabilized the Economy in 2009
Last week took a critical look at Andrew Ross Sorkin’s underdeveloped take on the macrodynamics of the Great Recession. What follows, originally published on April 8, 2016, looks at what actually worked in containing the 2008-09 extreme instability. Hint: It …
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Andrew Ross Sorkin on the Great Recession
It was ten years ago that Lehman Brothers declared bankruptcy. The GEM Project has identified that as the point at which the 2008 total demand disturbance pivoted from its stationary to its nonstationary phase. That’s a big deal. As readers …
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Elaborating on Rationality
Three Influences
There are three primary sources of inspiration for GEM Project. First, and foremost, is the extraordinary body of work by the first-generation Internal-Labor-Market (ILM) theorists, notably including Clark Kerr, John Dunlop, Richard Lester, Lloyd Reynolds, Frederick Harbison, Charles Myers, …
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Quite A Man
Robert Lucas led the macro academy’s rejection of both the keystone status of meaningful wage rigidity and the consequent centrality of nominal demand in stabilization analysis. His influence has been enduring despite a remarkable fact. Lucas’s seminal contribution, i.e., the …
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Mainstream Macro Modeling: A Fundamental Question
General market equilibrium (GME) has been the mainstream model for serious macroeconomic research for generations of theorists. Rooted in the late 19th-century contributions of Walras and the Continental School, its longstanding dominance has persuaded many modern economists that GME thinking …
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A Fed Economist Explains the Great Recession
Until his retirement early this year, Robert Hetzel was Senior Economist and Research Advisor at the Federal Reserve Bank of Richmond. He was one of the surprisingly few Fed economists attempting to make comprehensive sense out of the Great Recession. …
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Evidence Interpretation Gone Bad
I was culling my library last week and ran across Peter Chinloy’s Labor Productivity (1981). I remembered that the book, nearly four decades ago, clearly illustrated the difference between insightful and misleading interpretation of evidence. Its lesson is even more …
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