Resurrections and a Wrecking Ball

The GEM Project is about resurrections, reviving particular schools of thought long left for dead. Most central is the large-workplace modeling conducted by a loose collection of 20th century labor economists. Clark Kerr, John Dunlop, Frederick Harbison, Charles Myers, Richard … 
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A Poem

As demonstrated by the GEM Blog, today’s macro academy defends its market-centric general-equilibrium model class even at the cost of stabilization-policy irrelevance. Such Ptolemaic rules of engagement can perhaps be understood as mainstream theorists’ attempt to define a comforting space … 
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MWR Research Has Disappeared

It is testimony to the determined Ptolemaic defense of mainstream market-centric, general-equilibrium macro theory that publication of research on the existence and nature of meaningful wage rigidity (MWR), defined by its capacity to rationally suppress wage recontracting, has disappeared. The … 
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The Blame Game

Washington, Wall Street, and – most importantly – Hollywood agree that the 2007-09 Great Recession was caused by excessive lending to unreliable low-income home buyers. It was an open secret that subprime applications frequently inflated borrower incomes, causing financial seers … 
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Three Policymaking Lessons

 

The GEM Project reconstructs macroeconomic theory to be  simultaneously micro-coherent and stabilization-relevant. It is a powerful guide to policymaking capable of containing welfare losses that periodically result from the demand propagation of macro shocks. In this post, generalized-exchange analysis identifies … 
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Stabilization Policy, Part IV

This post concludes the GEM Blog’s four-part overview of the public policy on how to prevent future Great Recessions. The consensus quickly emerged in the aftermath of the 2008-09 extreme instability. First, the three pillars of Washington’s curious thinking on … 
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Stabilization Policy, Part III

This post continues examining the stabilization policy that emerged in the aftermath of the Great Recession. It provides more detail on some of the mistakes made in pursuit of a flawed strategy.

First pillar mistake. Dodd-Frank’s prohibition of injections of public … 
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Stabilization Policy, Part II

As promised last week, this post provides a thumbnail description of the GEM Project’s explanation of extreme instability. Such instability is defined as contractions in total nominal spending that are too powerful to be reversed by automatic fiscal stabilizers and … 
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Stabilization Policy, Part I

The greatest damage done by the Ptolemaic intent of mainstream macro theorists is providing support for ill-conceived stabilization policymaking. Exhibit A is the manifestly wrong policy consensus on how to prevent future Great Recessions that emerged after the 2008-09 crisis. … 
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