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:
Part two of the macroeconomics of forced job loss, promised last week, has been postponed. The reason is a neighborhood 4th-of-July party, at which the buzz was about ill-considered tariffs and whether they would lead to another Great Recession. (A …
Read More | Comment
Modern macro theory is a quagmire of seemingly insoluble puzzles. A prime example is that the New Neoclassical Synthesis (NNS), the consensus macro framework organized around dynamic market-centric general equilibrium, produces much more mild recessions than is consistent with the …
Read More | Comment
The GEM Project’s fundamental contribution to stabilization-relevant macroeconomics is its reworking of aggregate supply. In particular, it derives meaningful wage rigidity, capable of rationally suppressing wage recontracting, from axiomatic principles. GEM aggregate supply better reflects the highly-specialized, large-scale production of …
Read More | Comment
My choice for this morning’s beach reading (with coffee) was William Fellner’s 1976 essay, “Theoretical Foundations of the Failure of Demand-Management Policies” in the Journal of Economic Literature. I hoped that Fellner would provide some respite from consistently discouraging mainstream …
Read More | Comment
I just read a provocative paper, “Technology at Work: The Future of Innovation and Employment” (Oxford Martin School, University of Oxford, 2015) by Carl Frey and Michael Osborne. The authors conclusion is eye-catching: Within a decade or two, roughly half …
Read More | Comment
The retirement-funding vehicle, 401(k), may be the most recognizable name-in-numbers in the country. In a transition that began in the 1980s, defined-contribution, self-managed 401(k)’s replaced (outside of government employment) defined-benefit, employer-managed plans. Among workers who participate in firm-sponsored retirement plans, …
Read More | Comment
This post takes an admittedly wonkish look at the nature and consequences of externalities in coherent general equilibrium macroeconomics. My particular interest here is meta-externalities, the under-appreciated macro application of the textbook literature long associated with the pioneering work of …
Read More | Comment
Ronald Coase, a 20th-century economic theorist, is the intellectual Godfather of generalized-exchange macroeconomics. The opening passage of his 1981 Nobel Lecture could be used to introduce the GEM Project: “My contribution to economics has been to urge the inclusion in …
Read More | Comment
The GEM Project generalizes rational exchange from the marketplace to highly specialized workplaces that are restricted by costly asymmetric employer-employee information. Economists know that in such circumstances markets cannot efficiently price labor. That is why large complex establishments price labor …
Read More | Comment
A small set of core innovations support the generalized-exchange theory. Perhaps the most critical is the axiomatic employee proactive preference for fair treatment by management. That employers have long ago accepted that fact about their employees is broadly indicated in …
Read More | Comment
