Two-Venue Theorem

 

Involuntary job loss is at the heart of the mainstream stabilization-theory muddle. For policymakers, the socioeconomic problems of employment and income loss are central to business-cycle pathology. Many critics of modern macro modeling argue the failure of New Keynesians (NK) … 
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The Centrality of Nominal Wage Rigidities

 

Macroeconomic stability is a cornerstone of the modern social compact. Our capacity to under-stand, and design policies to beneficially influence, the cyclical behavior of employment, output, income, and inflation is entrusted to macroeconomists. It is a responsibility for which mainstream … 
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Malinvaud’s High Bar

 

 “[T]he characteristics of great theoretical achievements are clear foundations, consistency with many observed facts, unification of theories which previously appeared as fundamentally distinct.” That high bar was set Edmond Malinvaud (1977), the late, greatly admired French macro theorist. Mainstream New … 
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Conundrum Macroeconomics

The term I came up with is “conundrum macroeconomics”. The heretofore nameless phenomenon refers to analysis with models that lack the capacity to accommodate, at least coherently, the existence of the activity being studied. The urge to name that curious … 
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Evidence Part VI

 

Nature of workers. When economic theorists do permit worker behavior to vary, they almost always motivate employees solely by a desire to shirk. Positing a universal urge to loaf on the job combines with monitoring costs to animate the shirking … 
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Evidence Part V

Various forms of the input-outcome framework featured in GEM Project have been used extensively by psychologists and sociologists in studies designed to explicate behavior while engaged in tasks for pay. Named “exchange theory”, the general approach was developed in the … 
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Evidence Part IV

 

An early Daniel Yankelovich poll of business leaders asked the question: Does job dissatisfaction lead to high turnover, tardiness, loafing on the job, poor workmanship, and indifference to customers and clients? Of the 563 respondents, 94 percent thought that such … 
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Evidence Review Part III

One of the most most powerful indictments against consensus mainstream market-centric general-equilibrium modeling is that it does not accommodate pure wage rent (PWR). The descriptor “pure” distinguishes the concept from more familiar versions of wage rent, typically associated with labor … 
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Evidence Review Part II

This post continues to set the stage for our in-depth review of the evidence relevant to the GEM Project’s model class. Once generalized-exchange analysis is extended beyond its baseline,  optimization occurs over sequential periods of unchanged and variable reference standards … 
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Evidence Review Part I

Reviving stabilization-relevant macroeconomics, a principal objective of the GEM Project, requires innovative modeling that is both rooted in the neoclassical tenets of optimization and equilibrium and consistent with the broad range of relevant evidence, This Blog has focused on the … 
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