The Other Growth Model

Robert Solow’s neoclassical growth theory, to his surprise, provides the mainstream framework for the coherent market-centric DSGE model used today to explain highly stylized versions of actual trend and cyclical economic performance. Arthur Lewis’ two-sector growth model, after some generalization, … 
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Modeling Acute Instability

The most costly macro breakdowns are always associated with extreme nominal-demand instability, making mainstream inattention to that problem class a puzzle. The GEM Project is an exception, supporting a coherent acute-instability model consistent with relevant evidence. (Chapter 6) Beginning with … 
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Hayek Finally Got It Right

In his The Clash of Economic Ideas (2012), Lawrence White nicely captures the essence of the Austrian School of business cycles:  “The Mises-Hayek theory was first and foremost a theory of the ‘upper turning point’; it aimed to explain why … 
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Reprising the Modern Theory of Wages

Now that the GEM Project website has been up and running for a while and traffic has increased, it is probably useful to reprise the initial blogs that summarize the foundational ideas of generalized-exchange macroeconomics. What follows is the first … 
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Practical Macro Core

The GEM Project intuitively generalizes rational, price-mediated exchange from the marketplace to the workplace. That powerful innovation identifies three principles that constitute the practical core of macroeconomics. Two are recognized as hypotheses from which Samuelson cobbled together his Neoclassical Synthesis … 
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Deconstructing Macro Theory

I am writing this from a summer house situated in beautiful sand dunes and beach on the Eastern Shore of Lake Michigan. It is a fitting venue for musing about freshwater macroeconomics. This week’s blog has been stimulated by my … 
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