Some Straight Talk

 

Mainstream macroeconomics, failing to explain the Great Recession, received blunt criticism from stabilization policymakers. Three examples suffice. First, Narayana Kocherlakota, then President of the Federal Reserve Bank of Minneapolis: “I believe that during the last financial crisis, macroeconomists (and I … 
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New Age of Ptolemy: The Labor Wedge

 

This post resumes the GEM Blog’s two months of Ptolemy. The review has tapped into a seemingly endless supply of implausible analytic reaching needed to accommodate relevant evidence within micro-coherent market-centric mainstream modeling. The embarrassing hoops ancient astronomers jumped through … 
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The Big Short: A Review

 

Let’s pause from the Blog’s emersion in the depressingly Ptolemaic nature of modern macro research. This week, I want to comment on a movie.

The Big Short must have been recently posted on some streaming service. A non-economist friend went out … 
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A Little Idea from Blanchard and Gali

New Keynesians (NK) got the short end of the stick in the New Neoclassical Synthesis, the modern macro consensus featuring rigorous commitment to micro-coherent market-centric general-equilibrium modeling. NK gatekeepers cobbled the consensus together in the late 1990s with New Classical … 
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“Very Intuitive” Labor Pricing in the AEJ:M

 The American Economic Journal: Macroeconomics was launched in 2009 during the most perilous U.S. macroeconomic crisis since the 1930s depression. The timing emphasizes that AEJ:M editors’ competence in helping guide the development of coherent, useful macro theory matters. Unfortunately, at … 
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What’s New at the Minneapolis Fed?

 

Presidents of Federal Reserve District Banks, somewhat isolated from policymaking action in Washington and but still wanting to be heard, frequently adopt a signature issue. The new Minneapolis Bank chief, Neel Kashkari, has chosen breaking up the big banks as … 
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Anat Admati’s Confusion

 

This post looks at Anat Admati’s chapter in Progress and Confusion, the 2016 volume that reports on the IMF’s most recent biannual conference on the state of macroeconomic policy in the aftermath of the Great Recession. Admati is the George … 
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