Misunderstood Efficiency-Wage Theory

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A costly misunderstanding. Efficiency wages, particularly the original morale-centric formulation that Solow and I pioneered, outlined how theorists could have gone about rationally disabling Keynes’s Second Classical Postulate (i.e., the equality between the market wage and the marginal disutility of … 
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Gary Becker, Nobel Laureate

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This post acknowledges another patron saint of the GEM Project. In 1992, Gary Becker of the University of Chicago was awarded the 1992 Nobel Prize “for having extended the domain of microeconomic analysis to a wide range of human behaviour … 
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Routinized Jobs

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Is anybody excited about a post entitled “Routinized Jobs”? But boring employment is a key part of modern macroeconomic landscapes that is almost uniquely modeled in the GEM Project. I just finished reading Seasonal Associate by Heike Geissler, an “autobiographical … 
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The Big Picture

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Macro theorists have understandably experimented with a variety of paradigms in the attempt to explain the periodic instability of modern highly-specialized economies. Contrasting two conflicting paradigms has been a recurrent theme of the GEM Project Blog. The first is mainstream … 
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Top Billing

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The GEM Project insists that the top priority in modern macroeconomic research is unchanged from the Early Keynesians. It continues to be figuring out how to microfound meaningful wage rigidity, which by definition rationally suppresses labor-price recontracting. MWR is a … 
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The One True Wage Rigidity Model

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As promised last week, this post looks at some of the insightful, little known evidence that supports my claim that the GEM Project’s explanation of wage determination is how labor is actually priced in ubiquitous information-challenged workplaces. The Project’s narrative … 
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Thinking about Efficiency

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The core concept in the GEM Project is economic efficiency. Throughout the history of the profession, economists have agreed on the centrality of efficiency. From the beginning: “Adam Smith’s main concern was how and why economies grew. His answer was … 
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Douglass North, Nobel Laureate

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Douglass North died three years ago, at the age of 95. He received the Nobel Prize in Economics in 1993 for his pioneering work in cliometrics and the application of rigorous neoclassical theory to the analysis of institutions. The GEM … 
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