Woodford’s Really Bad Advice

This post looks at some monetary-policy advice from Michael Woodford, an acknowledged leader of mainstream New Keynesian macroeconomics. His leadership role demands attention. The advice is featured in the first chapter of Woodford’s 2003 New Keynesian bible (Interest and Prices); … 
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Edmund Phelps

Following last week’s post on Don Patinkin, the GEM Blog next acknowledges the Project’s debt to Edmund Phelps and his extraordinary body of work. He was fearless in his determination to introduce into macroeconomics labor pricing that is both micro-coherent … 
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Don Patinkin

In graduate school, I became interested in stabilization theory and the relation of Keynesian macroeconomics to beautiful marginalist general-market-equilibrium microeconomics. Amelioration of the human cost of periodic episodes of more or less severe involuntary loss of jobs and income seemed … 
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What’s Essential in Macro Theory

I admire Jean-Pascal Bénassy’s text Macroeconomic Theory (2011). But its New Keynesian roots cause him to get some significant things wrong. A troubling example is his identification of a “particularly important issue, that of government policy effectiveness. It is shown … 
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Famous Recanting of Barro and Grossman

 

Last week’s post praised the 1970s fixed-wage general-equilibrium (FWGE) model of Keynesian consumption constructed by Robert Barro and Hershel Grossman. That model class, however, assumed wage rigidity and was eventually, and fiercely, recanted by both authors, capturing the uncompromising mood … 
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Resurrections and a Wrecking Ball

The GEM Project is about resurrections, reviving particular schools of thought long left for dead. Most central is the large-workplace modeling conducted by a loose collection of 20th century labor economists. Clark Kerr, John Dunlop, Frederick Harbison, Charles Myers, Richard … 
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A Poem

As demonstrated by the GEM Blog, today’s macro academy defends its market-centric general-equilibrium model class even at the cost of stabilization-policy irrelevance. Such Ptolemaic rules of engagement can perhaps be understood as mainstream theorists’ attempt to define a comforting space … 
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MWR Research Has Disappeared

It is testimony to the determined Ptolemaic defense of mainstream market-centric, general-equilibrium macro theory that publication of research on the existence and nature of meaningful wage rigidity (MWR), defined by its capacity to rationally suppress wage recontracting, has disappeared. The … 
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The Blame Game

Washington, Wall Street, and – most importantly – Hollywood agree that the 2007-09 Great Recession was caused by excessive lending to unreliable low-income home buyers. It was an open secret that subprime applications frequently inflated borrower incomes, causing financial seers … 
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