What Stabilized the Economy in 2009

 

Last week took a critical look at Andrew Ross Sorkin’s underdeveloped take on the macrodynamics of the Great Recession. What follows, originally published on April 8, 2016, looks at what actually worked in containing the 2008-09 extreme instability. Hint: It … 
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Elaborating on Rationality

Three Influences

There are three primary sources of inspiration for GEM Project. First, and foremost, is the extraordinary body of work by the first-generation Internal-Labor-Market (ILM) theorists, notably including Clark Kerr, John Dunlop, Richard Lester, Lloyd Reynolds, Frederick Harbison, Charles Myers, … 
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Quite A Man

Robert Lucas led the macro academy’s rejection of both the keystone status of meaningful wage rigidity  and the consequent centrality of nominal demand in stabilization analysis. His influence has been enduring despite a remarkable fact. Lucas’s seminal contribution, i.e., the … 
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Evidence Interpretation Gone Bad

I was culling my library last week and ran across Peter Chinloy’s Labor Productivity (1981). I remembered that the book, nearly four decades ago, clearly illustrated the difference between insightful and misleading interpretation of evidence. Its lesson is even more … 
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What Bothers Jordi Galí

When will New Keynesian theorists accept that the intuitive generalization of rational price-mediated exchange from the marketplace to workplaces restricted by asymmetric employee-employer information solves their thorniest problems? The best NK theorists are not innocent of the fundamental EK failure. … 
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Another Post on Involuntary Job Loss

The GEM Blog has largely devoted July to demonstrating the criticality of meaningful wage rigidity (MWR) in any serious effort to making sense out of the plentiful evidence on involuntary job loss (IJL). The critical facts are three-fold: IJL significance … 
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