We must not forget that, in the Great Recession, prominent central bankers rejected modern macro theory as useless. That was, of course, when useful theory was most needed. Stabilization authorities complained that consensus modeling failed to provide practical guidelines for …
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Misinterpreting the Monthly Employment Report
The Bureau of Labor Statistics released its monthly Employment Situation report this morning. The report is a recurring opportunity for the press to misinterpret what is going on in the U.S. economy. From the on-line edition of The Wall Street …
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Welcome Back Ben, Tim, and Hank
The reemergence of Ben Bernanke, Timothy Geithner, and Henry Paulson (BGP) on the policymaking scene stimulated this post. Their book, Firefighting: The Financial Crisis and Its Lessons (2019), was preceded by a succinct New York Times op. ed., “What We Need …
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John Bates Clark, Distinguished Economist
John Bates Clark (1847-1938) was the most distinguished American economist of his time. To me, he is especially interesting for two reasons. First, his career focused on the same important, difficult issue that a century later has motivated the GEM …
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The GEM Project’s Take on Brexit
Good economic theories help us understand big events as they are happening. What we most want is guidance on how they are likely to play out over time, both the short- and long-run. Good models are especially valuable in circumstances …
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A Third AJE:M Article
Still pursuing my apparent obsession with the most recent issue of the American Economic Journal: Microeconomics, this post looks at a third article, “Behavioral Economics and the Atheoretical Style”. Perhaps surprisingly, I very much liked Ran Spiegler’s piece. It is …
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The Greatest Economy?
In a recent tweetstorm, Donald Trump returned to his favorite boast: “Today I have, as President, perhaps the greatest economy in history…and to the Mainstream Media, it means NOTHING. But it will!” This post demonstrates his explanation-point promise is best …
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Fooling The New York Times
Two weeks ago, the Editorial Board of the New York Times joined Donald Trump in criticizing the Federal Reserve for not reducing interest rates. Both contend that lower rates are needed to promote economic growth. The interest rate they are …
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Another AJE:M Article
Last week’s post illustrates why the mainstream New Keynesian journal, American Economic Journal: Macroeconomics, has since its debut in 2009 failed to explain the most important instability evidence. The core problem is that AEJ:M editors assign top priority to defending …
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New Keynesian Wage Rigidity
The most recent American Journal of Economics: Macroeconomics arrived in my in-box last week. My interest was piqued by an article on wage rigidity, “Fixed-Wage Contracts and Monetary Non-Neutrality”, by Maria Björklund, Mikael Carlsson and Oskar Nordström Skans (hereafter BCS). …
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