a home
for economists
who believe
macroeconomics
can be both coherent and stabilization policy-relevant
The GEM Project blog appears weekly (Fridays). Interested economists are invited to participate by submitting comments or writing blog entries.
There are a few rules. The subject matter must be related to macroeconomics and macroeconomists, especially in their grand struggle to construct models that are stabilization relevant and internally coherent. Blog entries should be 1,000 words or fewer, and author name and association are required.
These six blogs are the cliff-notes version of the GEM eBook. In bite-sized portions, they capture the essentials of Generalized Exchange Macroeconomics:
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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Greg Mankiw has always been a smart guy. As a young man, he took a gap year between his undergraduate and graduate education to be a research assistant at the Congressional Budget Office. He wisely chose the macro unit I …
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Last week’s post outlined the GEM Project’s theory of nonstationary demand disturbances (NDD). It explains the sort of extreme instability that characterized the 2008-09 Great Recession (as well as the 1930s Great Depression). NDD macrodynamics is not understood in the …
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Last week’s post outlined the GEM Project’s theory of nonstationary demand disturbances (NDD). It explains the sort of extreme instability that characterized the 2008-09 Great Recession (as well as the 1930s Great Depression). NDD macrodynamics in highly specialized market economies …
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Heterogeneous Demand Disturbances
In generalized-exchange macroeconomics, featuring microfounded meaningful wage rigidity and the rational suppression of labor-price recontracting, a broad variety of adverse shocks are centrally promulgated by nominal demand disturbances (DD). Stationary demand disturbances are the most common DD class. …
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As described last week, the stagflation decade was a macroeconomic version of a perfect storm, generating a prolonged period of stubbornly elevated wage/price inflation and unemployment. The global disruption, of course, greatly interested economists. Their contemporaneous work produced a three-part …
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As promised last week, this post digs deeper into stagflation decade. The episode of simultaneously high unemployment and inflation that began in the early 1970s was the 20th century’s second most damaging macro crisis, ranking below only the 1930s Great …
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In the 1970s, Robert Lucas famously argued that adaptive expectations left information on the table and, as a result, could not be consistent with optimizing behavior. Lucas’ target was then-mainstream Early Keynesians who used adaptive expectations to motivate catch-up adjustments …
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This post continues last week’s admiration of Michel De Vroey. He understands, and confidently champions, the EK emphasis on involuntary unemployment and, consequently, the analytic centrality assigned in stabilization-relevant macro theory to meaningful wage rigidity (MWR) and the discretionary management …
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I greatly admire Michel De Vroey. The Italian economist has done more than anyone else in the world to keep Early Keynesianism and its keystone meaningful wage rigidity alive in the age of market-centric neoclassical macroeconomics. His essential book, A …
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