Neil Irwin’s Shame, Part III



This post is the third installment bashing Neil Irwin’s hobby-horse that the economy is too complicated for human comprehension. He has been mounting his soapbox and arguing that economists are fooling themselves and trying to fool everybody else. In so … 
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Neil Irwin’s Know-Nothing Approach Part II

The thesis that runs through the GEM Project is that macroeconomics, consistent with the neoclassical tenets of optimization and equilibrium, can powerfully explain instability if rational price-mediated exchange is extended from the marketplace to information-challenged workplaces. In that context, Neil … 
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Is Stagflation Coming?

Is stagflation coming? No. (So much for on the one hand or the other.) The next macro crisis facing the country will be something else, as yet unknown. But we know today that the available evidence doesn’t come close to … 
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Two Models of Stagflation


Mainstream FGME Analysis

Eugene Farmer (2010b, p.60) usefully summarized the durable mainstream friction-augmented general-market-equilibrium (FGME) explanation of the stagnation decade: “During the 1970s, the U.S. economy experienced high inflation and high unemployment at the same time and the data did … 
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Stagflation Facts: A Primer

From the New York Times (October 13, 2021): “Wall Street is chattering about the chances of a return of an economic specter from the 1970s: the toxic mix of sluggish economic growth and high inflation that came to be known … 
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Two Big Lies

A Big Lie uses vigorous, confident repetition to promote a false argument. This post looks at two big lies, both originating with Robert Lucas, that damaged the development of stabilization-relevant macroeconomics:

“Keynesian economics is dead.”
“Involuntary unemployment is not a fact or … 
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Making Sense of the Neoclassical Synthesis


In his History of Macroeconomics (2016), Michel De Vroey identifies the Early Keynesians’ neoclassical synthesis (NS) as a critical marker in the development of modern macro theory. Its importance is particularly evident in the enduring debate over the proper relation … 
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Linking the Workplace and Marketplace Venues

In addition to the intermarket linkages retained from mainstream SVGE modeling, including relative prices and elasticities that allocate various demands and supplies, the workplace and marketplace venues are connected, largely via three mechanisms. First is the dominance of LEV labor … 
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