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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Favorite Resurrection: Barro and Grossman
Last week’s post called attention to a few of the multiple abandoned-model resurrections enabled by the GEM Project’s microfounding of MWR. My favorite is the recue from oblivion of the fixed-wage general-equilibrium (FWGE) model class that burst on to the …
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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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Stagflation and the Fed’s Inflation Objective
The decade-long stagflation crisis that began in the early 1970s was a very difficult time. Its economic loss was, in the 20th century, second only to the 1930s Great Depression. Stagflation refers to high product-price inflation occurring simultaneously with high …
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