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:
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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I don’t know Betsy Stevenson, beyond the fact that her relatively young career has been impressive. She served as chief economist of Barack Obama’s Department of Labor, from which she was promoted to a member of the White House’s Council …
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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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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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It will comfort practitioners that, unlike market-centric modeling, LEV workplace equilibrium does not simultaneously determine the rational wage and level of employment. The central innovation in large-firm management of labor input is the substitution of the workplace-exchange relation for market …
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This post and the two that follow elaborate on last week’s essay. They provide a more rigorous summary of GEM modeling that is rooted in the extension of rational price-mediated exchange from the marketplace to workplaces restricted by asymmetric information …
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In one of the earliest contributions to what was later named efficiency-wage theory (EWT), a diagram was constructed in the attempt to capture practitioner descriptions of labor pricing in workplaces restricted by costly, asymmetric information. It portrayed the on-the-job behavior …
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As promised, this post illustrates the need to break away from friction-augmented general-market-equilibrium modeling, making room for policy-relevant macroeconomics. It reprints a Blog essay (October 28, 2016) that unsparingly reveals the uselessness of mainstream New Keynesian explanation of the 2007-09 …
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The conclusion of last week’s post deserves emphasis: “It should be made clear that, unlike the New Keynesians, Lucas – ever the rigorous theorist – has never been embarrassed about his rejection of forced joblessness. He correctly argues that the …
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By neoclassical, I mean modeling rooted the tenets of optimization and general equilibrium. This and next week’s post look the last half century of the neoclassical study of business cycles, here measured by unemployment fluctuations. It will be short. The …
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