A Landmark Achievement

In a recent review, Michael Woodford praised Stephen Marglin’s Raising Keynes: A Twenty-First Century General Theory (2021) as a “landmark achievement” in market-centric macroeconomics. Discounting some hyperbole, I concur. His contribution, i.e., the close analysis of the speed of wage … 
Read More | Comment

Rational Behavior Macroeconomics

A powerful feature of generalized-exchange labor pricing is its roots in rational behavior organized by general decision-rule equilibrium. In the 1990s New Neoclassical Synthesis (NNS), mainstream New Keynesians (NK) committed to that venerable standard. Indeed, if faced with a choice … 
Read More | Comment

Plague of Otiose Modeling

“Otiose” is a more polite synonym for “useless”. It came to mind during my recent rereading of “Labor Markets and Monetary Policy: A New Keynesian Model with Unemployment,” American Economic Journal: Macroeconomics (April 2010) by Olivier Blanchard and Jordi Galí. … 
Read More | Comment

Phillips Curve Part IV: GEM Version

Hybrid Phillips curve. Mainstream theorists of my generation have been long exhausted by their 30-year microfoundations war. Enervation likely shaped a prominent macro theorist’s determined disinterest in the foregoing analysis: “… the debate [expectations versus catch-up] has to move to … 
Read More | Comment

Phillips Curve Part III: Melding GEM Labor Pricing

The crucial contribution of generalized-exchange macroeconomics is its intuitive extension of rational price-mediated exchange from the marketplace to workplaces restricted by asymmetric employer-employee information. Early and New Keynesian theorists have never grasped that the primary missing element in their market-centric … 
Read More | Comment

Phillips Curve Part 1: Brief History

This post begins a four-part series that illustrates the power of generalizing rational exchange from the marketplace to information-challenged workplaces by working through its implications for the specification and use of the Phillips curve. The PC has long been macro … 
Read More | Comment

Lucas on Keynes Via De Vroey

I am on my annual get-away-from-Chicago-winter sojourn in San Miguel, Mexico. As suggested by the previous post, part of my poolside recreation has been rereading parts of Michel De Vroey’s A History of Macroeconomics from Keynes to Lucas and Beyond … 
Read More | Comment

Non-Walrasian Equilibrium Theory

Blog readers know that the earliest version of the GEM Project’s generalized-exchange modeling played a seminal, albeit underappreciated, role in the brief period of active research on Efficiency-Wage Theory (EWT). My 1981 article and 1984 book introduced that literature to … 
Read More | Comment