Generalized Exchange Macroeconomics
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A forum for economists who believe that macroeconomics can be both internally coherent and stabilization-policy relevant. Our mission is to educate youth and young adults about issues that affect them and their communities, through our use of innovative programs and enriching activities.
Generalized Exchange Macroeconomics
1y ago
In his masterwork, Adam Smith (1776) provides two particularly deep insights about economic activity: the spontaneous organization of self-interested market exchange (the “invisible hand”) and the nature and implications of production specialization (the “pin factory”). Smith sought to explain decentralized ...
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Generalized Exchange Macroeconomics
1y ago
Perusing what macro theorists publish and teach reveals shockingly large gaps in what they appear to know about how modern, highly specialized economies actually work. Given that macroeconomists are generally satisfied with the state of their art, something pretty interesting ...
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Generalized Exchange Macroeconomics
1y ago
This post places the research of Arthur Okun, the subject of last week’s essay, in the larger context of what came to be known as efficiency-wage (EW) theory. The workplace venue of price-mediated exchange was introduced into macroeconomics by original ...
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Generalized Exchange Macroeconomics
1y ago
Arthur Okun’s name came up. It happened in a conversation with a friend from the high-wire policymaking days at the Fed when stagflation – simultaneously high unemployment and high inflation – was generating an instability crisis second only to the ...
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Generalized Exchange Macroeconomics
1y ago
This post continues my brief summary of why generalized-exchange theory should replace general-market equilibrium as the profession’s dominate macro model. This concluding instalment focuses on when and how market-centric macroeconomics became inadequate to explain mass market instability. The crucial event ...
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Generalized Exchange Macroeconomics
1y ago
General market equilibrium (GME), pioneered by Walras and infused with the genius of Arrow and Debreu, is a towering scholarly achievement that has long provided a valuable model of rational price-mediated exchange. Like the succession of beautiful theories in physics, ...
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Generalized Exchange Macroeconomics
2y ago
Involuntary job loss is at the heart of the mainstream stabilization-theory muddle. For policymakers, the socioeconomic problems of employment and income loss are central to business-cycle pathology. Many critics of modern macro modeling argue the failure of New Keynesians (NK) ...
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Generalized Exchange Macroeconomics
2y ago
Macroeconomic stability is a cornerstone of the modern social compact. Our capacity to under-stand, and design policies to beneficially influence, the cyclical behavior of employment, output, income, and inflation is entrusted to macroeconomists. It is a responsibility for which mainstream ...
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Generalized Exchange Macroeconomics
2y ago
“[T]he characteristics of great theoretical achievements are clear foundations, consistency with many observed facts, unification of theories which previously appeared as fundamentally distinct.” That high bar was set Edmond Malinvaud (1977), the late, greatly admired French macro theorist. Mainstream New ...
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Generalized Exchange Macroeconomics
2y ago
The term I came up with is “conundrum macroeconomics”. The heretofore nameless phenomenon refers to analysis with models that lack the capacity to accommodate, at least coherently, the existence of the activity being studied. The urge to name that curious ...
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