Sticky wages yes, but how? Sticky wages in most contemporary models assume that all workers belong to a union that has a labor monopoly and charges above market clearing wage. Reality, not many unions, and more worry about employer market power. Unreality of NK model assumptions at some point sticks in throat. So WHICH sticky wage model would you like us to use?

More Kydland-Prescott appreciation, this time of their 1991 SJE paper on the development of >econometrics<. Fascinating account of the relation between facts, statistical technique and economic theory, from the early critique by the "German historical school" to RBC-style macro. jstor.org/stable/3440324?seq… Especially interesting how the meaning of the term >econometrics< has changed over time. Now, I think many associate the word with the statistical machinery associated with estimating reduced-form models and causal effects. When Frisch introduced the term, it meant something closer to what we now call quantitative economic theory. My own reflection: it seems to me like we have recently taken a step further in realizing Frisch’s vision of economics as a quantitative science, where statistical facts are interpreted through explicit quantitative models. Macro-model-style research have become more quantitatively credible through being increasingly disciplined by micro facts. Applied-micro-style research has become more relevant through increased recognition that we need to feed the reduced-form estimates through an explicit model for many interpretations and counterfactuals. To facilitate further convergence, also check out the great blog post by Oliver Hanney and Ben Moll on the missing intercept problem that arises when scaling micro estimates without using an explicit model. voxdev.org/topic/methods-mea…