This paper reviews the evidence on the effects of recessions on potential output. In contrast to the assumption in mainstream macroeconomic models that economic fluctuations do not change potential output paths, the evidence is that they do in the case of recessions. A model is proposed to...

This paper argues that the natural rate of unemployment hypothesis, in which equilibrium unemployment is determined by “structural†variables alone, is wrong: it is both implausible and inconsistent with the evidence. Instead, equilibrium unemployment is haunted by...

Looks at the relevance to economic systems of force field equilibrium metaphors. Points out that the force field view of physical reality developed in nineteenth century physics does not necessarily involve homeostasis and reversible time paths. Illustrates the properties of force fields with...