Daniel asks, Brad DeLong delivers, Krugman elaborates.
This is also a good post recently from Brad:
"From my perspective, the strange thing is that people kept trying to prove uniqueness and stability of general equilibrium. Simply look at:
and try to avoid the conclusion that to first order the U.S. economy can be in at least meta-stable equilibrium with an adult employment-to-population ratio of about 63% or with an adult employment-to-population ratio of 58.5%--and probably anywhere in between as well.
Proposing that economists pursue the research program of demonstrating that the economy has a unique stable equilibrium has thus always seemed to me to be like proposing that physicists pursue the research program of demonstrating the feathers fall unusually rapidly..."