It's not like you are ever going to be able to "prove" these things to everybody's full satisfaction anyway. This is not rocket science. It's harder.

The question is, are the conclusions plausible, and can we make reasonably rational policy recommendations from them? I think so.

In fact, the policy recommendations he comes to -- basically coordinated expansionary fiscal, monetary, and incomes policy -- do not seem all that far off from what the Alternative Economic Policy for Europe people are arguing for.

Blanchard would add some job-friendly institutional reforms of employment regulations, unemployment insurance, and so forth.

It seems like these could be the seeds of a traditional European business-labor-government grand bargain that mobilizes the whole society to combat unemployment.

Business would get some regulatory relief and wage restraint; workers would get guarantees from the government to create more jobs with macroeconomic policy and public sector employment, and active labor market policy to ease insecurity caused by the deregulation.

All negotiated among the social partners rather than imposed from the top, of course.