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Andrei SANDU

Durham University

This essay will first outline the case for microfoundations, before presenting the limitations which undermine both the representative-agent model as a means of reduction and the individualist claim that microfoundations are necessary for explanation of economic aggregates. I conclude that the desire for microfoundations is justifiable in certain contexts, but that demanding them as a validator of macroeconomics demonstrates too narrow a conception of the purposes of social science. Though a sound understanding of microeconomics is necessary for a sound understanding of the economy, macroeconomics deserves a greater degree of ontological independence than it is granted by individualists.

ŒCONOMICA no. 3-4/2016

Keywords: microfoundations, macroeconomics, representative-agent model, individualism

JEL: B41, D00, E00

Microeconomic Foundations for Macroeconomic Phenomena. A Problem of Ontological (In)Dependence [Fundaţii microeconomice ale fenomenelor macroeconomice. O problemă de (in)dependenţă ontologică]

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