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Microfoundations: A Decisive Dividing Line between Keynesian and New Classical Macroeconomics?

In: Microfoundations Reconsidered

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  • Michel De Vroey

Abstract

The highly regarded contributors to the book argue that the standard narrative of microfoundations is likely to be unreliable. They therefore re-examine the history of the relationship of microeconomics and macroeconomics, starting from their emergence as self-consciously distinct fields within economics in the early 1930s. They seek to go beyond the conventional history that is often told and written by practicing economists. From different perspectives they challenge the association of microfoundations with Robert Lucas and rational expectations and offer both a more complete and a deeper reading of the relationship between micro and macroeconomics.

Suggested Citation

  • Michel De Vroey, 2012. "Microfoundations: A Decisive Dividing Line between Keynesian and New Classical Macroeconomics?," Chapters, in: Microfoundations Reconsidered, chapter 5, Edward Elgar Publishing.
    • Handle: RePEc:elg:eechap:14869_5
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    References listed on IDEAS

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    1. Kydland, Finn E & Prescott, Edward C, 1991. " The Econometrics of the General Equilibrium Approach to Business Cycles," Scandinavian Journal of Economics, Wiley Blackwell, vol. 93(2), pages 161-178.
    2. Michel, DE VROEY, 2005. "Involuntary Unemployment : the Elusive Quest for a Theory," Discussion Papers (ECON - Département des Sciences Economiques) 2005004, Université catholique de Louvain, Département des Sciences Economiques.
    3. Michel De Vroey & Pierre Malgrange, 2012. "From The Keynesian Revolution to the Klein-Goldberger model: Klein and the dynamization of Keynesian theory," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 20(2), pages 113-136.
    4. Jean-Pascal Benassy, 1975. "Neo-Keynesian Disequilibrium Theory in a Monetary Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(4), pages 503-523.
    5. Lucas, Robert E, Jr, 1980. "Methods and Problems in Business Cycle Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(4), pages 696-715, November.
    6. Backhouse,Roger E. & Bateman,Bradley W. (ed.), 2006. "The Cambridge Companion to Keynes," Cambridge Books, Cambridge University Press, number 9780521600606.
    7. Michel De Vroey, 2012. "Marshall and Walras: Incompatible bedfellows?," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 19(5), pages 765-783, October.
    8. Michel De Vroey, 1998. "Is the tatonnement hypothesis a good caricature of market forces?," Journal of Economic Methodology, Taylor & Francis Journals, vol. 5(2), pages 201-221.
    9. Michael De Vroey, 2000. "IS-LM à la Hicks versus IS-LM à la Modigliani," History of Political Economy, Duke University Press, vol. 32(2), pages 293-316, Summer.
    10. Jeremy Greenwood, 2005. "Modern Business Cycle Analysis," RCER Working Papers 520, University of Rochester - Center for Economic Research (RCER).
    11. Ronald G. Bodkin & Lawrence R. Klein & Kanta Marwah, 1991. "A History of Macroeconometric Model-Building," Books, Edward Elgar Publishing, number 51.
    12. Lucas, Robert E., 1977. "Understanding business cycles," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 5(1), pages 7-29, January.
    13. Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
    14. Barro, Robert J & Grossman, Herschel I, 1971. "A General Disequilibrium Model of Income and Employment," American Economic Review, American Economic Association, vol. 61(1), pages 82-93, March.
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    16. Michel De Vroey, 2004. "The History of Macroeconomics Viewed against the Background of the Marshall-Walras Divide," History of Political Economy, Duke University Press, vol. 36(5), pages 57-91, Supplemen.
    17. Axel Leijonhufvud, 1997. "Models and theories," Journal of Economic Methodology, Taylor & Francis Journals, vol. 4(2), pages 193-198.
    18. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    19. Michel De Vroey, 2007. "Did The Market‐Clearing Postulate Pre‐Exist New Classical Economics? The Case Of Marshallian Theory," Manchester School, University of Manchester, vol. 75(3), pages 328-348, June.
    20. Pedro Garcia Duarte & Gilberto Tadeu Lima, 2012. "Microfoundations Reconsidered," Books, Edward Elgar Publishing, number 14869.
    21. Lucas, Robert E, Jr & Rapping, Leonard A, 1969. "Real Wages, Employment, and Inflation," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 721-754, Sept./Oct.
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    More about this item

    Keywords

    Economics and Finance;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)

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