IDEAS home Printed from
   My bibliography  Save this article

Whither the Microeconomic Foundations of Macroeconomic Theory ?


  • Wim Meeusen


The debate on the future of macroeconomic theory is in full swing. Uneasiness about mainstream macroeconomics, and more in particular the ubiquitous DSGE line of research, could already be heard in some circles well before the Credit Crunch and the ensuing economic crisis. This paper argues that the present-day strand of micro-foundations of macroeconomics are the main source of failure of the latter. In section 1 we trace back the history of the call for micro-foundations. Section 2 examines these micro-foundations in more detail. Section 3 deals with the economic crisis and the crisis in (macro)economic theory. In section 4 we try to identify possible alternative approaches and paradigms. We conclude in section 5.

Suggested Citation

  • Wim Meeusen, 2011. "Whither the Microeconomic Foundations of Macroeconomic Theory ?," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, vol. 54(1), pages 51-80.
  • Handle: RePEc:bxr:bxrceb:2013/93449

    Download full text from publisher

    File URL:
    File Function: ARTICLE MEEUSEN
    Download Restriction: no

    References listed on IDEAS

    1. Eichengreen, Barry & Arteta, Carlos, 2000. "Banking Crises in Emerging Markets: Presumptions and Evidence," Center for International and Development Economics Research, Working Paper Series qt3pk9t1h2, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
    2. Paul Louis Ceriel Hilbers & Alfredo Mario Leone & Mahinder Singh Gill & Owen Evens, 2000. "Macroprudential Indicators of Financial System Soundness," IMF Occasional Papers 192, International Monetary Fund.
    3. International Monetary Fund, 1998. "Leading Indicators of Banking Crises; Was Asia Different?," IMF Working Papers 98/91, International Monetary Fund.
    4. Honohan, Patrick & Klingebiel, Daniela, 2000. "Controlling the fiscal costs of banking crises," Policy Research Working Paper Series 2441, The World Bank.
    5. Asli Demirgüç-Kunt & Enrica Detragiache, 1998. "The Determinants of Banking Crises in Developing and Developed Countries," IMF Staff Papers, Palgrave Macmillan, vol. 45(1), pages 81-109, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Senbeta, Sisay, 2011. "How applicable are the new keynesian DSGE models to a typical low-income economy?," MPRA Paper 30931, University Library of Munich, Germany.

    More about this item


    Micro-foundations; DSGE models; Economic-financial crisis;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bxr:bxrceb:2013/93449. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.