The irresistible charm of the micro-foundations dogma or the overwhelming force of the discipline's hard core?
The appeal of the â€˜Micro-foundationsâ€™ project, which requires that all macroeconomic propositions are reduced to or derived from microeconomic ones, is strongly supported by the considerable force of what Lakatos calls the discipline's â€˜hard coreâ€™. This is particularly so if this project is broadly interpreted as a way of giving precedence to microeconomics in unifying economic theory. Given the micro-theoretical nature of the â€˜hard coreâ€™, questioning the Micro-foundations project is tantamount to confronting the â€˜hard core.â€™ The paper questions the two most fundamental tenets of the â€˜hard coreâ€™: maximization of utility and maximization of profit. It concludes that privileging micro over macro theory does not ensure sound foundations of the economics discipline and the Micro-foundations project makes little sense. Consequently, the search for consistency between microeconomics and macroeconomics should best be pursued in terms of a â€˜bridgeâ€™ rather than a â€˜foundationsâ€™ metaphor.
Volume (Year): 11 (2014)
Issue (Month): 1 (April)
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