Routledge Handbook of Macroeconomic Methodology

12 Microeconomic foundations of macroeconomics

Nuno Ornelas Martins

DOI: 10.4324/9781315745992-15

Introduction

Much contemporary debate on macroeconomics has been centred on its microeconomic foundations, that is, with finding ways of making macroeconomic theory consistent with the explanation of human agents provided by microeconomic theory (more specifically neoclassical microeconomic economic theory). This debate presupposes that macroeconomic theory, as developed by John Maynard Keynes (1936, CW VII), does not possess adequate microeconomic foundations. What is rarely noticed in these debates is that Keynes’s own perspective also presupposed microfoundations, grounded on Keynes’s own understanding of rationality and expectations. The ...