Heterodox microeconomics and the foundation of heterodox macroeconomics

Lee, Frederic (2011): Heterodox microeconomics and the foundation of heterodox macroeconomics.

Abstract

The resolution of the controversy over the microfoundations of macroeconomics is important to heterodox economics. In this essay, I argue that the controversy is due to misspecification. That is, the conventional understanding of the controversy is that it is a reductionist exercise of macroeconomics to mainstream microeconomics. However, mainstream microeconomics is theoretically incoherent and hence cannot provide the microfoundations for any macroeconomics, mainstream or heterodox. In addition, a common position in heterodox economics is that heterodox macroeconomics generates a mainstream microeconomics sub-structure. But it is argued that this is not the case; rather it generates a heterodox microeconomics substructure. The essay concludes with the argument that in heterodox economics the micro-macro dichotomy does not exist and hence the controversy should be dismissed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Heterodox; Microeconomics; Macroeconomics
• Subjects: E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches

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