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Microfoundations Reconsidered

The Relationship of Micro and Macroeconomics in Historical Perspective Edited by Pedro Garcia Duarte and Gilberto Tadeu Lima, Professors, Department of Economics, University of São Paulo, Brazil
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.
Extent: 256 pp
Hardback Price: $129.00 Web: $116.10
Publication Date: 2012
ISBN: 978 1 78100 409 8
Availability: In Stock
Paperback Price: $39.95 Web: $31.96
Publication Date: 2014
ISBN: 978 1 78195 330 3
Availability: In Stock
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  • Economics and Finance
  • History of Economic Thought
  • Radical and Feminist Economics
Most macroeconomists agree that we live in the age of microfoundations. The recent worldwide financial crisis may have emboldened critics of this microfoundational orthodoxy, but it remains the dominant view that macroeconomic models must go beyond supply and demand functions to the level of individual decision-making, taking into account the general dynamic environment where agents live. Microfoundations Reconsidered seeks to reassess how the relationship of micro and macroeconomics evolved over time.

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.

Microfoundations Reconsidered is a valuable addition to the macroeconomic research literature. It is ideally suited to students, scholars, researchers, and practitioners with an interest in macro and microeconomics and the history of economics.
‘. . . this book is very well done. The coverage is in-depth and serious, coming from several different angles methodologically and historically. All the essays are thoughtful and well informed, the net result, indeed, to make clear the foundations of the microfoundations-to-macro approach and its various forms and complications. Deeply informative and mot worthy of serious attention and consideration in this well-edited and -written book.'
– J. Barkley Rosser, Jr., Journal of the History of Economic Thought
Contributors: M. De Vroey, P. Garcia Duarte, D.W. Hands, K.D. Hoover, R. Leonard, G.T. Lima, P.E. Mirowski
Contents:

Foreword
John B. Davis

Introduction: Privileging Micro Over Macro? A History of Conflicting Positions
Pedro Garcia Duarte and Gilberto Tadeu Lima

1. Microfoundational Programs
Kevin D. Hoover

2. From Foundational Critique to Fictitious Players: The Curious Odyssey of Oskar Morgenstern
Robert Leonard

3. The Rise and Fall of Walrasian Microeconomics: The Keynesian Effect
D. Wade Hands

4. The Cowles Commission as an Anti-Keynesian Stronghold 1943–54
Philip E. Mirowski

5. Microfoundations: A Decisive Dividing Line between Keynesian and New Classical Macroeconomics?
Michel De Vroey

6. Not Going Away? Microfoundations in the Making of a New Consensus in Macroeconomics
Pedro Garcia Duarte

Index