Microfoundations — the art of assuming away problems rather than solving them

Created
Fri, 03/01/2025 - 07:21
Updated
Fri, 03/01/2025 - 07:21
Simon Wren-Lewis is one of many mainstream economists who staunchly defend the idea that having microfoundations for macroeconomics moves macroeconomics forward. A couple of years ago he wrote this: I think the two most important microfoundation led innovations in macro have been intertemporal consumption and rational expectations …  [T]he adoption of rational expectations was not […]

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