Abstract
Malcolm Sawyer continues in this chapter with considering the relationships between microeconomics, mesoeconomics and macroeconomics. Macroeconomic analysis has often been accused of lacking ‘microeconomic foundations’. However, macroeconomic analysis always had microeconomic underpinnings though not ones based on lifetime utility maximisation. The use of the term ‘microeconomic foundations’ suggests causation runs from the micro level to the macro where causation runs in both directions and involves the meso level. The notion that macroeconomic analysis can be based on the ‘representative agent rational expectations’ approach is strongly critiqued. The nature of macroeconomic relationships is discussed and the general proposition set out to suggest that macroeconomic conditions cannot be readily derived from microeconomic considerations. Economic analysis is only interesting when conducted above the individual level involving interactions between individuals and the resolution of their actions and decisions with consideration of whose decisions are decisive. Some of the problems surrounding the use of macro relationships which mimic micro relationships are set out.
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Sawyer, M. (2018). Microeconomics, Mesoeconomics and Macroeconomics. In: Arestis, P. (eds) Alternative Approaches in Macroeconomics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-69676-8_5
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DOI: https://doi.org/10.1007/978-3-319-69676-8_5
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