Review of Political Economy 28(1):134-152, 2016
21 Pages Posted: 3 Jun 2015 Last revised: 22 Oct 2017
Date Written: January 2, 2016
The paper argues that the microfoundations programme can be understood as an implementation of an underlying methodological principle, methodological individualism, and that it therefore shares a fundamental ambiguity with that principle, viz, whether the macro must be derived from and therefore reducible to, or rather consistent with micro-level behaviours. The pluralist conclusion of the paper is not that research guided by the principle of microfoundations is necessarily wrong, but that the exclusion of approaches not guided by that principle is indeed necessarily wrong. The argument is made via an examination of the advantages claimed for dynamic stochastic general equilibrium models, the relationship between parts and wholes in social science, and the concepts of reduction, substrate neutrality, the intentional stance, and hypostatisation.
Keywords: microfoundations, methodological individualism, DSGE, substrate neutrality, intentional stance
JEL Classification: B41, B22
Suggested Citation: Suggested Citation