Implicit Microfoundations for Macroeconomics

Arbeitspapier

A large market economy has a huge number of degrees of freedom with weak microlevel coordination. The 'implicit microfoundations' approach assumes this property of micro-level interactions more strongly conditions macro-level outcomes compared to the precise details of individual choice behavior; that is, the 'particle' nature of individuals dominates their 'mechanical' nature. So rather than taking an 'explicit microfoundations' approach, in which individuals are represented as 'white-box' sources of fully-specified optimizing behavior (rational agents), we instead represent individuals as 'black box' sources of unpredictable noise subject to objective constraints (zero-intelligence agents). To illustrate the potential of the approach we examine a parsimonious, agent-based macroeconomic model with implicit microfoundations. It generates many of the reported empirical distributions of capitalist economies, including the distribution of income, firm sizes, firm growth, GDP and recessions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Economics Discussion Papers ; No. 2008-41

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Marxian; Sraffian; Kaleckian ; Capitalist Systems: Political Economy ; General Equilibrium and Disequilibrium: General ; Computational Techniques; Simulation Modeling ; Economic Methodology ; Relation of Economics to Other Disciplines
• Subject: Micro foundations ; macroeconomics ; aggregation ; power laws ; Mikroökonomische Fundierung ; Agent-based Model ; Aggregation ; Makroökonomik ; Marktwirtschaft ; Wahrscheinlichkeitsrechnung ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Wright, Ian
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/27477
• Last update: 10.03.2025, 11:41 AM CET