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Abstract

This 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.

Publication Type:	Article
Additional Information:	This is an Accepted Manuscript of an article published by Taylor & Francis in Review of Political Economy, available online at http://dx.doi.org/10.1080/09538259.2016.1108132
Publisher Keywords:	dynamic stochastic general equilibrium, hypostatisation, intentional stance, macroeconomics, methodological individualism, microfoundations, reduction, substrate neutrality
Subjects:	H Social Sciences > HB Economic Theory
Departments:	School of Policy & Global Affairs > Economics
SWORD Depositor:	Symplectic Administrator

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