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On Microfoundations and Keynes’ Economics

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  • Victoria Chick

Abstract

Most mainstream economists regard the principles of ‘rational choice’ theory as the only foundation of economics and insist that macroeconomics be based on those principles. These include certainty or certainty-equivalence, which followers of Keynes reject. Macrofoundations of microeconomics are often proposed instead. We argue that the issue is more complex and explain why it is unlikely that a logically watertight fit between the two levels of analysis will ever be achieved. The complex interactions within and between the two levels suggest that it is unhelpful to assign foundational status to either level. We examine Keynes’ General Theory is examined as an example and compromises are found to fit the two together. It is argued that compromise is inevitable and that good theorising entails defending the compromises made.

Suggested Citation

  • Victoria Chick, 2016. "On Microfoundations and Keynes’ Economics," Review of Political Economy, Taylor & Francis Journals, vol. 28(1), pages 99-112, January.
    • Handle: RePEc:taf:revpoe:v:28:y:2016:i:1:p:99-112
    DOI: 10.1080/09538259.2016.1108130
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    References listed on IDEAS

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    1. M. G. Hayes, 2006. "The Economics of Keynes," Books, Edward Elgar Publishing, number 12601.
    2. Victoria Chick, 1983. "Macroeconomics after Keynes: A Reconsideration of the General Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262530457, April.
    3. Mark Hayes, 2006. "The Economics of Keynes: A New Guide to The General Theory," Books, Post Keynesian Economics Society (PKES), number nggt.
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    Cited by:

    1. Maria Cristina Marcuzzo, 2022. "Victoria Chick (1936-2023) (Victoria Chick (1936-2023))," Moneta e Credito, Economia civile, vol. 76(301), pages 101-106.

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