Financial stability requires macroeconomic foundations of macroeconomics

Sergio Rossi ()
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Sergio Rossi: University of Fribourg

The Journal of Philosophical Economics, 2010, vol. 3, issue 2, 58-73

Abstract: Financial stability features prominently among the goals of several post­crisis macroeconomic policies around the world. Being a systemic characteristic, financial stability requires a systemic analysis, which only macroeconomics can offer logically. Yet, the current way of doing macroeconomics is not up to the task, as it is grounded on so­called microfoundations. Considering macroeconomics as the science of aggregating data obtained at microeconomic level can lead indeed to conclusions that are either misleading or wrong. This paper points out that the true foundations of macroeconomics are macroeconomic, and that understanding the working of monetary economies of production and exchange requires a conceptual rather than a mathematical treatment of economic issues at a systemic level.

Keywords: financial crises; macroeconomics; monetary theory of production (search for similar items in EconPapers)
JEL-codes: E50 G01 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:bus:jphile:v:3:y:2010:i:2:p:58-73

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