The irresistible charm of the micro-foundations dogma or the overwhelming force of the discipline's hard core?

Athanasios Thanos Skouras and Yiannis Kitromilides
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Yiannis Kitromilides: University of Cambridge, UK

European Journal of Economics and Economic Policies: Intervention, 2014, vol. 11, issue 1, 67-79

Abstract: The appeal of the ‘Micro-foundations’ project, which requires that all macroeconomic propositions are reduced to or derived from microeconomic ones, is strongly supported by the considerable force of what Lakatos calls the discipline's ‘hard core’. This is particularly so if this project is broadly interpreted as a way of giving precedence to microeconomics in unifying economic theory. Given the micro-theoretical nature of the ‘hard core’, questioning the Micro-foundations project is tantamount to confronting the ‘hard core.’ The paper questions the two most fundamental tenets of the ‘hard core’: maximization of utility and maximization of profit. It concludes that privileging micro over macro theory does not ensure sound foundations of the economics discipline and the Micro-foundations project makes little sense. Consequently, the search for consistency between microeconomics and macroeconomics should best be pursued in terms of a ‘bridge’ rather than a ‘foundations’ metaphor.

Keywords: micro-foundations; ‘hard core’; utility maximization; profit maximization; methodological individualism; fallacy of composition; ‘unity of science’; professionalization of economics (search for similar items in EconPapers)
JEL-codes: A A1 A14 B B4 B41 D D01 (search for similar items in EconPapers)
Date: 2014
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