Individual Behaviors and Collective Welfare: Ramsey's " microfoundations " of " macro-equilibrium "

Marion Gaspard

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Abstract: More than the single determination of a mathematical optimal saving's rule, the issue at stake in Ramsey'1928 EJ paper was to understand the consequences of individual savings behaviors on collective welfare. The challenge was therefore, and more profoundly, to state a theoretical representation allowing connecting a micro- and a macro level. In contrast with some retrospective interpretations, Ramsey exactly avoided any representative agent logic, in the double sense we give today to this concept in macroeconomics: a way to pass over the individual idiosyncrasy in constructing a fictional economic agent whose choices represent those of an underlying decentralized economy or a way to use an agent that reflects the aggregation of individual behaviors. Ramsey's challenge was rather to state results concerning macroeconomic equilibrium by bypassing the partial equilibrium framework he inherited from Cambridge. The challenge leads him to scrutiny anf formalize different kinds of economic agents: nation, individual, family.

Keywords: Frank Ramsey; microfoundations; history of macroeconomics (search for similar items in EconPapers)
Date: 2005-01-20
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01162036
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Published in Conference on the History of Macroeconomics, R. Backhouse, P. Bridel, M. De Vroey, Jan 2005, Louvain la Neuve, Belgium

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