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Reductionism in Economics: Intentionality and Eschatological Justification in the Microfoundations of Macroeconomics

Published online by Cambridge University Press:  01 January 2022

Kevin D. Hoover
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Abstract

Macroeconomists overwhelmingly believe that macroeconomics requires microfoundations, typically understood as a strong eliminativist reductionism. Microfoundations aims to recover intentionality. In the face of technical and data constraints macroeconomists typically employ a representative-agent model, in which a single agent solves the microeconomic optimization problem for the whole economy, and take it to be microfoundationally adequate. The characteristic argument for the representative-agent model holds that the possibility of the sequential elaboration of the model to cover any number of individual agents justifies treating the policy conclusions of the single-agent model as practically relevant. This eschatological justification is examined and rejected.

Type
Research Article
Information
Philosophy of Science , Volume 82 , Issue 4 , October 2015 , pp. 689 - 711
Copyright
Copyright © The Philosophy of Science Association

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Footnotes

†

Presented at the conference on Reduction and Emergence in the Sciences at the Center for Advanced Studies at LMU (CASLMU), Ludwigs-Maximilliana Universität, Munich, November 14–16, 2013. I thank Alex Rosenberg and three anonymous referees for comments on an earlier draft.

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