Financial stability requires macroeconomic foundations of macroeconomics
Financial stability requires macroeconomic foundations of macroeconomics
Author(s): Sergio RossiSubject(s): Philosophy, Social Sciences, Economy, Special Branches of Philosophy, Sociology, Philosophy of Science, Social Theory, Socio-Economic Research
Published by: Editura Rosetti International
Keywords: financial crises; macroeconomics; monetary theory of production;
Summary/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.
Journal: Journal of Philosophical Economics
- Issue Year: III/2010
- Issue No: 2
- Page Range: 58-73
- Page Count: 16
- Language: English