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The Representative Agent in Macroeconomics : Routledge Frontiers of Political Economy - James E. Hartley

The Representative Agent in Macroeconomics

Routledge Frontiers of Political Economy

Hardcover Published: 3rd July 1997
ISBN: 9780415146692
Number Of Pages: 240

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Representative agent models have become a predominant means of studying the macroeconomy in modern economics without there being much discussion in the literature about their propriety or usefulness. This volume evaluates the use of these models in macroeconomics, examining the justifications for their use and concluding that representative agent models are neither a proper nor a particularly useful means of studying aggregate behaviour.

Acknowledgmentsp. x
Why representative agents?
Introductionp. 3
Macroeconomicsp. 3
What is a representative agent model?p. 4
Plan of the bookp. 6
The Origins of the Representative Agentp. 9
The birth of the representative agentp. 9
The critique and abandonment of the representative firmp. 12
Modern lessonsp. 16
Argument for the New Classical Use of Representative Agent Modelsp. 19
The return of the representative agent modelp. 19
The first new classical representative agent modelp. 20
The Lucas critiquep. 23
The Walrasian traditionp. 26
Microfoundationsp. 29
Discussionp. 30
The Lucas critique
Beyond Taste and Technology Parameters in Macroeconomicsp. 33
The Lucas critiquep. 33
Theoretical considerationsp. 34
An examination of Lucas (1976)p. 37
An examplep. 40
Additional notesp. 47
Representative agents and the Lucas critiquep. 52
Is it time to dispense with the Lucas critique?p. 53
The Walrasian tradition
Walrasian Methodologyp. 59
Walrasian and Marshallian traditionsp. 59
Walrasian methodologyp. 59
The role of mathematicsp. 62
Assumptions in Walrasian methodologyp. 64
The representative agent assumptionp. 66
The fundamental theorems?p. 68
Marshallian Methodologyp. 73
Introductionp. 73
Mathematics in Marshallian methodologyp. 75
The role of assumptionsp. 77
Partial equilibriump. 78
Milton Friedmanp. 80
The representative agentp. 82
The New Classicals as Walrasian Economistsp. 84
The methodology of new classical economicsp. 84
New classical methodological statementsp. 84
Friedman's comments on Langep. 91
The new classical representative agent in a Walrasian modelp. 101
Microfoundations
Microfoundations: Austrian Stylep. 105
Introductionp. 105
Austrian methodologyp. 106
The Austrian rejection of macroeconomicsp. 107
The representative agentp. 113
Ideal types and representative agentsp. 115
Addendump. 117
The Traditional Case for Microfoundationsp. 120
Introductionp. 120
The new classicalsp. 120
The microfoundations traditionp. 123
What are microfoundations anyway?p. 127
Where does the representative agent fit in?p. 130
The Aggregation Problemp. 132
The general problemp. 132
The basic theoretical resultsp. 133
Extensionsp. 135
Responsesp. 142
Individual and Market Experimentsp. 147
Endogenous versus exogenous variablesp. 147
An example: Hansen and Sargent (1980)p. 149
A simpler example: Hall's permanent income modelp. 155
Concluding notep. 157
The Representative Agent Versus Microfoundationsp. 158
The argumentp. 158
The monkey modelp. 158
Market clearing and rational expectationsp. 162
Micro theoryp. 166
The fallacy of compositionp. 170
Concluding notep. 174
The Myth of Microfoundationsp. 176
The mythp. 176
What foundation?p. 177
Aggregation gainp. 182
Theory of the firmp. 184
The macroeconomy as a social systemp. 186
General equilibrium theoryp. 189
Concluding notep. 194
Whither macroeconomics?
After Representative Agent Modelsp. 197
The end of the representative agentp. 197
Whither macroeconomics?p. 200
Notesp. 205
Bibliographyp. 211
Indexp. 224
Table of Contents provided by Syndetics. All Rights Reserved.

ISBN: 9780415146692
ISBN-10: 0415146690
Series: Routledge Frontiers of Political Economy
Audience: Professional
Format: Hardcover
Language: English
Number Of Pages: 240
Published: 3rd July 1997
Country of Publication: GB
Dimensions (cm): 24.08 x 16.15  x 2.18
Weight (kg): 0.54
Edition Number: 1

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