Macro Should Split Off From Micro

Macro models are generally founded upon micro models in economics. Perhaps it is time for a split of the two topics into separate disciplines. Macroeconomics is a mess and the problems are compounded by brilliant microeconomists like Becker spouting off nonsense about it.

Matthew Yglesias » Home Page: "As a general principle for investigating the world, we normally deem it desirable, but not at all necessary, that researchers exploring a particular field of inquiry find ways to “reduce” what they’re doing to a lower level. To make that concrete, in the modern day we have achieved a decent understanding of how principles of chemistry are grounded in physics’ understanding of the behavior of atoms. But it’s just not the case that advances in chemistry were made by demanding that chemists ground all their models in subatomic physics. On the contrary, chemistry moved forward in the first instance by having chemists investigate issues in chemistry and see which models and theories held up. Similarly, though psychology is intertwined with the detailed study of the biology of the brain, it’s not deemed illegitimate to research psychological issues in the absence of a specific neurological theory. Nor, for that matter, do microeconomists generally deem it necessary to explore in detail the psychological foundations of their models. The models are, rather, judged by whether or not they produce fruitful insights about economics. Trying to enhance models with better information about psychology isn’t against the rules, but it’s not required either. What’s required is that the models do useful work."