Perhaps I am wrong but it seems to me that all of the popular books that stress the economic rationality of various kinds of human behavior are, broadly speaking, microeconomics books. When it comes to macroeconomics, the popular literature and most of the scholarly literature emphasizes the collective irrationality of individual behavior -- for example, people lose confidence in the macro environment and then slow down their spending thus making matters worse, etc. What does this separation or dichotomy imply? We are rational in the small and irrational in the large? This is a first-class mess.
Sunday, January 20, 2008
Hoisted from Comments- Logic of Micro and Macro
Hoisted from comments to a Peter Boettke post- Mario Rizzo writes;