This paper examines the relationship between modern theories of microeconomics and macroeconomics and, more generally, it evaluates the prospects of theoretically reducing macroeconomics to microeconomics. Many economists have shown strong interest in providing "microfoundations" for macroeconomics and much of their work is germane to the issue of theoretical reduction. Especially relevant is the work that has been done on what is called The Problem of Aggregation. On some accounts, The Problem of Aggregation just is the problem of reducing macroeconomics to (...) microeconomics. I show how to separate these problems and then try to determine to what extent particular kinds of solutions to The Problem of Aggregation succeed in reducing macroeconomics to microeconomics as well. I argue that reduction is not possible by this means given the current state of microeconomics. I also describe how reduction may be possible by means of (dis)aggregation if microeconomics is supplemented in a certain way with the results of experimental research on individual economic agents. (shrink)

The Methodology of Empirical Macroeconomics stakes out a pragmatic middle-ground between traditional, prescriptive economic methodology and recent descriptive methodology. The former is sometimes seen as arrogantly telling economists how to do their work and the latter as irrelevant to their practice. The lectures are built around a case study of a concrete example of macroeconomic analysis. They demonstrate that economic methodology and the philosophy of science offer insights that help to resolve the genuine concerns of macroeconomists. Some examples of questions (...) addressed include: What is the relationship between theoretical models and empirical observations? What is the relevance of macroeconomics to policy? Should macroeconomics be viewed as a special case of microeconomics? What is the place of long-standing philosophical issues in macroeconomics, such as the scope and nature of economic laws, the role of idealizations, methodological individualism, and the problem of causality? (shrink)

Argues that ontological reduction of macroeconomics to microeconomics is untenable. Existence of macroeconomic aggregates; Microfoundations of macroeconomics; Examinations of the general price level; Limits of the scientific development of microeconomics.

Ever since David Hume, empiricists have barred powers and capacities from nature. In this book Cartwright argues that capacities are essential in our scientific world, and, contrary to empiricist orthodoxy, that they can meet sufficiently strict demands for testability. Econometrics is one discipline where probabilities are used to measure causal capacities, and the technology of modern physics provides several examples of testing capacities (such as lasers). Cartwright concludes by applying the lessons of the book about capacities and probabilities to the (...) explanation of the role of causality in quantum mechanics. (shrink)

The literature on the theory of social choice has grown considerably beyond the few items in existence at the time the first edition of this book appeared in 1951. Some of the new literature has dealt with the technical, mathematical aspects, more with the interpretive. My own thinking has also evolved somewhat, although I remain far from satisfied with present formulations. The exhaustion of the first edition provides a convenient time for a selective and personal stocktaking in the form of (...) an appended commentary entitled, 'Notes on the Theory of Social Choice, 1963, ' containing reflections on the text and its omissions and on some of the more recent literature. This form has seemed more appropriate than a revision of the original text, which has to some extent acquired a life of its own. (shrink)

Causality in Macroeconomics examines causality while taking macroeconomics seriously. A pragmatic and realistic philosophy is joined to a macroeconomic foundation that refines Herbert Simon's well-known work on causal order to make a case for a structural approach to causality. The structural approach is used to understand modern rational expectations models, regime switching models, Granger causality, vector autoregressions, the Lucas critique, and concept exogeneity. Techniques of causal inference based on patterns of stability and instability in the face of identified regime changes (...) are developed and illustrated in two empirical case studies. (shrink)

Although Considered By A Few Critics That The Sentence Structures Of The Book Are Quite Incomprehensible And Almost Unbearable To Read, The Book Is An Essential ...

This book offers a comprehensive overview of the structure, strategy and methods of assessment of orthodox theoretical economics. In Part I Professor Hausman explains how economists theorise, emphasising the essential underlying commitment of economists to a vision of economics as a separate science. In Part II he defends the view that the basic axioms of economics are 'inexact' since they deal only with the 'major' causes; unlike most writers on economic methodology, the author argues that it is the rules that (...) economists espouse rather than their practice that is at fault. Part III links the conception of economics as a separate science to the fact that economic theories offer reasons and justifications for human actions, not just their causes. With its lengthy appendix introducing relevant issues in philosophy of science, this book is a major addition to philosophy of economics and of social science. (shrink)

Plato’s often-quoted statement in the Phaedrus that we should “cut up each kind according to its species along its natural joints” (265e) has become an influential metaphor in discussions of natural kinds and natural properties. In this essay, I investigate the source domain of the metaphor, the joints of the animal body, to determine if these joints are indeed “natural”—meaning that there exists a single, non-disjunctive account of joint-hood applicable to the osteological world. By examining animal joints from the perspective (...) of both the butcher and the biologist, I argue that there is no single natural division of the body into component skeletal parts. I conclude by considering what impact this result should have on our understanding of natural kinds and on the metaphors we use to describe them. (shrink)