The reductionism stops here

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One of the defin­ing fea­tures of neo­clas­si­cal eco­nom­ics is the belief that macro­eco­nom­ic analy­sis has to be not mere­ly com­pat­i­ble with, but deriv­able from, micro­eco­nom­ic analy­sis. The devel­op­ment of eco­nom­ic the­o­ry has been dri­ven far more by this belief than by the desire to make the the­o­ry com­pat­i­ble with the observed behav­iour of the econ­o­my.

This ‘reduc­tion­ist’ aspect of eco­nom­ics – the attempt to reduce the high­er lev­el top­ic of macro­eco­nom­ics to an applied ver­sion of the low­er lev­el top­ic of micro­eco­nom­ics – is at odds with the last 50 years of gen­uine sci­ences, where com­plex­i­ty has ruled the roost, for rea­sons that were elo­quent­ly put by Physics Nobel Lau­re­ate Philip Ander­son in a high­ly read­able paper enti­tled More Is Dif­fer­ent”.

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About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.