Financial stability requires macroeconomic foundations of macroeconomics

Financial stability features prominently among the goals of several post­crisis macroeconomic policies around the world. Being a systemic characteristic, financial stability requires a systemic analysis, which only macroeconomics can offer logically. Yet, the current way of doing macroeconomics is n...

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Bibliographic Details
Published inThe journal of philosophical economics Vol. III; no. 2; pp. 58 - 73
Main Author Rossi, Sergio
Format Journal Article
LanguageEnglish
Published Rosetti International Publishing House 2010
Editura Rosetti International
Subjects
Economy
Philosophy
Philosophy of Science
Social Sciences
Social Theory
Socio-Economic Research
Sociology
Special Branches of Philosophy
monetary theory of production
macroeconomics
financial crises
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Summary:Financial stability features prominently among the goals of several post­crisis macroeconomic policies around the world. Being a systemic characteristic, financial stability requires a systemic analysis, which only macroeconomics can offer logically. Yet, the current way of doing macroeconomics is not up to the task, as it is grounded on so­called microfoundations. Considering macroeconomics as the science of aggregating data obtained at microeconomic level can lead indeed to conclusions that are either misleading or wrong. This paper points out that the true foundations of macroeconomics are macroeconomic, and that understanding the working of monetary economies of production and exchange requires a conceptual rather than a mathematical treatment of economic issues at a systemic level.
ISSN:1843-2298
1844-8208