Macroeconomics as Systems Theory: Transcending the Micro-Macro Dichotomy

by Richard E. Wagner

Overview

This book examines macroeconomic theory from an analytical framework provided by theories of complex systems, in contrast to conventional theories founded on aggregation. The resulting difference in analytical perspectives is huge: the macro level of society is not pursued through aggregation over micro entities. To the contrary, the micro-macro relation is treated as one of parts-to-whole, and this relation is approached from within an ecological scheme of thought. A society is a complex ecology of plans. That ecology, however, is not reducible to a single plan. 

Conventional macro theory presents a national economy as a collection of such aggregate variables as output, employment, investment, and a price level, and seeks to develop theoretical relationships among those variables. In contrast, the social-theoretic approach to macro or social theory in this book treats the standard macro variables as having been shaped through social institutions, conventions, and processes that in turn are generated through interaction among economizing persons. The object denoted as macro is thus of a higher order of complexity than the object denoted as micro.

Product Details

ISBN-13:	9783030444655
Publisher:	Palgrave Macmillan
Publication date:	05/02/2020
Sold by:	Barnes & Noble
Format:	eBook
File size:	970 KB

About the Author

Richard E. Wagner is Holbert L. Harris Professor of Economics at George Mason University, USA. He has authored about 30 books and monographs and 200 journal articles across a diverse spectrum of subjects in economic theory and political economy. He was the founding co-editor of Constitutional Political Economy from 1989-1997, and he is currently a member of the editorial boards of Constitutional Political Economy, the Journal of Public Finance and Public Choice, the Journal of Infrastructure, Policy, and Development, and the Review of Austrian Economics.

Table of Contents

1. Macroeconomics as Systems Theory: Setting the Stage.- 2. Models of Social Order: Mechanical vs. Creative.- 3. Structures of Production and Properties of Social Order.- 4. Diachronic Action within an Ecology of Plans.- 5. Kaleidic Economies and Internally Generated Change.- 6. Entangled Political Economy within Human Population Systems.- 7. Public Policy as the Political Calculation of Economic Value.- 8. Money, Credit, and Commanding the Societal Heights.- 9. Reason, Sentiment, and Democratic Action.- 10. Liberalism, Collectivism, and Democracy.

What People are Saying About This

From the Publisher

“Wagner brings the complexity revolution to macroeconomics, which has side-stepped it until now. We have not known how to do complexity macroeconomics, but with this important book Wagner has shown us the way. Key is the synthesis of process and structure. Fresh entrepreneurial dreams jostle together in a common institutional framework that constrains and shapes the resulting turbulent flow of economic life. Wagner’s theory enables us to use complexity tools to work out the macroeconomic consequences of this microeconomic jostling. A macroeconomics revolution is nigh.” (Roger Koppl, Professor Finance, Syracuse University)

“Wagner’s approach to macroeconomics represents a major step away from mainstream macroeconomics. He depicts the macroeconomy as a complex interaction among individuals, all of whom have their own plans. This stands in contrast with the aggregate nature of macroeconomic analysis, whether one is thinking of macroeconomic aggregates in a Keynesian framework or incorporating microfoundations in a representative agent framework. Wagner’s macroeconomy is a spontaneous order in which institutions can evolve to facilitate mutually beneficial interactions among individuals. This thought-provoking book will change the way readers think about macroeconomics.” (Randall G. Holcombe, DeVoe Moore Professor of Economics, Florida State University)

“This book is an important contribution to the debate on the nature and scope of macroeconomic analysis. Wagner warns us against questionable attempts to aggregate, measure and draw doubtful recipes for policy-making. Instead, he sticks to his subjectivist guns, bridges the gap between micro- and macroeconomics, and offers new insights into the role of institutions. Wagner deserves praise for this impressive scholarly achievement. While developing a literature that began with the Scottish Enlightenment, his pages provide path-breaking ideas that will capture the attention of the professionaleconomist and fascinate those who believe it is high time we start thinking out of the orthodox box.” (Enrico Colombatto, Professor of Economics, University of Turin)

Editorial Reviews

I hope the prose and tone of my summary conveys how much I thoroughly enjoyed and learned from this book. … Wagner’s book provides researchers with a legion of avenues of research for others to help continue to push our science in these (more fruitful) directions and uncover the unseen realities that current mainstream economics hides from our view.” (Jonathan W. Plante, The Review of Austrian Economics, Vol. 35 (4), 2022)

From the Publisher