Abstract
This paper considers the doctrine that macroeconomics must be based on microfoundations. Nowadays, microfoundations has become the sine qua non of sound macroeconomics after the Lucas critique. Due to this criterion, macroeconomic models that are not explicitly derived from microeconomic principles are rejected on account of using "ad hoc" assumptions. Kevin Hoover calls this version of microfoundations "eliminative microfoundations". In this paper, I will challenge this presumed consensus and discuss its underlying philosophical beliefs. The rationale of microfoundations will be introduced and discussed. I conclude that the dominant microfoundations are unsatisfactory because their aggregation procedures rely heavily on unbelievable assumptions. I then discuss the two relevant philosophical beliefs: methodological individualism and ontological individualism. I argue that methodological individualism is not necessary from the perspective of Marshallian tradition. Next, I discuss three versions of ontological individualism and refute them respectively. I argue that (1) Macroecnomics can not be reduced to Microeconomics and that (2) Macroeconomics has its own autonomy and that (3) macroeconomic properties do not supervene on microeconomic properties. Basically, I agree with what Kevin Hoover said except two things. I argue that his use of the notion "supervenience" is inappropriate, and that his appeal to John Searle' ontological account can lead to a contradiction. Finally, applying the concept of "multiple equilibria" and "path dependence", I argue that macroeconomic properties are not fully determined by microeconomic properties.