Re: RE: Microeconomics does pretty well with testable predictions.
This is known as "macroeconomics having microfoundations". And the answer is a bit tangled.
For when you try to build your macroeconomic model upon what we think is right about microeconomics, it turns out that the models don't describe the real world very well. Which leave us with two schools:
1) We need to do better.
2) Let's build our macro models without reference to the micro!
I'm in the third bit, the heresy, that says that macro doesn't work very well so let's not do macro. This is a heresy because it would mean all those economists using macro to work for banks and governments would be out of work.
Biting the hand that feeds IT
