Title

The Reconciliation of Micro and Macro Economics

Authors

Martin Shubik

Document Type

Discussion Paper

Publication Date

6-1-1989

CFDP Number

915

CFDP Pages

29

Abstract

It is suggested that the appropriate structure for the reconciliation of micro and macroeconomics is an infinite horizon overlapping generations (OLG) model with many finitely lived natural persons and one infinitely lived strategic player without preferences whose choice rule is determined by the periodic political choice of the finitely lived players who are alive and politically strategically active at the time of choice. This player may be interpreted as government. In the steps from the finite horizon general equilibrium (GE) model to the overlapping generations model (GGOLG) it is suggested that even without exogenous uncertainty, if economic efficiency is to be attained it is logically and technologically necessary to introduce government, government money, credit, bankruptcy and inheritance conditions.

This document is currently not available here.

Share

COinS