Individual Behaviors and Collective Welfare: Ramsey’s “microfoundations” of “macro-equilibrium”

Since the end of 1970's-and the success of the New Classical School –, the face of macroeconomics has changed profoundly. On the one hand, the research has turned gradually away from the analysis of the short-term fluctuations to favor a study of the long term determining factors of macroeconomic variables. One has studied the determinants of growth and has interpreted the cycles as fluctuations around these long-term values. On the other hand and in the same movement, one saw setting itself a general equilibrium macroeconomics. One of the weapons of these alterations is what is called in a generic way the " à la Ramsey models ". In its simplest shape, this type of model considers an economic agent with infinite life expectancy, who decides on the intertemporal allocation of its income and work. Under certain very restrictive conditions, this economic agent can be interpreted as a " representative agent " , whose choices represent those of an economy of general equilibrium.