I argue that it is microeconomics that needs foundations, not macroeconomics. Preferences need to be built on biology, and, in particular, on neuroscience. In contrast, macroeconomics could benefit from rationalizations of aggregate economic phenomena by non-equilibrium statistical physics. Special issue Reconstructing Macroeconomics JEL: B22, B41, C82, D87

Theory suggests advertising should be remarkably sensitive to profit margins. Firms advertise to stimulate demand for their products. They advertise high-margin products aggressively and low-margin ones hardly at all. In modern macroeconomics, wedges are potent sources of fluctuations in employment. The profit margin or markup ratio is a leading example. In an important class of fluctuations mo...

Contrasts are drawn between mainstream macroeconomics (with the ›New Consensus in Macroeconomics‹ taken as the current manifestation) and heterodox macroeconomics and their abilities to comprehend the fi nancial crises and world wide recession of 2007 – 09 for macroeconomic paradigms is discussed. Specifi cally, the contrasting ways in which the two schools of thought treat unemployment, human ...

A few decades ago macroeconomics was a field of its own. Now there is an understanding that macroeconomics should have explicit micro foundations. This project aims to look into several traditional arenas of macroeconomics from the microeconomics standpoint. Specifically, we focus on the role of imperfect information and bounded rationality for the real business cycle, growth, and money.

The purpose of this article is to get mathematicians interested in studying a number of partial differential equations (PDEs) that naturally arise in macroeconomics. These PDEs come from models designed to study some of the most important questions in economics. At the same time, they are highly interesting for mathematicians because their structure is often quite difficult. We present a number...