Holism and the fallacy of composition in macroeconomics

Jesper Jespersen, Victoria Chick*

*Corresponding author

Publikation: Bidrag til bog/antologi/rapportBidrag til bog/antologiForskningpeer review

Abstract

Macroeconomics became a distinct discipline as a consequence of Keynes’s General Theory. He argued that the ‘sum of the parts’ often differs from a simple aggregation of the parts, as practised in methodological individualism. Judging the whole from the behaviour of a part leaves out viral feedbacks and risks the fallacy of composition.

But, when it comes to applications, most macro-systems are too complex to be analysed as a whole. Much of the success of a system-theoretic approach to the macroeconomy depends on decisions about how to parcel the system up into relevant sub-parts for analysis. Perhaps the first step into a macroeconomic analysis should be to describe a procedure for setting up dividing lines to establish semi-closures, where the holistic nature of the economy as a whole under study is recognised and fits together coherently in a second analytical round.
OriginalsprogEngelsk
TitelRoutledge Handbook of Macroeconomic Methodology
RedaktørerJesper Jespersen, Victoria Chick, Bert Tieben
Antal sider10
UdgivelsesstedAbingdon, Oxon
ForlagRoutledge
Publikationsdato20 jun. 2023
Udgave1
Sider54-63
Kapitel5
ISBN (Trykt)9781138816626, 9781032463490
ISBN (Elektronisk)9781315745992
DOI
StatusUdgivet - 20 jun. 2023
NavnRoutledge International Handbooks

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