Notes on the Historical Approach as a Methodology of Macroeconomics: A Critique to Contemporary Macroeconomics
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Positive Economic Study
This paper proposes a path for macroeconomic analysis as an alternative to orthodox analysis because the latter cannot successfully describe the reality of an economic society with the following essential features: 1) the structure of the macroeconomy is basically a system open to the outside; 2) variables within the system are frequently affected by factors outside the system; 3) variables are constantly being influenced by newly emerging factors; 4) the subject of analysis is an aggregate rather than individuals; 5) people usually behave by considering the situation and changing their initial plans; 6) interdependency and feedback form the basic structure; and 7) people do not always behave rationally, and they tend to have some bias in their cognition. If economic society presents all these inevitable features, historical analysis as an evolutionary perspective might be an alternative method for economists.
IDEC DP2 Series