Macroeconomics As Systems Theory

49 Pages Posted: 16 May 2019

See all articles by Richard E. Wagner

Richard E. Wagner

George Mason University - Department of Economics

Date Written: May 16, 2019

Abstract

This essay is the penultimate draft of Chapter 1 of a book that carries the working title Macroeconomics as Systems Theory: Emergence, Institutions, and Economic Process. This book examines the material of macroeconomic theory by looking through a different analytical window from what most theorists use. The conventional analytical window shows a national economy as a collection of such aggregate variables as output, employment, investment, and a price level, and seeks to develop theoretical relationships among those variables. The macro level of an economy is accessed directly through the variables created through the national income and product accounts and similar series of aggregate data. In contrast, I treat the relation between micro and macro theories as a relation between the parts of something and the entirety of that thing. Hence, the analytical object to which macro theory pertains entails a higher order of complexity than that of micro theory. Where micro variables are aptly characterized as objects of choice, macro variables are not. To the contrary, macro variables are products of emergent interaction and spontaneous ordering. Furthermore, there is no position of “policymaker” who stands outside the macro system, for all economizing action occurs inside the economic system.

Keywords: systems theory; complexity; micro-macro dialectics; systems as causal agents; plans as primitive variables; spending as derivative variables; order without equilibrium

JEL Classification: B41, D85, E02, E10, P16

Suggested Citation

Wagner, Richard E., Macroeconomics As Systems Theory (May 16, 2019). GMU Working Paper in Economics No. 19-18. Available at SSRN: https://ssrn.com/abstract=3389058 or http://dx.doi.org/10.2139/ssrn.3389058

Richard E. Wagner (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
334 Enterprise Hall
Fairfax, VA 22030
United States
(703) 993-1132 (Phone)

Register to save articles to
your library

Register

Paper statistics

Downloads
52
Abstract Views
204
rank
384,564
PlumX Metrics