A further issue is the modern association of macro with aggregates as opposed to individuals. Historically however the association was just as much with public (matters of state) as opposed to private. Arguably, macro was born when familiar phenomena of aggregate fluctuation came to be seen as matters of state. That implies that the question "which came first?" is not so much a matter of logical priority, as it is of political economy. Perhaps this explains the classification of trade vs. international finance. Think also monetary economics (central banks hence macro) vs. finance (Wall Street hence micro). Perry Mehrling ----- Original Message ----- From: "Kevin Hoover" <[log in to unmask]> To: [log in to unmask] Sent: Tuesday, 30 August, 2011 5:08:13 PM Subject: Re: [SHOE] is macro prior to micro? I took the question as one of logical rather than historical priority. The explicit concepts of micro and macro (originally due to Frisch) are correlative, so that historically neither is first. On looking at micro/macro before the concepts were explicitly distinguished, for the most part, I believe that Gary Mongiovi has made the right points. Micro and macroeconomics are concepts developed in the 1930s. Of course, many of the questions that they address are much older, so we can anachronistically go back and label this idea "micro" and that idea "macro" but we do so at our peril, since the protagonists did not think that way. Steve Medema, while pointing out some of the difficulties of disentangling these ideas in earlier periods, illustrates the pitfalls: exactly why, for example, is it that Trade analysis is micro-side, international finance is macro-side.? Finance and trade are two sides of the same transaction and the aggregate trade between nations, which often concerned earlier economists, has an equally good claim to being macro as the aggregate financial flows that accompanied them. I think that the main reason that we find it easy to make this assignment is that that this is the way that many economists today talk -- perhaps with no better warrant -- and we project back. Kevin Hoover On 8/30/2011 12:57 PM, Medema, Steven wrote: "I would be very interested to hear a historical answer (along with the methodological answer) to the question of what side of the discipline seems to be foundational." I would argue that there is no historical answer here. One could certainly argue that the "economic" analysis that we find in Plato and Aristotle was tilted toward the micro side, but they were responding to macroeconomic upheaval. Aquinas, too, had a more micro bent in terms of topics covered, but his concerns and goals were social/macro. Mercantilism? Trade analysis is micro-side, international finance is macro-side. The classical analysis had substantial micro and macro elements, and I would argue that neither was a priori more important or foundational than the other for these authors. Smith was writing a treatise on growth (one could argue), but he grounded it in micro-side phenomena such as the division of labor and the appropriate structuring of the market environment. Someone enamored of micro-foundations of macro might well look at Smith and see someone who made micro foundational. But I believe this is to mis-read Smith—that for Smith, it was a whole, with one side (if one can even speak of such here) no more foundational than the other. The idea of dividing economic analysis between micro and macro is a much more recent phenomenon, and was by no means universally accepted. Friedman, for one, always resisted the attempt to separate the two, and his price theory course at Chicago included elements that most would put under the "macro" heading. There may or may not be a consensus now (or in recent decades) that the micro side is foundational. But if there is such a consensus, I would expect that it is the first time in the history of economics that there has ever been a consensus on this subject. Steve Medema -- ************************************************************** KEVIN D. HOOVER Professor of Economics and Philosophy Duke University Editor, History of Political Economy E-mail [log in to unmask] Webpage www.econ.duke.edu/~kdh9/ Telephone (919) 660-1876 Fax (919) 684-8974 Economics: primary mailing address Department of Economics 213 Social Sciences Building Box 90097 Duke University Durham, North Carolina 27708-0097 Philosophy Department of Philosophy 201 West Duke Building Duke University Box 90743 Durham, North Carolina 27708-0743 *************************************************************** ***************************************************************