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Why is macroeconomics no longer relevant?

Economics Dec 14, 2020

Why is macroeconomics no longer relevant?

Expert Solution

Microeconomics is not relevant in today's world because an individual has to look to micro variables before moving to the macro level. If the micro foundation is not strong the economy cannot work in the long run and there will be no use of studying macroeconomics.

Reasons why macroeconomics no longer relevant are:

1 Composition: Macroeconomics is based on individual activities. But what is true of individuals is not necessarily true to the fiscal entirely.

2 Regards aggregates: Macroeconomics regards all the activities as homogeneous but it real these economic activates are heterogeneous in nature.

3 False representation: What is true to macroeconomics may not be true to the individuals at micro level for example, some firms may face losses in the boom period and conversely, they may be accumulating profits in a precise of depression.

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