Theory to the Rescue of Large-scale Models: Edmond Malinvaud’s View on the Search for Microfoundations

Abstract

As a complement to Hoover (2012), this paper addresses the compatibility between the “General Equilibrium†(in particular, the disequilibrium theory†) and the “Aggregation†(i.e. large-scale models) microfoundational programs in the search for microfoundations in macroeconomics. For this purpose, Edmond Malinvaud is an interesting case, for he committed to both microfoundational programs and used to regard them as compatible. This paper brings such compatibility to the forefront through the analysis of Malinvaud's conception of macroeconomics, his alternative view on the search for microfoundations, and his research agenda in disequilibrium theory throughout the 1970s and the 1980s.