Advances in Information Architecture by Unknown

Author:Unknown
Language: eng
Format: epub
ISBN: 9783030632052
Publisher: Springer International Publishing

The Limitations of Micro–Macro Models

Micro–macro models have their roots in economics, in the work of Adam Smith in the eighteenth century and of John Maynard Keynes in the 1930’s.

The advantage of a micro–macro model is that it has scale factored into it, so we can understand individual behaviour and how that manifests into market behaviour and vice versa. This understanding between micro and macro represents a relationship that can be studied and used to explain certain behaviours at different scales, either at a micro or macro scale. However, there are limitations with the model because of the implicit granularity at each end of the scale: whilst “the simplicity and elegance of the micro and macro models make them useful in explaining the price mechanism and the balance or imbalance of key aggregate economic variables (…) both models are unable to describe or analyse the actual behaviour of key market participants” (Sheng & Geng, 2012).

In the social sciences, this shortcoming has led to models that include intermediate steps of analysis to better understand existing relationships, provide greater levels of detail, and combat the “black box” approximations that naturally accompany a binary micro–macro mindset when describing human behaviour from an economic perspective (Bocong, 2012). Waltz’s level of analysis framework is one of the most used frameworks (Waltz, 1959).

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.