Macroeconomic analysis and individual economic rationality: some lessons from Wicksell to Schumpeter and von Mises

Abstract

The purpose of this contribution is to investigate the problem of the room attributed to individual economic rationality by circulation approaches. Our investigation will not privilege however the modern contributions of this approach but will instead utilize the works of some economists of the past, namely, Knut Wicksell, Josef Schumpeter and Ludwig von Mises. Our first section will recall how the modern ‘circulation approach' considers the problem of the compatibility between economic individual rationality and macroeconomic analysis and how this problem emerged in Wicksell's original theory of a pure credit economy. Section 2 will focus on the transition from Schumpeter's circular flow to economic development and show how it is directly related to the problem of economic rationality. Section 3 will show that Mises' conception of economic progress emphasizes the importance of consumers and producers' individual behaviours. In the last section, we will finally draw some conclusions from our previous investigation of Wicksell, Schumpeter and Mises' works and confront them to the developments of the modern circulation approach.Individual economic rationality ; macroeconomic analysis ; knowledge ; beliefs