Micro Takes Over Macro

Abstract

An analytical innovation enhances microeconomics, enabling it to answer all questions of macroeconomics. It combines the production and consumption decisions of the individual in one model. For each individual, it identifies the customers of what he sells, and the suppliers of what he buys. It specifies the exchange relations between the suppliers and the customers. These relations deal with value (quantities and prices), payment (subsistence, barter, money, and bond) and intermediation (entrepreneurship, transaction costs, institutions), all of them integrated. It is easier done than said with the input- output table. There is no further need for a separate macroeconomics.Microeconomics, macroeconomics, innovation, output, employment, money.