Microfoundations

Microfoundations are the microeconomic behaviours of individual agents, like households or businesses, on which an economic theory is based.[1][2] Research in microfoundations explores the link between macroeconomic and microeconomic principles in order to explore the aggregate relationships in macroeconomic models.

During recent decades, macroeconomists have attempted to combine microeconomic models of individual behaviour to derive the relationships between macroeconomic variables. Presently, many macroeconomic models, representing different theories,[3] are derived by aggregating microeconomic models, allowing economists to test them with both macroeconomic and microeconomic data. However, microfoundations research is still heavily debated with management, strategy and organization scholars having varying views on the "micro-macro" link.[4] The study of microfoundations is gaining popularity even outside the field of economics, recent development includes operation management and project studies.[5]