Journal Article

No. 2009-19 | May 11, 2009
Implicit Microfoundations for Macroeconomics PDF Icon
(Published in Special Issue Reconstructing Macroeconomics)


A large market economy has a huge number of degrees of freedom with weak micro-level coordination. The "implicit microfoundations" approach considers this property of micro-level interactions to more strongly determine macro-level outcomes compared to the precise details of individual choice behavior; that is, the "particle" nature of individuals dominates their "mechanical" nature. So rather than taking an "explicit microfoundations" approach, in which individuals are represented as "white-box" sources of fully-specified optimizing behavior ("rational agents"), we instead represent individuals as "black box" sources of unpredictable noise subject to objective constraints ("zero-intelligence agents"). To illustrate the potential of the approach we examine a parsimonious, agent-based macroeconomic model with implicit microfoundations. It generates many of the reported empirical distributions of capitalist economies, including the distribution of income, firm sizes, firm growth, GDP and recessions.

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JEL Classification

A12 B41 C63 D50 E11 P16


Ian Wright (2009). Implicit Microfoundations for Macroeconomics. Economics: The Open-Access, Open-Assessment E-Journal, 3 (2009-19): 1—27.


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