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Economists commonly consider themselves microeconomists or macroeconomists. The difference between microeconomics and macroeconomics likely was introduced in 1933 by the Norwegian economist Ragnar Frisch, the co-recipient of the first Nobel Memorial Prize in Economic Sciences in 1969.
Macroeconomics is traditionally divided into topics along different time frames: the analysis of short-term fluctuations over the business cycle, the determination of structural levels of variables like inflation and unemployment in the medium (i.e. unaffected by short-term deviations) term, and the study of long-term economic growth.
This approach is considered to be the trigger for exploring microfoundations, [1] however, the notion of a gap in the "micro-macro" link has been and continues to be explored in various theories and models. Critics of the Keynesian theory of macroeconomics argued that some of Keynes' assumptions were inconsistent with standard microeconomics.
Manasseh Wepundi noted the difference between "the unit of analysis, that is the phenomenon about which generalizations are to be made, that which each 'case' in the data file represents and the level of analysis, that is, the manner in which the units of analysis can be arrayed on a continuum from the very small (micro) to very large (macro ...
A macroeconomic model is an analytical tool designed to describe the operation of the problems of economy of a country or a region. These models are usually designed to examine the comparative statics and dynamics of aggregate quantities such as the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the level of prices.
The main point is that there is an asymmetry in the psychology of the economic agent that gives a much higher value to losses than to gains. This article is usually regarded as the beginning of behavioural economics and has consequences particularly regarding the world of finance. The authors summed the idea in the abstract as follows:
The differentiation between long-run and short-run economic models did not come into practice until 1890, with Alfred Marshall's publication of his work Principles of Economics. However, there is no hard and fast definition as to what is classified as "long" or "short" and mostly relies on the economic perspective being taken.
Economic policy in Europe during the late Middle Ages and early Renaissance treated economic activity as a good which was to be taxed to raise revenues for the nobility and the church. Economic exchanges were regulated by feudal rights, such as the right to collect a toll or hold a fair, as well as guild restrictions and religious restrictions ...