Krugman Claims That European Economic Thinking Is Based On Microeconomics And Ignores Macroeconomics

Krugman makes two excellent points in this article. The first point is that European leaders support two policies, deregulation and trade liberalization, to stimulate growth in Europe, and that this is irrelevant. It does nothing to deal with urgent problem of low aggregate demand that being depressed by the deleveraging of public and private debt. He also argues that European policies are based upon microeconomic theory and not on macroeconomics. He should have reminded us as well that the subordination of macroeconomics to microeconomics has a long tradition. It started when Samuelson popularized Keynes in a way that led to a view of Keynesian theory as microeconomic with sticky prices.