Does Macroeconomics Require A Micro Foundation?

This article may be interesting to those who wonder about the relationship between Macro and Micro. Rational expectations theory is based upon a micro foundation. They don't have much use for Macro models. If one has questions about the validity of Micro foundations, and many, including myself, do have reservations about the validity of much that is assumed in Micro, one can do useful things without using micro concepts. Most models used to forecast macro outcomes are subject to Krugman's criticism. It is more important to understand whether increasing government spending will cause inflation when short term interest rates are at the zero bound than it is to make a precise prediction of next quarter's GDP.