ABSTRACT
This chapter argues that an essential question in contemporary macroeconomics debates is not whether macroeconomics must possess microeconomic foundations or not, but rather which type of microeconomic foundations is presupposed by each macroeconomic theory and policy. To do so, I distinguish two competing approaches to the microeconomic foundations of macroeconomics, which can be traced back to Frank Ramsey and John Maynard Keynes, respectively. Many subsequent controversies within macroeconomics can be understood in terms of a greater adherence either to Ramsey’s approach to microeconomic foundations or Keynes’s approach. I also note that the meaning of terms such as ‘classical’ and ‘Keynesian’ changed significantly through this historical process.
