In this chapter we will question the assumption of a representative household for the whole economy commonly made in the macroeconomics literature. This assumption is completely at odds with what we observe as the real outcomes of capitalist economies, particularly in the more advanced ones. In reality there is conflict over income distribution between the owners of the capital stock and labor. Firms may be assumed to be profit-maximizing and interacting with the unions of workers in the wage bargaining process, the latter also holding in the representative agent framework that we will discuss in this chapter.