Towards Pluralism in Macroeconomics?

The keynote argues that traditional macroeconomic models relying on perfectly rational representative agents (e.g., DSGE models) are fundamentally flawed, as they ignore human limitations, behavioral diversity, and aggregation complexities. Instead, the speaker advocates for behavioral and complexity macroeconomics—integrating insights from behavioral economics (e.g., bounded rationality, heuristics, fairness perceptions) with complexity science (e.g., emergent phenomena, agent interactions, and system-level dynamics). This approach acknowledges heterogeneity, adaptation, and fundamental uncertainty, rejecting equilibrium-centric frameworks. Agent-based modeling is proposed as a key tool to operationalize this paradigm, enabling the study of how micro-level behaviors generate macro outcomes through decentralized interactions. Challenges include empirical validation and granularity, but this fusion offers a more realistic, pluralistic foundation for macro theory, aligning with Post-Keynesian concerns while advancing beyond ad hoc behavioral additions to mainstream models.

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Comment from our editors:

This keynote by Matthias Roos, delivered at the FMM: Towards Pluralism in Macroeconomics conference, represents a bold critique of mainstream macroeconomics and a compelling case for integrating behavioral economics and complexity science. Roos dismantles the foundations of dominant DSGE models, arguing that DSGE models—built on perfectly rational representative agents—fundamentally misrepresent real economies by ignoring human psychology, heterogeneity, and emergent complexity. Roos advocates for behavioral and complexity macroeconomics as a paradigm shift: integrating bounded rationality (e.g., heuristics, fairness norms) with agent-based modeling to capture how decentralized interactions generate unpredictable macro dynamics. While acknowledging challenges (e.g., empirical validation, policy tractability), he positions this fusion as essential for post-crisis economics, bridging Post-Keynesian insights (uncertainty, animal spirits) with modern complexity science. The talk is a compelling call to rebuild macro theory beyond neoclassical constraints, aligning squarely with pluralist movements seeking realistic alternatives.

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