This paper is an attempt to understand Lucas’s microfounded models of the 1960-70s as outcomes of a structuralist interest. It is argued that the way Lucas derived macroeconomic outcomes from the decisions of market agents is in line with the basic creed of the semirealist version of structural realism, where structures are conceived as relations emerging between properties of relata under specific conditions. Accordingly, after an overview of Semirealism and its criticism on some rival philosophies, it is emphasized that Lucas in his microfoundations project formulated the basic decision problem so that agents’ properties could plausibly be regarded as responsible for the emergence of large-scale fluctuations. The transition of Lucas and Rapping’s model of the labour market to Lucas’s monetary island model is described as placing the same decision makers into a setting where the conditions are given to the assumed actions and interactions of market participants.
The full text of the paper is available here. Any comments are warmly welcome.
Peter Galbács - Adventures in Neoclassical Economics 