<p>Not sure what you mean by formally proven in this case, but it’s just true by definition.</p>

<p>Macroeconomics is by definition branch of economics that studies the behavior of economy as a whole as opposed to individual markets or actors separately which is studied by Microeconomics.</p>

<p>General equilibrium is by definition an equilibrium of whole economy or several markets.</p>

<p>Hence it just follows from definition of both general equilibrium and macroeconomics. Most of the economics is devoted to study of equilibria for better or worse so if you study macroeconomics you almost always study general equilibrium in one way or another. It’s equivalent to say that microbiology is about small organisms. It’s true just by definition.</p>

CC BY-SA 4.0
2020-01-24T21:07:24.373Z
The fact that macroeconomics studies the economy as a whole doesn't directly imply that a target equilibrium state exists - actually, it seems quite counterintuive that such an equilibrium state exists in an actual economy. Isn't it a huge implication to put in a model that's supposed to describe in great detail our economy?
Michele Palmia
CC BY-SA 4.0
2020-01-24T21:17:28.237Z
@micpalmia in economics the concept of equilibrium exists. Your question was about proving the statement “Macroeconomics is about general equilibrium.” This is completely different question from asking whether real world economy can ever be in equilibrium. Most macroeconomists study in their models general equilibrium so the statement is trivially true. Also a formal proof is a proof based on axioms and deductive reasoning. Formally you can easily prove general equilibrium exists in let’s say IS-LM model. If you want to know if a thing exists outside models you want empirical proof
1muflon1
CC BY-SA 4.0
2020-01-24T21:18:11.443Z
@micpalmia: I think you're confusing the issue of the general equilibrium being a topic of great interest with an assertion that it exists and/or it is unique; see https://en.wikipedia.org/wiki/General_equilibrium_theory#Determinacy (Likewise for its stability; see next section on that page.)
fantastic peace and prosperity
CC BY-SA 4.0
2020-01-25T05:47:43.313Z
I just know RE and some econometrics so really some macro  But I've recently been looking at another field called econo-physics. This field seems to look at things sort of from an non-equilibrium viewpoint. At a glance, it looks quite useful to have a math from physics background.  I just started but it's been interesting to read it's philosophy and how different it is from  RE and macro. Key and prolific players in econo-physics are doyne farmer and j.p. bouchaud.  The only point here is that there are  fields whose goals are the same as economics but whose methodologies are different.
mark leeds
CC BY-SA 4.0
2020-01-24T20:43:19.393Z
2020-01-24T21:05:06.557Z
2020-01-24T21:05:06.557Z
1muflon1
<p>In a fairly popular paper published a couple of years ago ("On the future of macroeconomic models"), <a href="https://watermark.silverchair.com/grx045.pdf?token=AQECAHi208BE49Ooan9kkhW_Ercy7Dm3ZL_9Cf3qfKAc485ysgAAAnYwggJyBgkqhkiG9w0BBwagggJjMIICXwIBADCCAlgGCSqGSIb3DQEHATAeBglghkgBZQMEAS4wEQQM5lUn30dEpLz8fmmuAgEQgIICKa_ISGouh8VN3xMIKjbzgxrTW7Uvf4N7GVUOvQKTqJcR3ibBpYBeybdo6rpzSTFW1lT1Xx-gRxO3Txyst4YAkQn1LFx3WJSlRrgUfRw-nnr_OljfzuMyO7u8dHMIbnFLVmYh3-BTHyv76aiVabf1T2xEjvqSgr1CQKk_XhrRoRLUueLqzfx3tsULAuTbqa-FnKi0A5mbIq90IzvjoWc4_RTYuPaA46bf5F7iahCqO4Fu5MxHdMz_c40Ht2cnlTKfKFw3VKTQOdDCDOgYZHBjwMdhsklc00p0Nv-C0iTIFq-uUhZYzzZ2CeOynsLLGzdj6tvZxUg9nheTPXaB2gqDQihrBsGuHa9wCv6jt9ZswyOhgZyR_jnNnS9cRAot6vhr876c6Cb4J0leelbene_PkS3SsHcaQEMxfaulpsiCQuCZh0ZYmqePbd6pdBrhOMEItN4T4b0myCGZ178mCSpg5y8nP2NdIOtV80qWtDl32mapNGHsxPhn2ieaBpdVHwYod8KG0GHB7A3lq-6tdruO7p6wur0_iI_YHBdFBS19bwPSiuwqwepvQC4DedguDIpz-tyIFAFRFZyR80d2JxXqbSwF8hXoQ4otElMRQa2aYOCPkW61u43WNPgVN7t6MCoE1wopBBvF6I_TG__7rT4bqD9vsCkoPn0Lf-Mg4Bo9D1DSm84dDIrBpDbmFrngQhdcJckWFAcgvgDBrC44aopBKujOLKSXKVepAzs" rel="nofollow noreferrer">Blanchard (2018)</a> makes the following statement, among other "widely believed propositions":</p>

<blockquote>
  <p>(i) Macroeconomics is about general equilibrium.</p>
</blockquote>

<p>Unfortunately, no note or reference is given for this statement.</p>

<p>Is this statement true? How can it be formally proven? What is the intuition behind it?</p>

<macroeconomics><general-equilibrium>
Why is macroeconomics about general equilibrium?
Michele Palmia
# Why is macroeconomics about general equilibrium?

(Asked by: username_0 on 2020-01-24)

In a fairly popular paper published a couple of years ago ("On the future of macroeconomic models"), [Blanchard (2018)](https://watermark.silverchair.com/grx045.pdf?token=AQECAHi208BE49Ooan9kkhW_Ercy7Dm3ZL_9Cf3qfKAc485ysgAAAnYwggJyBgkqhkiG9w0BBwagggJjMIICXwIBADCCAlgGCSqGSIb3DQEHATAeBglghkgBZQMEAS4wEQQM5lUn30dEpLz8fmmuAgEQgIICKa_ISGouh8VN3xMIKjbzgxrTW7Uvf4N7GVUOvQKTqJcR3ibBpYBeybdo6rpzSTFW1lT1Xx-gRxO3Txyst4YAkQn1LFx3WJSlRrgUfRw-nnr_OljfzuMyO7u8dHMIbnFLVmYh3-BTHyv76aiVabf1T2xEjvqSgr1CQKk_XhrRoRLUueLqzfx3tsULAuTbqa-FnKi0A5mbIq90IzvjoWc4_RTYuPaA46bf5F7iahCqO4Fu5MxHdMz_c40Ht2cnlTKfKFw3VKTQOdDCDOgYZHBjwMdhsklc00p0Nv-C0iTIFq-uUhZYzzZ2CeOynsLLGzdj6tvZxUg9nheTPXaB2gqDQihrBsGuHa9wCv6jt9ZswyOhgZyR_jnNnS9cRAot6vhr876c6Cb4J0leelbene_PkS3SsHcaQEMxfaulpsiCQuCZh0ZYmqePbd6pdBrhOMEItN4T4b0myCGZ178mCSpg5y8nP2NdIOtV80qWtDl32mapNGHsxPhn2ieaBpdVHwYod8KG0GHB7A3lq-6tdruO7p6wur0_iI_YHBdFBS19bwPSiuwqwepvQC4DedguDIpz-tyIFAFRFZyR80d2JxXqbSwF8hXoQ4otElMRQa2aYOCPkW61u43WNPgVN7t6MCoE1wopBBvF6I_TG__7rT4bqD9vsCkoPn0Lf-Mg4Bo9D1DSm84dDIrBpDbmFrngQhdcJckWFAcgvgDBrC44aopBKujOLKSXKVepAzs) makes the following statement, among other "widely believed propositions":

> (i) Macroeconomics is about general equilibrium.

Unfortunately, no note or reference is given for this statement.

Is this statement true? How can it be formally proven? What is the intuition behind it?

**Tags:** macroeconomics, general-equilibrium


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## 1 answers

### Answer by username_1 on 2020-01-24. Score: 1

Not sure what you mean by formally proven in this case, but it’s just true by definition.

Macroeconomics is by definition branch of economics that studies the behavior of economy as a whole as opposed to individual markets or actors separately which is studied by Microeconomics.

General equilibrium is by definition an equilibrium of whole economy or several markets.

Hence it just follows from definition of both general equilibrium and macroeconomics. Most of the economics is devoted to study of equilibria for better or worse so if you study macroeconomics you almost always study general equilibrium in one way or another. It’s equivalent to say that microbiology is about small organisms. It’s true just by definition.

> **Comments:**
> **username_0**: The fact that macroeconomics studies the economy as a whole doesn't directly imply that a target equilibrium state exists - actually, it seems quite counterintuive that such an equilibrium state exists in an actual economy. Isn't it a huge implication to put in a model that's supposed to describe in great detail our economy?  
> **username_1**: @micpalmia in economics the concept of equilibrium exists. Your question was about proving the statement “Macroeconomics is about general equilibrium.” This is completely different question from asking whether real world economy can ever be in equilibrium. Most macroeconomists study in their models general equilibrium so the statement is trivially true. Also a formal proof is a proof based on axioms and deductive reasoning. Formally you can easily prove general equilibrium exists in let’s say IS-LM model. If you want to know if a thing exists outside models you want empirical proof  
> **username_2**: @micpalmia: I think you're confusing the issue of the general equilibrium being a topic of great interest with an assertion that it exists and/or it is unique; see https://en.wikipedia.org/wiki/General_equilibrium_theory#Determinacy (Likewise for its stability; see next section on that page.)  
> **username_3**: I just know RE and some econometrics so really some macro  But I've recently been looking at another field called econo-physics. This field seems to look at things sort of from an non-equilibrium viewpoint. At a glance, it looks quite useful to have a math from physics background.  I just started but it's been interesting to read it's philosophy and how different it is from  RE and macro. Key and prolific players in econo-physics are doyne farmer and j.p. bouchaud.  The only point here is that there are  fields whose goals are the same as economics but whose methodologies are different.  

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