An Ode to macro

Although this blog’s tagline reads delving into the magical world of economics – from a micro to macro perspective, I am afraid that this has mostly not been the case. As of writing, 12 different posts are embellished by the “macroeconomics” tag––compared to 1 measly micro tag. Why is this?

To start off, both are equally valuable components of economics. A slight bias for monetary policy aside (7 tags), I do appreciate microeconomics. This branch features great insight into the functioning of individual economic actors such as firms and consumers. And microeconomic systems are, of course, the very constituents of the larger macro entity.

The why starts to unravel when considering that often, the whole is greater than the sum of its parts. This core concept of complex system theory, present in animal ecosystems and AI, stands true for economics. Taken together, the micro components add up to a whole that is influenced and defined by the interactions and relationships between said constituents; these additional layers add to the thrill of macroeconomics.

The allure of macroeconomics, or economics as a whole, stems from these layers. By providing a nuanced platform, models and way of thinking, we can seek to better understand how the world works. Like a giant living organism, economics not only shows us how global systems of trade, production and consumption work, but also how to further their development.

What macroeconomics does, is put things into scale; that is why this branch is so disproportionately featured in posts. When looking at bellowing mountain ranges, vast oceans or the darkness of the night sky, we cannot help but feel a sense of awe. Awe directed at size, immensity and permanence that dwarfs our perspective of reality. This sublime, as the feeling or quality is labelled in art and philosophy, permeates macroeconomics.

The intangibility of GDP figures, daily Forex market trading volumes ($6.6 trillion), national debt as well as global corporate asset and borrowing levels, the list goes on: the world economy is one ungraspable, awe-inspiring, web that is both described and untangled by macroeconomics. Macro presents the unpresentable. Due to the sheer size, economics is also full of uncertainties and unpredictabilities. Shocks and crises can occur from one day to the other, sometimes exhibiting minimal warning beforehand. This quality of the global economy is a sobering reminder of our relative impotence in the face of something far greater than us. Like the forces of nature in waves and storms, we can sometimes only stand and watch as an economic crisis unfolds.

Not only does macroeconomics retain the models within a context of supply and demand so central to microeconomics, but it expands upon them and brings them to a scale beyond anyone’s control or grasp. Its vastness is engrossing, being both a blueprint of how the world is ordered and a blank canvas for new developments and change that will shape the future of economic theory. Awe, indeed, is the best way to describe the possibilities sketched by the plains of macroeconomics.

Note: 13 posts (and counting) have the macro-tag.