Microfoundations and the macroeconomy as a giant coordination problem

My two cents on the “microfoundations” problem in macro. The key to good microfoundations is modeling the macroeconomy as a giant coordination problem, and the bank-based monetary system as the best means we have of solving that problem. In this framework, the real challenge for macro is to model/determine what are the essential components of a financial infrastructure that solves the coordination problem.

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