Uncertainty in Macro-Economics: A Comment

Abstract

The role of uncertainty in macro-economic theories, controversies and policies is a timely and very important subject. Professor von Furstenberg's paper gives a profound and well-informed presentation. His survey is not dogmatic at all. On the contrary, useful bridges are proposed between competing perspectives, and the conclusions are documented and open to discussion. I agree completely with the general diagnosis, namely that the current treatment of uncertainty in macro-economic models is inadequate and that this situation has crucial implications at the policy level. I will pick out a few points for discussion. 1.) Nearly half of the paper is devoted to aggregation problems, and topics which are related to it (representative-agent models, the micro-economic foundations of macroeconomics, etc.). To be sure, spatial and intertemporal aggregation is an important dimension of the subject, since it both increases uncertainty (by inducing a loss of information) and may reduce it. This observation leads to the concept of optimum aggregation level and procedure. Even if aggregation is crucial, some other issues deserve interest.