More than ten years ago, Frank Hahn and Robert Solow, two of the most influential economists of the twentieth century, delivered a fierce attack against the main trend of macroeconomic theory and the methodological quest for micro-foundations by arguing against […] the belief that the only appropriate micro model is Walrasian or inter-temporal-Walrasian or, as the saying goes, based exclusively on inter-temporal utility maximization subject only to budget and technological constraints. This commitment, never really argued, is the rub (Hahn and Solow (1995), p.1).

Admittedly, their criticisms and proposed solutions have gone largely unnoticed. The alternative proposal we shall put forward in what follows with the Walrasian paradigm is definitely more radical. As a preliminary step, however, it seems worthwhile to emphasize that Walrasian micro- foundations should be considered as a wrong answer to what is probably the most stimulating research question ever raised in economics, that is, to explain how a completely decentralized economy composed of millions of (mainly) self-interested people manages to coordinate.

The way in which billions of people, located everywhere in the world, exchange goods, often coming from very remote places, in decentralized market economies is a fundamental problem of macroeconomic theory. At present, there is no consensus regarding which theory best explains this problem. At one end of the spectrum, new classical macroeconomists work within frameworks in which the macroeconomy is assumed to be in a continual state of market clearing equilibrium characterized by strong efficiency properties. At the other end of the spectrum, heterodox macroeconomists argue that economies regularly exhibit coordination failure (various degrees of inefficiency) and even lengthy periods of disequilibrium. Given these fundamental differences, it is not surprising to see major disagreements among macroeconomists concerning the extent to which government policy makers can and ought to attempt to influence macroeconomic outcomes.