Paul Krugman (2013): Macrofoundations: "Macro is the only reason anyone listens to all those microeconomists who think they’re being rigorous...
...We need to think about the history of thought.... American economics in the 1930s and even into the 1940s... was not at all the model-oriented, mathematical field it later became. Institutional economics was still a powerful force.... When Paul Samuelson published Foundations of Economic Analysis in 1947, the chairman of Harvard’s economics department tried to limit the print run to 500, grudgingly accepted a run of 750, and ordered the mathematical type broken up immediately. So why did model-oriented, math-heavy economics triumph? It wasn’t because general-equilibrium models of perfect competition had overwhelming empirical success. What happened, I’d argue, was Keynesian macroeconomics....
In the 1930s you had a catastrophe, and if you were a public official or even just a layman looking for guidance and understanding, what did you get from institutionalists?... You got long, elliptical explanations that it all had deep historical roots and clearly there was no quick fix. Meanwhile, along came the Keynesians, who were model-oriented, and who basically said “Push this button”–increase G, and all will be well. And the experience of the wartime boom seemed to demonstrate that demand-side expansion did indeed work the way the Keynesians said it did. It’s not an accident that Samuelson['s]... intro textbook... started with macro, and only got to micro later. The perceived success of macroeconomics did double duty, establishing the bona fides of a model-oriented approach and also suggesting that full employment was not too bad an assumption—given the right monetary and fiscal policies.... Economists who are upset that the public seems to judge the profession by its success at macro diagnosis and prediction are missing the point: it has always been thus, and purists who disdain macro are making mock of the only reason anyone takes them at all seriously.
The academic enterprise of economics as we know it, in other words, rests on a macro foundation, and in fact a Keynesian foundation—and economists who denounce all of that as witchcraft are busily sawing off the branch they’re sitting on.
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