In economics, the term microfoundations refers to the microeconomic analysis of the behavior of individual agents such as households or firms that underpins a macroeconomic theory(Barro, 1993, Glossary, p. 594).Robert J. Barro (1993), Macroeconomics, 4th ed. ISBN 0-471-57543-7. Most early macroeconomic models, including early Keynesian models, were based on hypotheses about relationships between aggregate quantities, such as aggregate output, employment, consumption, and investment. Critics and… (More on Microfoundations)