Limitations of Macro Economics

Limitations

Macro economics suffers from certain limitations. They are:

1. There is a danger of excessive generalisation of the economy as a whole.

2. It assumes homogeneity among the individual units.

3. There is a fallacy of composition. What is good of an individual need not be good for nation and viceversa. And, what is good for a country is not good for another country and at another time.

4. Many non - economic factors determine economic activities; but they do not find place in the usual macroeconomic books.