If you occasionally drive on a highway, you probably know what a rubber-necking traffic jam is and why it is so annoying. Someone pulls over to the side of the road for something minor, such as changing a flat tire, and, pretty soon, a long traffic jam occurs as drivers slow down to take a look.

What makes it so annoying is that the length of the traffic jam is greatly out of proportion to the minor event that precipitated it. Because some drivers hit their brakes in order to rubber-neck, the drivers behind them must also hit their brakes, those behind them must do the same, and so on. The accumulation of all the individual hitting of brakes eventually leads to a long, wasteful traffic jam as each driver slows down a little bit more than the driver in front of him or her. In other words, each person’s response leads to an amplified response by the next person.

Understanding a rubber-necking traffic jam gives us some insight into one very important way in which macroeconomics is different from microeconomics: many thousands or millions of individual actions compound upon one another to produce an outcome that isn’t simply the sum of those individual actions.

Consider, for example, what macroeconomists call the paradox of thrift: when families and businesses are worried about the possibility of economic hard times, they prepare by cutting their spending. This reduction in spending depresses the economy as consumers spend less and businesses react by laying off workers. As a result, families and businesses may end up worse off than if they hadn’t tried to act responsibly by cutting their spending.

This is a paradox because seemingly virtuous behavior—preparing for hard times by saving more—ends up harming everyone. And there is a flip-side to this story: when families and businesses are feeling optimistic about the future, they spend more today. This stimulates the economy, leading businesses to hire more workers, which further expands the economy. Seemingly profligate behavior leads to good times for all.

Or consider what happens when something causes the quantity of cash circulating through the economy to rise. An individual with more cash on hand is richer. But if everyone has more cash, the long-run effect is simply to push the overall level of prices higher, taking the purchasing power of the total amount of cash in circulation right back to where it was before.

A key insight of macroeconomics, then, is that the combined effect of individual decisions can have results that are very different from what any one individual intended, results that are sometimes perverse. The behavior of the macroeconomy is, indeed, greater than the sum of individual actions and market outcomes.