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Macroeconomics

by: Mankiw

Macroeconomics

by: Mankiw

ISBN 13:
9780716762133
ISBN 10:
0716762137
Edition: 6th
Format: Hardcover
Copyright: 05/12/2006
Publisher: Worth Publishers
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Summary

This guide offers various ways for students to learn the material in the new edition and assess their understanding

Preface

xxv

part I Introduction

The Science of Macroeconomics

(14)

What Macroeconomists Study

(4)

The Historical Performance of the U.S. Economy

(3)

How Economists Think

(8)

Theory as Model Building

(4)

FYI Using Functions to Express Relationships Among Variables

(1)

A Multitude of Models

(1)

Prices: Flexible Versus Sticky

(1)

Microeconomic Thinking and Macroeconomic Models

(1)

FYI Nobel Macroeconomists

(1)

How This Book Proceeds

(2)

The Data of Macroeconomics

(28)

Measuring the Value of Economic Activity: Gross Domestic Product

(13)

Income, Expenditure, and the Circular Flow

(2)

FYI Stocks and Flows

(1)

Rules for Computing GDP

(1)

Adding Apples and Oranges

(1)

Used Goods

(1)

The Treatment of Inventories

(1)

Intermediate Goods and Value Added

(1)

Housing Services and Other Imputations

(1)

Real GDP versus Nominal GDP

(1)

The GDP Deflator

(1)

Chain-Weighted Measures of Real GDP

(1)

FYI Two Arithmetic Tricks for Working With Percentage Changes

(1)

The Components of Expenditure

(1)

FYI What Is Investment?

(1)

GDP and Its Components

(1)

Other Measures of Income

(2)

Seasonal Adjustment

(1)

Measuring the Cost of Living: The Consumer Price Index

(4)

The Price of a Basket of Goods

(1)

The CPI versus the GDP Deflator

(2)

Does the CPI Overstate Inflation?

(1)

Measuring Joblessness: The Unemployment Rate

(5)

The Household Survey

(1)

Trends in Labor-Force Participation

(2)

The Establishment Survey

(1)

Conclusion: From Economic Statistics to Economic Models

(5)

part II Classical Theory: The Economy in the Long Run

National Income: Where It Comes From and Where It Goes

(32)

What Determines the Total Production of Goods and Services?

(2)

The Factors of Production

(1)

The Production Function

(1)

The Supply of Goods and Services

(1)

How Is National Income Distributed to the Factors of Production?

(11)

Factor Prices

(1)

The Decisions Facing the Competitive Firm

(1)

The Firm's Demand for Factors

(1)

The Marginal Product of Labor

(1)

From the Marginal Product of Labor to Labor Demand

(2)

The Marginal Product of Capital and Capital Demand

(1)

The Division of National Income

(1)

The Black Death and Factor Prices

(1)

The Cobb-Douglas Production Function

(3)

Labor Productivity as the Key Determinant of Real Wages

(1)

What Determines the Demand for Goods and Services?

(4)

Consumption

(2)

Investment

(1)

Government Purchases

(1)

FYI The Many Different Interest Rates

(1)

What Brings the Supply and Demand for Goods and Services Into Equilibrium?

(8)

Equilibrium in the Market for Goods and Services: The Supply and Demand for the Economy's Output

(1)

Equilibrium in the Financial Markets: The Supply and Demand for Loanable Funds

(2)

Changes in Saving: The Effects of Fiscal Policy

(1)

An Increase in Government Purchases

(1)

Wars and Interest Rates in the United Kingdom, 1730--1920

(1)

A Decrease in Taxes

(1)

Changes in Investment Demand

(2)

Conclusion

(5)

Money and Inflation

(39)

What Is Money?

(6)

The Functions of Money

(1)

The Types of Money

(1)

Money in a POW Camp

(1)

How Fiat Money Evolves

(1)

Money and Social Conventions on the Island of Yap

(1)

How the Quantity of Money Is Controlled

(1)

How the Quantity of Money Is Measured

(2)

FYI How Do Credit Cards and Debit Cards Fit into the Monetary System?

(1)

The Quantity Theory of Money

(6)

Transactions and the Quantity Equation

(1)

From Transactions to Income

(1)

The Money Demand Function and the Quantity Equation

(1)

The Assumption of Constant Velocity

(1)

Money, Prices, and Inflation

(1)

Inflation and Money Growth

(2)

Seigniorage: The Revenue From Printing Money

(2)

Paying for the American Revolution

(1)

Inflation and Interest Rates

(4)

Two Interest Rates: Real and Nominal

(1)

The Fisher Effect

(1)

Inflation and Nominal Interest Rates

(2)

Two Real Interest Rates: Ex Ante and Ex Post

(1)

Nominal Interest Rates in the Nineteenth Century

(1)

The Nominal Interest Rate and the Demand for Money

(2)

The Cost of Holding Money

(1)

Future Money and Current Prices

(1)

The Social Costs of Inflation

(6)

The Layman's View and the Classical Response

(1)

What Economists and the Public Say About Inflation

(1)

The Costs of Expected Inflation

(1)

The Costs of Unexpected Inflation

100

(1)

The Free Silver Movement, the Election of 1896, and the Wizard of Oz

101

(1)

One Benefit of Inflation

102

(1)

Hyperinflation

103

(5)

The Costs of Hyperinflation

103

(1)

Life During the Bolivian Hyperinflation

104

(1)

The Causes of Hyperinflation

105

(1)

Hyperinflation in Interwar Germany

106

(2)

Conclusion: The Classical Dichotomy

108

(7)

Appendix: The Cagan Model: How Current and Future Money Affect the Price Level

112

(3)

The Open Economy

115

(44)

The International Flows of Capital and Goods

116

(5)

The Role of Net Exports

116

(2)

International Capital Flows and the Trade Balance

118

(2)

International Flows of Goods and Capital: An Example

120

(1)

FYI The Irrelevance of Bilateral Trade Balances

120

(1)

Saving and Investment in a Small Open Economy

121

(10)

Capital Mobility and the World Interest Rate

121

(1)

Why Assume a Small Open Economy?

122

(1)

The Model

123

(1)

How Policies Influence the Trade Balance

124

(1)

Fiscal Policy at Home

124

(1)

Fiscal Policy Abroad

125

(1)

Shifts in Investment Demand

126

(1)

Evaluating Economic Policy

127

(1)

The U.S. Trade Deficit

127

(3)

Why Doesn't Capital Flow to Poor Countries?

130

(1)

Exchange Rates

131

(14)

Nominal and Real Exchange Rates

131

(1)

The Nominal Exchange Rate

131

(1)

FYI How Newspapers Report the Exchange Rate

132

(1)

The Real Exchange Rate

133

(1)

The Real Exchange Rate and the Trade Balance

134

(1)

The Determinants of the Real Exchange Rate

135

(1)

How Policies Influence the Real Exchange Rate

136

(1)

Fiscal Policy at Home

136

(1)

Fiscal Policy Abroad

136

(1)

Shifts in Investment Demand

137

(1)

The Effects of Trade Policies

138

(1)

The Determinants of the Nominal Exchange Rate

139

(1)

Inflation and Nominal Exchange Rates

140

(1)

The Special Case of Purchasing-Power Parity

141

(2)

The Big Mac Around the World

143

(2)

Conclusion: The United States as a Large Open Economy

145

(14)

Appendix: The Large Open Economy

149

(1)

Net Capital Outflow

149

(2)

The Model

151

(1)

The Market for Loanable Funds

151

(1)

The Market for Foreign Exchange

152

(1)

Policies in the Large Open Economy

153

(1)

Fiscal Policy at Home

153

(2)

Shifts in Investment Demand

155

(1)

Trade Policies

155

(1)

Shifts in Net Capital Outflow

156

(1)

Conclusion

157

(2)

Unemployment

159

(27)

Job Loss, Job Finding, and the Natural Rate of Unemployment

160

(2)

Job Search and Frictional Unemployment

162

(3)

Public Policy and Frictional Unemployment

163

(1)

Unemployment Insurance and the Rate of Job Finding

164

(1)

Real-Wage Rigidity and Structural Unemployment

165

(7)

Minimum-Wage Laws

166

(1)

The Characteristics of Minimum-Wage Workers

167

(1)

Unions and Collective Bargaining

168

(2)

Efficiency Wages

170

(1)

Henry Ford's $5 Workday

171

(1)

Labor Market Experience: The United States

172

(4)

The Duration of Unemployment

172

(1)

Variation in the Unemployment Rate Across Demographic Groups

173

(1)

Trends in Unemployment

174

(1)

Demographics

174

(1)

Sectoral Shifts

174

(1)

Productivity

174

(1)

Transitions Into and Out of the Labor Force

175

(1)

Labor Market Experience: Europe

176

(6)

The Rise in European Unemployment

176

(2)

Unemployment Variation within Europe

178

(1)

The Secrets to Happiness

179

(1)

The Rise of European Leisure

180

(2)

Conclusion

182

(4)

part III Growth Theory: The Economy in the Very Long Run

Economic Growth I: Capital Accumulation and Population Growth

186

(30)

The Accumulation of Capital

187

(11)

The Supply and Demand for Goods

187

(1)

The Supply of Goods and the Production Function

188

(1)

The Demand for Goods and the Consumption Function

188

(2)

Growth in the Capital Stock and the Steady State

190

(2)

Approaching the Steady State: A Numerical Example

192

(2)

The Miracle of Japanese and German Growth

194

(1)

How Saving Affects Growth

195

(1)

Saving and Investment Around the World

196

(2)

The Golden Rule Level of Capital

198

(8)

Comparing Steady States

198

(4)

Finding the Golden Rule Steady State: A Numerical Example

202

(1)

The Transition to the Golden Rule Steady State

203

(1)

Starting With Too Much Capital

204

(1)

Starting With Too Little Capital

205

(1)

Population Growth

206

(6)

The Steady State With Population Growth

206

(2)

The Effects of Population Growth

208

(1)

Population Growth Around the World

209

(1)

Alternative Perspectives on Population Growth

210

(1)

The Malthusian Model

211

(1)

The Kremerian Model

211

(1)

Conclusion

212

(4)

Economic Growth II: Technology, Empirics, and Policy

216

(36)

Technological Progress in the Solow Model

217

(3)

The Efficiency of Labor

217

(1)

The Steady State With Technological Progress

218

(1)

The Effects of Technological Progress

219

(1)

From Growth Theory to Growth Empirics

220

(4)

Balanced Growth

220

(1)

Convergence

221

(1)

Factor Accumulation Versus Production Efficiency

222

(1)

Is Free Trade Good for Economic Growth?

223

(1)

Policies to Promote Growth

224

(11)

Evaluating the Rate of Saving

225

(1)

Changing the Rate of Saving

226

(1)

Allocating the Economy's Investment

227

(2)

Establishing the Right Institutions

229

(1)

The Colonial Origins of Modern Institutions

229

(1)

Encouraging Technological Progress

230

(1)

The Worldwide Slowdown in Economic Growth: 1972--1995

231

(1)

Measurement Problems

232

(1)

Oil Prices

232

(1)

Worker Quality

232

(1)

The Depletion of Ideas

233

(1)

Information Technology and the New Economy: 1995--????

233

(2)

Beyond the Solow Model: Endogenous Growth Theory

235

(5)

The Basic Model

235

(1)

A Two-Sector Model

236

(1)

The Microeconomics of Research and Development

237

(2)

Economic Growth as a Process of Creative Destruction

239

(1)

Conclusion

240

(12)

Appendix: Accounting for the Sources of Economic Growth

244

(1)

Increases in the Factors of Production

244

(1)

Increases in Capital

245

(1)

Increases in Labor

245

(1)

Increases in Capital and Labor

245

(1)

Technological Progress

246

(2)

The Sources of Growth in the United States

248

(1)

Growth in the East Asian Tigers

248

(4)

part IV Business Cycle Theory: The Economy in the Short Run

Introduction to Economic Fluctuations

252

(26)

The Facts about the Business Cycle

253

(6)

GDP and Its Components

253

(2)

Unemployment and Okun's Law

255

(3)

Leading Economic Indicators

258

(1)

Time Horizons in Macroeconomics

259

(3)

How the Short Run and Long Run Differ

260

(1)

The Puzzle of Sticky Magazine Prices

260

(1)

The Model of Aggregate Supply and Aggregate Demand

261

(1)

Aggregate Demand

262

(3)

The Quantity Equation as Aggregate Demand

263

(1)

Why the Aggregate Demand Curve Slopes Downward

264

(1)

Shifts in the Aggregate Demand Curve

264

(1)

Aggregate Supply

265

(5)

The Long Run: The Vertical Aggregate Supply Curve

265

(2)

The Short Run: The Horizontal Aggregate Supply Curve

267

(1)

From the Short Run to the Long Run

268

(2)

Gold, Greenbacks, and the Contraction of the 1870s

270

(1)

Stabilization Policy

270

(6)

Shocks to Aggregate Demand

271

(1)

Shocks to Aggregate Supply

272

(2)

How OPEC Helped Cause Stagflation in the 1970s and Euphoria in the 1980s

274

(2)

Conclusion

276

(2)

Aggregate Demand I: Building the IS-LM Model

278

(25)

The Goods Market and the IS Curve

280

(12)

The Keynesian Cross

280

(1)

Planned Expenditure

280

(2)

The Economy in Equilibrium

282

(1)

Fiscal Policy and the Multiplier: Government Purchases

283

(2)

Fiscal Policy and the Multiplier: Taxes

285

(2)

Cutting Taxes to Stimulate the Economy: The Kennedy and Bush Tax Cuts

287

(1)

The Interest Rate, Investment, and the IS Curve

288

(1)

How Fiscal Policy Shifts the IS Curve

289

(1)

A Loanable-Funds Interpretation of the IS Curve

290

(2)

The Money Market and the LM Curve

292

(7)

The Theory of Liquidity Preference

292

(3)

Does a Monetary Tightening Raise or Lower Interest Rates?

295

(1)

Income, Money Demand, and the LM Curve

295

(2)

How Monetary Policy Shifts the LM Curve

297

(1)

A Quantity-Equation Interpretation of the LM Curve

298

(1)

Conclusion: The Short-Run Equilibrium

299

(4)

Aggregate Demand II: Applying the IS-LM Model

303

(31)

Explaining Fluctuations With the IS-LM Model

304

(9)

How Fiscal Policy Shifts the IS Curve and Changes the Short-Run Equilibrium

304

(1)

Changes in Government Purchases

304

(1)

Changes in Taxes

305

(1)

How Monetary Policy Shifts the LM Curve and Changes the Short-Run Equilibrium

306

(1)

The Interaction Between Monetary and Fiscal Policy

307

(2)

Policy Analysis With Macroeconometric Models

309

(1)

Shocks in the IS-LM Model

310

(1)

The U.S. Recession of 2001

311

(1)

What Is the Fed's Policy Instrument--The Money Supply or the Interest Rate?

312

(1)

IS-LM as a Theory of Aggregate Demand

313

(4)

From the IS-LM Model to the Aggregate Demand Curve

313

(2)

The IS-LM Model in the Short Run and Long Run

315

(2)

The Great Depression

317

(9)

The Spending Hypothesis: Shocks to the IS Curve

318

(2)

The Money Hypothesis: A Shock to the LM Curve

320

(1)

The Money Hypothesis Again: The Effects of Falling Prices

321

(1)

The Stabilizing Effects of Deflation

321

(1)

The Destabilizing Effects of Deflation

321

(2)

Could the Depression Happen Again?

323

(1)

The Japanese Slump of the 1990s

324

(1)

FYI The Liquidity Trap

325

(1)

Conclusion

326

(8)

Appendix: The Simple Algebra of the IS-LM Model and the Aggregate Demand Curve

329

(1)

The IS Curve

329

(1)

The LM Curve

330

(1)

The Aggregate Demand Curve

331

(1)

The Effectiveness of Monetary and Fiscal Policy

332

(2)

The Open Economy Revisited: The Mundell-Fleming Model and the Exchange-Rate Regime

334

(39)

The Mundell-Fleming Model

335

(5)

The Key Assumption: Small Open Economy With Perfect Capital Mobility

336

(1)

The Goods Market and the IS* Curve

336

(2)

The Money Market and the LM* Curve

338

(1)

Putting the Pieces Together

338

(2)

The Small Open Economy Under Floating Exchange Rates

340

(4)

Fiscal Policy

340

(2)

Monetary Policy

342

(1)

Trade Policy

343

(1)

The Small Open Economy Under Fixed Exchange Rates

344

(7)

How a Fixed-Exchange-Rate System Works

345

(1)

The International Gold Standard

346

(1)

Fiscal Policy

347

(1)

Monetary Policy

348

(1)

Devaluation and the Recovery From the Great Depression

349

(1)

Trade Policy

349

(1)

Policy in the Mundell-Fleming Model: A Summary

350

(1)

Interest-Rate Differentials

351

(5)

Country Risk and Exchange-Rate Expectations

351

(1)

Differentials in the Mundell-Fleming Model

352

(1)

International Financial Crisis: Mexico 1994--1995

353

(2)

International Financial Crisis: Asia 1997--1998

355

(1)

Should Exchange Rates Be Floating or Fixed?

356

(5)

Pros and Cons of Different Exchange-Rate Systems

356

(1)

Monetary Union in the United States and Europe

357

(1)

Speculative Attacks, Currency Boards, and Dollarization

358

(1)

The Impossible Trinity

359

(1)

The Chinese Currency Controversy

360

(1)

From the Short Run to the Long Run: The Mundell-Fleming Model With a Changing Price Level

361

(3)

A Concluding Reminder

364

(9)

Appendix: A Short-Run Model of the Large Open Economy

368

(1)

Fiscal Policy

369

(2)

Monetary Policy

371

(1)

A Rule of Thumb

372

(1)

Aggregate Supply and the Short-run Tradeoff Between Inflation and Unemployment

373

(33)

Three Models of Aggregate Supply

374

(11)

The Sticky-Price Model

375

(2)

The Sticky-Wage Model

377

(2)

The Cyclical Behavior of the Real Wage

379

(1)

The Imperfect-Information Model

380

(2)

International Differences in the Aggregate Supply Curve

382

(1)

Summary and Implications

383

(2)

Inflation, Unemployment, and the Phillips Curve

385

(12)

Deriving the Phillips Curve From the Aggregate Supply Curve

385

(2)

FYI The History of the Modern Phillips Curve

387

(1)

Adaptive Expectations and Inflation Inertia

387

(1)

Two Causes of Rising and Falling Inflation

388

(1)

Inflation and Unemployment in the United States

389

(1)

The Short-Run Tradeoff Between Inflation and Unemployment

390

(2)

FYI How Precise Are Estimates of the Natural Rate of Unemployment?

392

(1)

Disinflation and the Sacrifice Ratio

392

(1)

Rational Expectations and the Possibility of Painless Disinflation

393

(2)

The Sacrifice Ratio in Practice

395

(1)

Hysteresis and the Challenge to the Natural-Rate Hypothesis

396

(1)

Conclusion

397

(9)

Appendix: A Big, Comprehensive Model

401

(1)

Special Case 1: The Classical Closed Economy

401

(1)

Special Case 2: The Classical Small Open Economy

402

(1)

Special Case 3: The Basic Model of Aggregate Demand and Aggregate Supply

402

(1)

Special Case 4: The IS-LM Model

402

(1)

Special Case 5: The Mundell-Fleming Model With a Floating Exchange Rate

402

(1)

Special Case 6: The Mundell-Fleming Model With a Fixed Exchange Rate

402

(4)

part V Macroeconomic Policy Debates

Stabilization Policy

406

(25)

Should Policy Be Active or Passive?

407

(8)

Lags in the Implementation and Effects of Policies

407

(2)

The Difficult Job of Economic Forecasting

409

(1)

Mistakes in Forecasting

409

(2)

Ignorance, Expectations, and the Lucas Critique

411

(1)

The Historical Record

412

(1)

Is the Stabilization of the Economy a Figment of the Data?

413

(1)

The Remarkable Stability of the Modern Economy

413

(2)

Should Policy Be Conducted by Rule or by Discretion?

415

(10)

Distrust of Policymakers and the Political Process

416

(1)

The Time Inconsistency of Discretionary Policy

416

(2)

Alexander Hamilton Versus Time Inconsistency

418

(1)

Rules for Monetary Policy

419

(1)

Inflation Targeting: Rule or Constrained Discretion?

420

(1)

John Taylor's Rule for Monetary Policy

421

(2)

Central-Bank Independence

423

(2)

Conclusion: Making Policy in an Uncertain World

425

(6)

Appendix: Time Inconsistency and the Tradeoff Between Inflation and Unemployment

428

(3)

Government Debt

431

(25)

The Size of the Government Debt

432

(3)

The Troubling Outlook for Fiscal Policy

434

(1)

Problems in Measurement

435

(4)

Measurement Problem 1: Inflation

435

(1)

Measurement Problem 2: Capital Assets

436

(1)

Measurement Problem 3: Uncounted Liabilities

437

(1)

Measurement Problem 4: The Business Cycle

438

(1)

Summing Up

438

(1)

The Traditional View of Government Debt

439

(2)

FYI Taxes and Incentives

440

(1)

The Ricardian View of Government Debt

441

(7)

The Basic Logic of Ricardian Equivalence

442

(1)

Consumers and Future Taxes

443

(1)

Myopia

443

(1)

Borrowing Constraints

443

(1)

George Bush's Withholding Experiment

444

(1)

Future Generations

444

(2)

Why Do Parents Leave Bequests?

446

(1)

Making a Choice

446

(1)

FYI Ricardo on Ricardian Equivalence

447

(1)

Other Perspectives on Government Debt

448

(4)

Balanced Budgets Versus Optimal Fiscal Policy

448

(1)

Stabilization

448

(1)

Tax Smoothing

448

(1)

Intergenerational Redistribution

448

(1)

Fiscal Effects on Monetary Policy

449

(1)

Debt and the Political Process

449

(1)

International Dimensions

450

(1)

The Benefits of Indexed Bonds

451

(1)

Conclusion

452

(4)

part VI More on the Microeconomics Behind Macroeconomics

Consumption

456

(31)

John Maynard Keynes and the Consumption Function

457

(4)

Keynes's Conjectures

457

(1)

The Early Empirical Successes

458

(1)

Secular Stagnation, Simon Kuznets, and the Consumption Puzzle

459

(2)

Irving Fisher and Intertemporal Choice

461

(10)

The Intertemporal Budget Constraint

461

(2)

FYI Present Value, or Why a $1,000,000 Prize Is Worth Only $623,000

463

(1)

Consumer Preferences

464

(1)

Optimization

465

(1)

How Changes in Income Affect Consumption

466

(1)

How Changes in the Real Interest Rate Affect Consumption

467

(1)

Constraints on Borrowing

468

(2)

The High Japanese Saving Rate

470

(1)

Franco Modigliani and the Life-Cycle Hypothesis

471

(5)

The Hypothesis

472

(1)

Implications

472

(3)

The Consumption and Saving of the Elderly

475

(1)

Milton Friedman and the Permanent-Income Hypothesis

476

(2)

The Hypothesis

476

(1)

Implications

477

(1)

The 1964 Tax Cut and the 1968 Tax Surcharge

478

(1)

Robert Hall and the Random-Walk Hypothesis

478

(3)

The Hypothesis

479

(1)

Implications

479

(1)

Do Predictable Changes in Income Lead to Predictable Changes in Consumption?

480

(1)

David Laibson and the Pull of Instant Gratification

481

(2)

How to Get People to Save More

482

(1)

Conclusion

483

(4)

Investment

487

(23)

Business Fixed Investment

488

(13)

The Rental Price of Capital

489

(1)

The Cost of Capital

490

(2)

The Determinants of Investment

492

(2)

Taxes and Investment

494

(1)

The Stock Market and Tobin's q

495

(1)

The Stock Market as an Economic Indicator

496

(1)

Alternative Views of the Stock Market: The Efficient Markets Hypothesis Versus Keynes's Beauty Contest

497

(2)

Financing Constraints

499

(1)

Banking Crises and Credit Crunches

500

(1)

Residential Investment

501

(3)

The Stock Equilibrium and the Flow Supply

501

(1)

Changes in Housing Demand

502

(1)

FYI What Price House Can You Afford?

503

(1)

The Tax Treatment of Housing

504

(1)

Inventory Investment

504

(3)

Reasons for Holding Inventories

504

(1)

The Accelerator Model of Inventories

505

(2)

Inventories and the Real Interest Rate

507

(1)

Conclusion

507

(3)

Money Supply and Money Demand

510

(18)

Money Supply

510

(8)

100-Percent-Reserve Banking

511

(1)

Fractional-Reserve Banking

512

(2)

A Model of the Money Supply

514

(1)

The Three Instruments of Monetary Policy

515

(1)

Bank Failures and the Money Supply in the 1930s

516

(2)

Money Demand

518

(7)

Portfolio Theories of Money Demand

518

(1)

Currency and the Underground Economy

519

(1)

Transactions Theories of Money Demand

520

(1)

The Baumol-Tobin Model of Cash Management

520

(3)

Empirical Studies of Money Demand

523

(1)

Financial Innovation, Near Money, and the Demise of the Monetary Aggregates

524

(1)

Conclusion

525

(3)

Advances in Business Cycle Theory

528

(19)

The Theory of Real Business Cycles

529

(8)

The Economics of Robinson Crusoe

529

(2)

The Interpretation of the Labor Market

531

(1)

Looking for Intertemporal Substitution

532

(1)

The Importance of Technology Shocks

533

(1)

The Solow Residual and the Business Cycle

534

(1)

The Neutrality of Money

535

(1)

Testing for Monetary Neutrality

536

(1)

The Flexibility of Wages and Prices

537

(1)

New Keynesian Economics

537

(7)

Small Menu Costs and Aggregate-Demand Externalities

538

(1)

How Large Are Menu Costs?

539

(1)

Recessions as Coordination Failure

539

(2)

The Staggering of Wages and Prices

541

(1)

If You Want to Know Why Firms Have Sticky Prices, Ask Them

542

(2)

Conclusion

544

(3)

Epilogue: What We Know, What WeDon't

547

(8)

The Four Most Important Lessons of Macroeconomics

547

(3)

Lesson 1: In the long run, a country's capacity to produce goods and services determines the standard of living of its citizens.

548

(1)

Lesson 2: In the short run, aggregate demand influences the amount of goods and services that a country produces.

548

(1)

Lesson 3: In the long run, the rate of money growth determines the rate of inflation, but it does not affect the rate of unemployment.

549

(1)

Lesson 4: In the short run, policymakers who control monetary and fiscal policy face a tradeoff between inflation and unemployment.

549

(1)

The Four Most Important Unresolved Questions of Macroeconomics

550

(4)

Question 1: How should policymakers try to promote growth in the economy's natural level of output?

550

(1)

Question 2: Should policymakers try to stabilize the economy?

551

(1)

Question 3: How costly is inflation, and how costly is reducing inflation?

552

(1)

Question 4: How big a problem are government budget deficits?

553

(1)

Conclusion

554

(1)

Glossary

555

(10)

Index

565

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Macroeconomics

Macroeconomics

9780716762133

0716762137

Summary

Table of Contents

Supplemental Materials

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Amazon no longer offers textbook rentals. We do!

Macroeconomics

Macroeconomics

9780716762133

0716762137

Summary

Table of Contents

Supplemental Materials

Write a Review

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