Macroeconomics, Global Edition

Book Preface

We love economics. We marvel at the way economic systems work. When we buy a smartphone, we think about the complex supply chain and the hundreds of thousands of people who played a role in producing an awe-inspiring piece of technology that was assembled from components manufactured across the globe.

The market’s ability to do the world’s work without anyone being in charge strikes us as a phenomenon no less profound than the existence of consciousness or life itself. We believe that the creation of the market system is one of the greatest achievements of humankind.

We wrote this book to highlight the simplicity of economic ideas and their extraordinary power to explain, predict, and improve what happens in the world. We want students to master the essential principles of economic analysis. With that goal in mind, we identify the three key ideas that lie at the heart of the economic approach to understanding human behavior: optimization, equilibrium, and empiricism. These abstract words represent three ideas that are actually highly intuitive.

Brief Contents:

PART I Introduction to Economics 34
Chapter 1 The Principles and Practice of Economics 34
Chapter 2 Economic Methods and Economic Questions 50
Chapter 3 Optimization: Doing the Best You Can 74
Chapter 4 Demand, Supply, and Equilibrium 92
PART II Introduction to Macroeconomics 118
Chapter 5 The Wealth of Nations: Defining and Measuring
Macroeconomic Aggregates 118
Chapter 6 Aggregate Incomes 146
PART III Long-Run Growth and Development 170
Chapter 7 Economic Growth 170
Chapter 8 Why Isn’t the Whole World Developed? 204
PART IV Equilibrium in the Macroeconomy 228
Chapter 9 Employment and Unemployment 228
Chapter 10 Credit Markets 252
Chapter 11 The Monetary System 274
PART V Short-Run Fluctuations
and Macroeconomic Policy 300
Chapter 12 Short-Run Fluctuations 300
Chapter 13 Countercyclical Macroeconomic Policy 330
PART VI Macroeconomics in a Global Economy 356
Chapter 14 Macroeconomics and International Trade 356
Chapter 15 Open Economy Macroeconomics 378