Macroeconomics, Global Edition, 7th edition

For intermediate courses in Economics.

A Unified View of the Latest Macroeconomic Events

In Macroeconomics, Blanchard presents a unified, global view of macroeconomics, enabling students to see the connections between goods markets, financial markets, and labor markets worldwide. Organized into two parts, the text contains a core section that focuses on short-, medium-, and long-run markets and three major extensions that offer more in-depth coverage of the issues at hand. From the major economic crisis and monetary policy in the United States, to the problems of the Euro area and growth in China, the text helps students make sense not only of current macroeconomic events but also of events that may unfold in the future. Integrated, detailed boxes in the Seventh Edition, Global Edition, have been updated to convey the life of macroeconomics today; reinforce lessons from the models; and help students employ and develop their analytical and evaluative skills.

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Students, if interested in purchasing this title with Pearson MyLab Economics, ask your instructor for the correct package ISBN and Course ID. Instructors, contact your Pearson representative for more information.

This title is a Pearson Global Edition. The Editorial team at Pearson has worked closely with educators around the world to include content, which is especially relevant to students outside the United States.

Hallmark Features

• Distinguished Authorship. Olivier Blanchard is one of Pearson’s most notable economics authors and brings his years of experience and research of macroeconomic issues, including time as the chief economist at the International Monetary Fund, to the text.
• Comprehensive coverage of current events. Current macroeconomic events (such as Changes in the U.S. Natural Rate of Unemployment since 1990) are integrated into each chapter of the book within the text and detailed boxes. Each box shows students how they can use what they’ve learned to get an understanding of economics in the real world.
• Implications of the Equilibrium Model. Blanchard offers a unique, underlying model that shows the implications of equilibrium in three sets of markets: the goods market, the financial market, and the labor market, helping students understand the impact of equilibrium.
• UPDATED! Figures and tables have been updated using the latest data available.
• Short, flexible chapters provide plenty of opportunity for alternative course organization.
• Margin notes create a dialogue with the reader, making the more difficult passages easier to comprehend, and giving a deeper understanding of the concepts and the results derived along the way.
• Short appendixes to some chapters expand on points made within the chapter for students who want to further explore macroeconomics.
• A Further Readings section, at the end of most chapters, indicates where to find more information. Each chapter ends with three ways of making sure that the material in the chapter has been digested:
  • A summary of the chapter’s main points.
  • A list of key terms.
  • A series of end-of-chapter exercises. “Quick Check” exercises are easy. “Dig Deeper” exercises are a bit harder, and “Explore Further” typically require either access to the Internet or the use of a spreadsheet program.
  • A list of symbols on the back endpapers makes it easy to recall the meaning of the symbols used in the text.

Content Changes by Chapter

• REVISED! Presentation of the IS-LM. The traditional treatment of monetary policy assumed that central banks chose the money supply and then let the interest rate adjust. Now however, central banks choose the interest rate and then let the money supply adjust. In terms of the IS-LM model used to describe the short run, the LM curve, instead of being upward sloping, should be treated as flat. This makes for a more realistic and a simpler model (Chapter 5).
• NEW! Focus on the role of the financial system in the economy. The text extends the IS-LM model to allow for two interest rates—the interest rate set by monetary policy and the cost of borrowing for people or firms, with the state of the financial system determining the relation between the two (Chapter 6).
• NEW! An IS-LM-PC (Phillips curve) model replaces the traditional aggregate supply and aggregate demand model, and gives a simpler and more accurate description of the role of monetary policy and of output and inflation dynamics (Chapter 9).
• NEW! Coverage of the constraints on monetary policy, coming from the zero lower bound, and the constraints on fiscal policy, coming from the high levels of public debt, has been added.
• NEW! and UPDATED! Focus boxes, include:
  • Unemployment and Happiness (Chapter 2)
  • The Liquidity Trap in Action (Chapter 4)
  • Bank

Hallmark Features

• UPDATED! Figures and tables have been updated using the latest data available.

Content Changes by Chapter

• REVISED! Presentation of the IS-LM. The traditional treatment of monetary policy assumed that central banks chose the money supply and then let the interest rate adjust. Now however, central banks choose the interest rate and then let the money supply adjust. In terms of the IS-LM model used to describe the short run, the LM curve, instead of being upward sloping, should be treated as flat. This makes for a more realistic and a simpler model (Chapter 5).
• Focus on the role of the financial system in the economy. The text extends the IS-LM model to allow for two interest rates—the interest rate set by monetary policy and the cost of borrowing for people or firms, with the state of the financial system determining the relation between the two (Chapter 6).
• An IS-LM-PC (Phillips curve) model replaces the traditional aggregate supply and aggregate demand model, and gives a simpler and more accurate description of the role of monetary policy and of output and inflation dynamics (Chapter 9).
• Coverage of the constraints on monetary policy, coming from the zero lower bound, and the constraints on fiscal policy, coming from the high levels of public debt, has been added.
• UPDATED! Focus boxes, include:
  • Unemployment and Happiness (Chapter 2)
  • The Liquidity Trap in Action (Chapter 4)
  • Bank Runs (Chapter 6)
  • Changes in the U.S. Natural Rate of Unemployment since 1990 (Chapter 8)
  • Okun’s Law, and Deflation in the Great Depression (Chapter 9)
  • The Construction of PPP Numbers (Chapter 10)
  • The Long View: Technology, Education, and Inequality (Chapter 13)
  • The Yield Curve, the Zero Lower Bound, and Lift-off (Chapter 14)
  • The Disappearance of Current Account Deficits in Euro Periphery Countries: Good News or Bad News? (Chapter 18)
  • Euro Area Fiscal Rules: A Short History (Chapter 21)
  • Money Financing and Hyperinflations, and Should You Worry about U.S. Public Debt (Chapter 22)

Also Available with Pearson MyLab Economics^®

Pearson MyLab Economics is an online homework, tutorial, and assessment program designed to work with this text to engage students and improve results. Within its structured environment, students practice what they learn, test their understanding, and pursue a personalized study plan that helps them better absorb course material and understand difficult concepts.

• UPDATED! Real-time Data Analysis Exercises. Easy to assign and automatically graded, Real-Time Data Analysis exercises use up-to-the-minute, real-time macroeconomic data. These exercises communicate directly with the Federal Reserve Bank of St. Louis’s FRED site, so every time FRED posts new data, students see new data. As a result, Real-Time Data Analysis exercises offer a no-fuss solution for instructors who want to make the most recent data a central part of their macro course. Real-Time Data Analysis exercises are available in the latest Principles of Economics (all versions), Intermediate Macroeconomics, and Money & Banking courses.