Guided tour of the book
List of case studies and boxes
Preface
Publisher’s acknowledgements
1 Macroeconomic essentials
1.1 The issues of macroeconomics
1.2 Essentials of macroeconomic accounting
1.3 Beyond accounting
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Appendix: Logarithms, growth rates and logarithmic scales
2 Booms and recessions (I): the Keynesian cross
2.1 The circular flow model revisited: terminologyand overview
2.2 Income determination: a first look
2.3 Income determination: a second look
2.4 An intertemporal view of consumption and investment
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
3 Money, interest rates and the global economy
3.1 The money market, the interest rate and the LM curve
3.2 Aggregate expenditure, the interest rate and the exchange rate: the IS curve 80
3.3 The IS-LM or the global-economy model
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
4 Exchange rates and the balance of payments
4.1 Globalization
4.2 The exchange rate and the balance of payments
4.3 Back to IS-LM: enter the FE curve
4.4 Equilibrium in all three markets
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
5 Booms and recessions (II): the national economy
5.1 Fiscal policy in the Mundell–Fleming model
5.2 Monetary policy in the Mundell–Fleming model
5.3 The algebra of monetary and fiscal policy in the Mundell–Fleming model
5.4 Comparative statics versus adjustment dynamics
5.5 Adjustment dynamics with expected depreciation
5.6 When prices move
5.7 Today’s exchange rate and the future
5.8 Speculative bubbles
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
6 Enter aggregate supply
6.1 Potential income and the labour market
6.2 Why is there unemployment in equilibrium?
6.3 Why may actual output deviate from potential output?
Chapter summary
Key terms and concepts
Exercises 185
Online resources
Recommended reading
Applied problems
7 Booms and recessions (III): aggregate supply and demand
7.1 The short-run aggregate supply curve
7.2 The aggregate demand curve
7.3 The AD-AS model: basics
7.4 Policy and shocks in the AD-AS model
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Appendix: The algebra of the AD curve
8 Booms and recessions (IV): dynamic aggregatesupply and demand
8.1 The aggregate supply curve in an inflation–incomediagram
8.2 Equilibrium income and inflation: the DAD curve
8.3 The DAD-SAS model 8.4 Inflation expectations
8.5 The DAD-SAS model at work
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Appendix: The algebra of the DAD curve
Appendix: The genesis of the DAD-SAS model Applied problems
9 Economic growth (I): basics
9.1 Stylized facts of income and growth
9.2 The production function and growth accounting
9.3 Growth theory: the Solow model
9.4 Why incomes may differ
9.5 What about consumption?
9.6 Population growth and technological progress
9.7 Empirical merits and deficiencies of the
Solow model
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
10 Economic growth (II): advanced issues
10.1 The government in the Solow model
10.2 Economic growth and capital markets
10.3 Extending the Solow model and moving beyond
10.4 Poverty traps in the Solow model
10.5 Human capital
10.6 Endogenous growth
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Appendix: A synthesis of the DAD-SAS and the Solow model
Applied problems
11 Endogenous economic policy
11.1 What do politicians want?
11.2 Political business cycles
11.3 Rational expectations
11.4 Policy games
11.5 Ways out of the time inconsistency trap
Chapter summary
Key terms and concepts
Exercises
Online resources Recommended reading Applied problems
12 The European Monetary System and the Eurozone at work
12.1 Preliminaries
12.2 The 1992 EMS crisis
12.3 Exchange rate target zones
12.4 Speculative attacks
12.5 Monetary and fiscal policy in the euro area
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Appendix: The two-country Mundell–Fleming model
Applied problems
13 Inflation and central bank independence
13.1 Inflation, central bank independence and the EMS
13.2 Supply shocks and central bank independence
13.3 D isinflations and the sacrifice ratio
13.4 Lessons for European Monetary Union
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
14 Budget deficits and public debt
14.1 The government budget
14.2 The dynamics of budget deficits and the public debt
14.3 What is wrong with having deficits and debt?
14.4 D oes monetary union need budget rules?
14.5 Government debt and the financial markets
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
15 A closer look at economic crises
15.1 Linking unemployment and growth
15.2 The price of oil (and other raw materials)
15.3 Persistence in the DAD-SAS model
15.4 Financial crises and risk premiums: a closer look
15.5 Quantitative easing: unorthodox monetary policy
15.6 From financial crises to debt crises and austerity
15.7 Lessons learned
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Applied problems
16 Sticky prices and sticky information:new perspectives on booms and recessions (I)
16.1 Reality check: business cycle patterns and the DAD-SAS model
16.2 New Keynesian responses
16.3 The Phillips curves and monetary policy rules of current research
16.4 Supply shocks in the DAD-SAS model
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
17 Real business cycles: new perspectives on booms and recessions (II)
17.1 Real business cycle philosophy
17.2 A real business cycle model
17.3 A graphical real business cycle
Chapter summary
Key terms and concepts
Exercises
Online resources
Recommended reading
Appendix A: A primer in econometrics
A.1 First task: estimating unknown parameters
A.2 Second task: testing hypotheses
A.3 A closer look at oLS estimation
Appendix summary
Key terms and concepts
Exercises
Recommended reading
Appendix B: Glossary
Online resources
Appendix C: Economics Nobel Prize winners and earlier giants
Online resources
Index
