Macroeconomics: Policy and Practice, 2nd edition

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Cover Title Page Copyright Page Acknowledgments About the Author Contents Preface PART 1 Introduction Chapter 1 THE POLICY AND PRACTICE OF MACROECONOMICS PREVIEW THE PRACTICE OF MACROECONOMICS MACROECONOMIC POLICY HOW WE WILL STUDY MACROECONOMICS SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 2 MEASURING MACROECONOMIC DATA PREVIEW MEASURING ECONOMIC ACTIVITY: NATIONAL INCOME ACCOUNTING MEASURING GDP: THE PRODUCTION APPROACH MEASURING GDP: THE EXPENDITURE APPROACH MEASURING GDP: THE INCOME APPROACH REAL VERSUS NOMINAL GDP MEASURING INFLATION MEASURING UNEMPLOYMENT MEASURING INTEREST RATES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS PART 2 Macroeconomic Basics Chapter 3 AGGREGATE PRODUCTION AND PRODUCTIVITY PREVIEW DETERMINANTS OF AGGREGATE PRODUCTION DETERMINATION OF FACTOR PRICES DISTRIBUTION OF NATIONAL INCOME SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 4 SAVING AND INVESTMENT IN CLOSED AND OPEN ECONOMIES PREVIEW RELATIONSHIP BETWEEN SAVING AND WEALTH SAVING, INVESTMENT, AND GOODS MARKET EQUILIBRIUM IN A CLOSED ECONOMY RESPONSE TO CHANGES IN SAVING AND INVESTMENT IN A CLOSED ECONOMY SAVING, INVESTMENT, AND GOODS MARKET EQUILIBRIUM IN AN OPEN ECONOMY SAVING, INVESTMENT, AND THE TRADE BALANCE IN A SMALL OPEN ECONOMY RESPONSE TO CHANGES IN SAVING AND INVESTMENT IN A SMALL OPEN ECONOMY LARGE VERSUS SMALL OPEN ECONOMIES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 5 MONEY AND INFLATION PREVIEW WHAT IS MONEY? THE FEDERAL RESERVE SYSTEM AND THE CONTROL OF THE MONEY SUPPLY MEASURING MONEY QUANTITY THEORY OF MONEY HYPERINFLATION INFLATION AND INTEREST RATES THE COST OF INFLATION SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 5 Appendix THE MONEY SUPPLY PROCESS THE FED’S BALANCE SHEET CONTROL OF THE MONETARY BASE MULTIPLE DEPOSIT CREATION: A SIMPLE MODEL FACTORS THAT DETERMINE THE MONEY SUPPLY THE MONEY MULTIPLIER SUMMARY KEY TERMS REVIEW QUESTIONS AND PROBLEMS DATA ANALYSIS PROBLEMS PART 3 Long-Run Economic Growth Chapter 6 THE SOURCES OF GROWTH AND THE SOLOW MODEL PREVIEW ECONOMIC GROWTH AROUND THE WORLD THE SOLOW GROWTH MODEL SAVING RATE CHANGES IN THE SOLOW MODEL POPULATION GROWTH IN THE SOLOW MODEL PRODUCTIVITY GROWTH IN THE SOLOW MODEL SUMMING UP THE SOLOW MODEL SOURCES OF ECONOMIC GROWTH: GROWTH ACCOUNTING CROSS-COUNTRY DIFFERENCES IN GROWTH ACCOUNTING RATES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 6 Appendix THE ALGEBRA OF THE SOLOW GROWTH MODEL SOLVING FOR THE STEADY STATE SUMMARY AND RESULTS REVIEW QUESTIONS AND PROBLEMS Chapter 7 DRIVERS OF GROWTH: TECHNOLOGY, POLICY, AND INSTITUTIONS PREVIEW TECHNOLOGY AS A PRODUCTION INPUT POLICIES TO PROMOTE PRODUCTIVITY INSTITUTIONS AND PROPERTY RIGHTS ENDOGENOUS GROWTH THEORY FACTORS THAT AFFECT ENDOGENOUS GROWTH SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS PART 4 Business Cycles: The Short Run Chapter 8 BUSINESS CYCLES: AN INTRODUCTION PREVIEW BUSINESS CYCLE BASICS MACROECONOMIC VARIABLES AND THE BUSINESS CYCLE A BRIEF HISTORY OF U.S. BUSINESS CYCLES TIME HORIZONS IN MACROECONOMICS PRICE STICKINESS ROAD MAP FOR OUR STUDY OF BUSINESS CYCLES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 9 THE IS CURVE PREVIEW PLANNED EXPENDITURE THE COMPONENTS OF EXPENDITURE GOODS MARKET EQUILIBRIUM UNDERSTANDING THE IS CURVE FACTORS THAT SHIFT THE IS CURVE SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 10 MONETARY POLICY AND AGGREGATE DEMAND PREVIEW THE FEDERAL RESERVE AND MONETARY POLICY THE MONETARY POLICY CURVE THE AGGREGATE DEMAND CURVE THE MONEY MARKET AND INTEREST RATES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 10 Appendix THE DEMAND FOR MONEY KEYNESIAN THEORIES OF MONEY DEMAND PORTFOLIO THEORIES OF MONEY DEMAND EMPIRICAL EVIDENCE ON THE DEMAND FOR MONEY SUMMARY KEY TERMS REVIEW QUESTIONS AND PROBLEMS Chapter 11 AGGREGATE SUPPLY AND THE PHILLIPS CURVE PREVIEW THE PHILLIPS CURVE THE AGGREGATE SUPPLY CURVE SHIFTS IN AGGREGATE SUPPLY CURVES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 12 THE AGGREGATE DEMAND AND SUPPLY MODEL PREVIEW RECAP OF THE AGGREGATE DEMAND AND SUPPLY CURVES EQUILIBRIUM IN AGGREGATE DEMAND AND SUPPLY ANALYSIS CHANGES IN EQUILIBRIUM: AGGREGATE DEMAND SHOCKS CHANGES IN EQUILIBRIUM: AGGREGATE SUPPLY (PRICE) SHOCKS AD/AS ANALYSIS OF FOREIGN BUSINESS CYCLE EPISODES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 13 MACROECONOMIC POLICY AND AGGREGATE DEMAND AND SUPPLY ANALYSIS PREVIEW THE OBJECTIVES OF MACROECONOMIC POLICY THE RELATIONSHIP BETWEEN STABILIZING INFLATION AND STABILIZING ECONOMIC ACTIVITY HOW ACTIVELY SHOULD POLICY MAKERS TRY TO STABILIZE ECONOMIC ACTIVITY? THE TAYLOR RULE INFLATION: ALWAYS AND EVERYWHERE A MONETARY PHENOMENON CAUSES OF INFLATIONARY MONETARY POLICY MONETARY POLICY AT THE ZERO LOWER BOUND SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS PART 5 Finance and the Macroeconomy Chapter 14 THE FINANCIAL SYSTEM AND ECONOMIC GROWTH PREVIEW THE ROLE OF THE FINANCIAL SYSTEM INFORMATION CHALLENGES AND THE FINANCIAL SYSTEM GOVERNMENT REGULATION AND SUPERVISION8 OF THE FINANCIAL SECTOR FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH: THE EVIDENCE SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 15 FINANCIAL CRISES AND THE ECONOMY PREVIEW ASYMMETRIC INFORMATION AND FINANCIAL CRISES DYNAMICS OF FINANCIAL CRISES WHY THE 2007–2009 FINANCIAL CRISIS DID NOT LEAD TO A DEPRESSION POLICY RESPONSE TO ASSET-PRICE BUBBLES SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS PART 6 Macroeconomic Policy Chapter 16 FISCAL POLICY AND THE GOVERNMENT BUDGET PREVIEW THE GOVERNMENT BUDGET SIZE OF THE GOVERNMENT DEBT SOVEREIGN DEBT CRISES FISCAL POLICY AND THE ECONOMY IN THE LONG RUN FISCAL POLICY AND THE ECONOMY IN THE SHORT RUN BUDGET DEFICITS AND INFLATION BUDGET DEFICITS AND RICARDIAN EQUIVALENCE SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 17 EXCHANGE RATES AND INTERNATIONAL ECONOMIC POLICY PREVIEW FOREIGN EXCHANGE MARKET AND EXCHANGE RATES EXCHANGE RATES IN THE LONG RUN EXCHANGE RATES IN THE SHORT RUN ANALYSIS OF CHANGES IN EXCHANGE RATES EXCHANGE RATES AND AGGREGATE DEMAND AND SUPPLY ANALYSIS INTERVENTION IN THE FOREIGN EXCHANGE MARKET FIXED EXCHANGE RATE REGIMES TO PEG OR NOT TO PEG SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS PART 7 Microeconomic Foundations of Macroeconomics Chapter 18 CONSUMPTION AND SAVING PREVIEW THE RELATIONSHIP BETWEEN CONSUMPTION AND SAVING INTERTEMPORAL CHOICE AND CONSUMPTION THE INTERTEMPORAL CHOICE MODEL IN PRACTICE: INCOME AND WEALTH THE INTERTEMPORAL CHOICE MODEL IN PRACTICE: INTEREST RATES THE KEYNESIAN THEORY OF CONSUMPTION THE PERMANENT INCOME HYPOTHESIS THE LIFE CYCLE HYPOTHESIS TWO MODIFICATIONS OF THE THEORY: THE RANDOM WALK HYPOTHESIS AND BEHAVIORAL ECONOMICS SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 19 INVESTMENT PREVIEW DATA ON INVESTMENT SPENDING THE NEOCLASSICAL THEORY OF INVESTMENT INVENTORY INVESTMENT TOBIN’S q AND INVESTMENT RESIDENTIAL INVESTMENT SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 20 THE LABOR MARKET, EMPLOYMENT, AND UNEMPLOYMENT PREVIEW DEVELOPMENTS IN THE U.S. LABOR MARKET SUPPLY AND DEMAND IN THE LABOR MARKET RESPONSE OF EMPLOYMENT AND WAGES TO CHANGES IN LABOR DEMAND AND LABOR SUPPLY DYNAMICS OF UNEMPLOYMENT CAUSES OF UNEMPLOYMENT NATURAL RATE OF UNEMPLOYMENT SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS PART 8 Modern Business Cycle Analysis and Macroeconomic Policy Chapter 21 THE ROLE OF EXPECTATIONS IN MACROECONOMIC POLICY PREVIEW RATIONAL EXPECTATIONS AND POLICY MAKING LUCAS CRITIQUE OF POLICY EVALUATION POLICY CONDUCT: RULES OR DISCRETION? THE ROLE OF CREDIBILITY AND A NOMINAL ANCHOR APPROACHES TO ESTABLISHING CENTRAL BANK CREDIBILITY SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Chapter 22 MODERN BUSINESS CYCLE THEORY PREVIEW REAL BUSINESS CYCLE MODEL NEW KEYNESIAN MODEL A COMPARISON OF BUSINESS CYCLE MODELS SUMMARY KEY TERMS REVIEW QUESTIONS PROBLEMS DATA ANALYSIS PROBLEMS Epilogue POLICY AND PRACTICE: WHERE DO MACROECONOMISTS AGREE AND DISAGREE? PREVIEW WHERE MACROECONOMISTS AGREE WHERE MACROECONOMISTS DISAGREE THE FUTURE OF BUSINESS CYCLE THEORY SUMMARY KEY TERMS Glossary A B C D E F G H I J K L M N O P Q R S T U V W Z Index A B C D E F G H I J K L M N O P Q R S T U V W Z