Principles of Macroeconomics
GDP, inflation, and unemployment measured, and the models that move: AD-AS, the money multiplier, loanable funds, and Solow growth.
15 units · 104 topics · 487 questions
The two clocks a whole economy runs on, and the trade-offs that show up whether you zoom in on one shopper or out to an entire country.
What Macroeconomics Studies · Positive and Normative Statements in Macroeconomics · Trade-offs and the Production Possibilities Frontier · Growth Versus Fluctuations: The Two Timescales of Macroeconomics
The circular flow, the three ways to add up everything a country produced this year, and why the resulting number can rise without anyone being better off.
The Circular Flow of Income and Spending · What Counts in GDP and What Doesn't · The Expenditure Approach to GDP · The Income Approach and Value Added · +4 more
A basket of goods turned into one number, the inflation rate that number implies, and why inflation reshuffles wealth instead of striking everyone equally.
Building a Price Index from a Market Basket · Calculating the Inflation Rate · Why Price Indexes Overstate True Inflation · Real Versus Nominal Variables · +3 more
Who actually counts as jobless, the three different reasons a job search can fail, and why a healthy economy never reaches zero unemployment.
Sorting the Population: Employed, Unemployed, and Out of the Labor Force · The Three Types of Unemployment · The Natural Rate of Unemployment and Full Employment · Discouraged Workers and Hidden Labor-Market Slack · +1 more
Why a small gap in growth rates compounds into a completely different country in one lifetime, and the Solow picture of capital and technology behind it.
Growth Rates and the Rule of 70 · The Sources of Economic Growth: Capital, Labor, and Technology · The Production Function and Diminishing Returns to Capital · Capital Deepening and the Solow Diagram · +4 more
How savers and borrowers find each other through banks, bonds, and stocks, and the loanable funds market that sets the one price connecting them all.
Financial Institutions: Banks, Bonds, and Stocks · Bond Prices and Interest Rates · The Time Value of Money and Present Value · Compounding and Future Value · +5 more
Why an economy that grows steadily over decades still lurches up and down year to year, and how economists date and size those swings.
Phases of the Business Cycle · Output Gaps and Potential GDP · Leading, Lagging, and Coincident Indicators · Dating a Recession
What money actually is, how one deposit multiplies through the banking system, and how the Fed steers interest rates in today's ample-reserves world.
What Money Is and What It Does · Measuring the Money Supply: M1 and M2 · The Bank Balance Sheet and T-Accounts · Deposit Expansion Round by Round · +6 more
Why printing money can never make a country richer, and the long-run separation between the real economy and the price level that follows from it.
The Quantity Equation: Money, Velocity, Prices, and Output · The Quantity Theory of Money · The Classical Dichotomy and Monetary Neutrality · Money Growth and Hyperinflation · +1 more
What changes once a country trades and borrows abroad: the balance of payments, currency markets, and the loop linking interest rates to net exports.
Net Exports and the Trade Balance · The Balance of Payments: Current and Financial Accounts · The Saving-Investment Identity in an Open Economy · Exchange Rates, Appreciation, and Depreciation · +6 more
The one model that explains a recession, a boom, and the economy's own slow fix for both, as demand meets a supply curve that turns vertical in the long run.
What Aggregate Demand Is · Why the Aggregate Demand Curve Slopes Downward · What Shifts Aggregate Demand · Short-Run Aggregate Supply · +7 more
How a government's own spending and tax decisions ripple through the whole economy multiplied, and what a decade of deficits leaves behind.
The Marginal Propensity to Consume and Save · Deriving the Spending Multiplier · The Tax Multiplier · Sizing a Fiscal Policy Response to an Output Gap · +4 more
How one interest rate decision travels from the money market through investment to output, and why that trip can take a year and a half.
The Money Market and the Nominal Interest Rate · Monetary Policy Transmission to Investment and Aggregate Demand · The Zero Lower Bound and Liquidity Traps · Comparing Monetary and Fiscal Policy · +1 more
The inflation-unemployment tradeoff that looks solid in the short run and disappears in the long run, and why what people expect decides which world you are in.
The Short-Run Phillips Curve · Adaptive Expectations and the Long-Run Phillips Curve · Rational Expectations and the Lucas Critique · Disinflation and Central Bank Credibility · +2 more
Where economists who agree on the models still disagree on the judgment calls: rules against discretion, a balanced budget, and open trade.
Policy Rules Versus Discretion · Whether the Central Bank Should Target Inflation · Whether the Federal Budget Should Balance Every Year · The Case for and Against Free Trade