CHAP01The Science of Macroeconomics教材课程.pptVIP

The use of multiple models So we will learn different models for studying different issues (e.g., unemployment, inflation, long-run growth). For each new model, you should keep track of its assumptions which variables are endogenous, which are exogenous the questions it can help us understand, those it cannot Prices: flexible vs. sticky Market clearing: An assumption that prices are flexible, adjust to equate supply and demand. In the short run, many prices are sticky – adjust sluggishly in response to changes in supply or demand. For example: many labor contracts fix the nominal wage for a year or longer many magazine publishers change prices only once every 3-4 years Prices: flexible vs. sticky The economy’s behavior depends partly on whether prices are sticky or flexible: If prices sticky (short run), demand may not equal supply, which explains: unemployment (excess supply of labor) why firms cannot always sell all the goods they produce If prices flexible (long run), markets clear and economy behaves very differently Outline of this book: Introductory material (Chaps. 1 2) Classical Theory (Chaps. 3-6) How the economy works in the long run, when prices are flexible Growth Theory (Chaps. 7-8)The standard of living and its growth rate over the very long run Business Cycle Theory (Chaps. 9-14)How the economy works in the short run, when prices are sticky Outline of this book: Policy debates (Chaps. 15-16)Should the government try to smooth business cycle fluctuations? Is the government’s debt a problem? Microeconomic foundations (Chaps. 17-19)Insights from looking at the behavior of consumers, firms, and other issues from a microeconomic perspective Chapter Summary Macroeconomics is the study of the economy as a whole, including growth in incomes changes in the overall level of prices the unemployment rate Macroeconomists attempt to explain the economy and to devise policies to improve its performance. Chapter Summary E