Preface | p. xvii |
Introduction and Measurement | p. 1 |
Introduction | p. 2 |
What Is Macroeconomics? | p. 2 |
Post-World War II U.S. Economic Performance | p. 3 |
Central Questions in Macroeconomics | p. 9 |
Conclusion | p. 12 |
Measurement of Macroeconomic Variables | p. 13 |
The National Income Accounts | p. 13 |
Gross Domestic Product | p. 14 |
What GDP Is Not | p. 17 |
National Income | p. 18 |
Personal and Personal Disposable Income | p. 19 |
Some National Income Accounting Identities | p. 21 |
Measuring Price Changes: Real Versus Nominal Gross Domestic Product | p. 22 |
The Consumer Price Index and the Producer Price Index | p. 25 |
Measures of Cyclical Variation in Output | p. 26 |
Upward Bias in the Consumer Price Index | p. 27 |
Conclusion | p. 28 |
Dating Business Cycles | p. 29 |
Macroeconomic Models | p. 31 |
Classical Macroeconomics (I): Equilibrium Output and Employment | p. 32 |
The Starting Point | p. 32 |
The Classical Revolution | p. 33 |
Production | p. 34 |
Employment | p. 35 |
Equilibrium Output and Employment | p. 41 |
Conclusion | p. 47 |
Real Business Cycles: A First Look | p. 47 |
Classical Macroeconomics (II): Money, Prices, and Interest | p. 49 |
The Quantity Theory of Money | p. 49 |
Money in Hyperinflations | p. 55 |
The Classical Theory of the Interest Rate | p. 55 |
Policy Implications of the Classical Equilibrium Model | p. 59 |
Conclusion | p. 63 |
Supply-Side Economics--A Modern Classical View | p. 64 |
The Keynesian System (I): The Role of Aggregate Demand | p. 66 |
The Problem of Unemployment | p. 66 |
The Simple Keynesian Model: Conditions for Equilibrium Output | p. 69 |
The Components of Aggregate Demand | p. 73 |
Determining Equilibrium Income | p. 77 |
Changes in Equilibrium Income | p. 80 |
Fiscal Stabilization Policy | p. 85 |
Conclusion | p. 86 |
Fiscal Policy in Practice | p. 87 |
Exports and Imports in the Simple Keynesian Model | p. 89 |
The Keynesian System (II): Money, Interest, and Income | p. 93 |
Money in the Keynesian System | p. 93 |
Residential Construction and the Interest Rate | p. 96 |
The IS-LM Curve Model | p. 104 |
Conclusion | p. 127 |
The Algebra of the IS-LM Model | p. 128 |
The Keynesian System (III): Policy Effects in the IS-LM Model | p. 133 |
Factors That Affect Equilibrium Income and the Interest Rate | p. 133 |
The Relative Effectiveness of Monetary and Fiscal Policy | p. 139 |
Conclusion | p. 148 |
The Monetary--Fiscal Policy Mix: Some Historical Examples | p. 149 |
Monetary and Fiscal Policy Multipliers in the IS--LM Curve Model | p. 151 |
The Keynesian System (IV): Aggregate Supply and Demand | p. 155 |
The Keynesian Aggregate Demand Curve | p. 156 |
The Keynesian Aggregate Demand Curve Combined with the Classical Theory of Aggregate Supply | p. 161 |
The Keynesian Contractual View of the Labor Market | p. 165 |
Price and Quantity Adjustments in Great Britain, 1929-1936 | p. 167 |
Labor Supply and Variability in the Money Wage | p. 172 |
The Effects of Shifts in the Aggregate Supply Function | p. 177 |
Severe Supply Disruption: The Case of the Former Soviet Republics | p. 184 |
Conclusion: Keynes Versus the Classics | p. 185 |
The Monetarist Counterrevolution | p. 190 |
Introduction | p. 190 |
The Reformulation of the Quantity Theory of Money | p. 192 |
The Monetarist View of the Great Depression | p. 197 |
Fiscal and Monetary Policy: Monetarists Versus Keynesians | p. 202 |
Unstable Velocity and the Declining Influence of Monetarism | p. 209 |
Conclusion | p. 210 |
Output, Inflation, and Unemployment: Monetarist and Keynesian Views | p. 212 |
The Natural Rate Theory | p. 212 |
Monetary Policy, Output, and Inflation: A Monetarist View | p. 215 |
A Keynesian View of the Output--Inflation Trade-Off | p. 221 |
Evolution of the Natural Rate Concept | p. 227 |
Conclusion | p. 230 |
New Classical Economics | p. 232 |
The New Classical Attack | p. 232 |
A Broader View of the New Classical Position | p. 241 |
The Keynesian Countercritique | p. 243 |
The New Classical Economics and the Disinflation of the 1980s | p. 244 |
Conclusion | p. 248 |
The Great Depression: New Classical Views | p. 249 |
Real Business Cycle Theory and the New Keynesian Economics | p. 252 |
Real Business Cycle Models | p. 252 |
Labor Market Flows | p. 259 |
New Keynesian Economics | p. 260 |
Are Prices Sticky? | p. 263 |
Conclusion | p. 267 |
Macroeconomic Models: A Summary | p. 269 |
Theoretical Issues | p. 269 |
Policy Issues | p. 273 |
Extensions of the Models | p. 277 |
Consumption and Investment | p. 278 |
Consumption | p. 278 |
Declining U.S. Personal Saving | p. 289 |
Investment Spending | p. 294 |
Inventories in the Most Recent Recession | p. 306 |
Conclusion | p. 306 |
Money Demand | p. 308 |
The Definition of Money | p. 310 |
The Theory of the Transactions Demand for Money | p. 311 |
Extensions of Keynes's Theory of the Demand for Money as a Store of Wealth | p. 320 |
Instability of Money Demand | p. 324 |
Conclusion | p. 327 |
The Money Supply Process | p. 329 |
The Federal Reserve System | p. 329 |
Bank Reserves and Bank Deposits | p. 333 |
Who Controls the Money Stock? | p. 340 |
The Money Supply During the Great Depression | p. 344 |
Conclusion | p. 345 |
Long- and Intermediate-Term Economic Growth | p. 347 |
Long-Run Steady-State Growth | p. 348 |
Accounting for U.S. Economic Growth | p. 355 |
Determinants of Output Growth in Intermediate-Run Periods | p. 358 |
Growth and Productivity Slowdown in Other Industrialized Economies | p. 361 |
The Laffer Curve | p. 368 |
Growth Policies in the Reagan, Bush, and Clinton Administrations | p. 371 |
Conclusion | p. 373 |
Economic Policy | p. 377 |
Fiscal Policy | p. 378 |
The Goals of Macroeconomic Policy | p. 378 |
The Goals of Macroeconomic Policymakers | p. 379 |
Rational Expectations and the Partisan Theory | p. 383 |
The Federal Budget | p. 383 |
Budget Deficits in Seven Industrial Countries | p. 386 |
The Economy and the Federal Budget: The Concept of Automatic Fiscal Stabilizers | p. 386 |
Keynesian Objections to Balanced-Budget Rules | p. 390 |
What About the Deficit? | p. 392 |
Conclusion | p. 398 |
Ricardian Equivalence | p. 399 |
Monetary Policy | p. 403 |
The Monetary Policymaking Process | p. 403 |
Competing Strategies for Monetary Policy: Targeting Monetary Aggregates or Interest Rates | p. 404 |
Central Bank Independence and Economic Performance | p. 405 |
Implications of Intermediate Targeting on a Monetary Aggregate | p. 408 |
Implications of Targeting the Interest Rate | p. 412 |
Money Stock Versus Interest Rate Targets | p. 415 |
The Evolution of Federal Reserve Strategy | p. 417 |
Changes in Central Bank Institutions: Recent International Experience | p. 419 |
Inflation Targeting in Practice: The New Zealand Experience | p. 421 |
Conclusion | p. 422 |
Open Economy Macroeconomics | p. 423 |
Exchange Rates and the International Monetary System | p. 424 |
The U.S. Balance of Payments Accounts | p. 424 |
Exchange Rates and the Market for Foreign Exchange | p. 427 |
The Current Exchange Rate System | p. 434 |
Advantages of Exchange Rate Flexibility | p. 437 |
Experience with Floating Exchange Rates | p. 442 |
Fixed Versus Flexible Exchange Rates | p. 447 |
Conclusion | p. 450 |
The European Monetary System | p. 451 |
Monetary and Fiscal Policy in the Open Economy | p. 453 |
The Mundell-Fleming Model | p. 453 |
The Case of Imperfect Capital Mobility | p. 456 |
The Case of Perfect Capital Mobility | p. 462 |
The Saving--Investment Correlation Puzzle | p. 468 |
Conclusion | p. 468 |
Glossary | p. 471 |
Index | p. 475 |
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