Macroeconomic Issues

8 Key excerpts on "Macroeconomic Issues"

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  eBook - ePub

  Macroeconomic Principles and Problems

  A Pluralist Introduction

  • Geoffrey Schneider(Author)
  • 2022(Publication Date)
  • Routledge

    (Publisher)

  PART III Macroeconomic Issues and problems DOI: 10.4324/9780429399350-10 This section provides a broad overview of the current state of macroeconomics and the key issues that macroeconomists are studying. Chapter 8 introduces modern macroeconomics and the importance of understanding aggregate economics as a different way of thinking than microeconomics. The chapter also describes the evolution of macroeconomic policy, beginning with the Keynesian consensus of the 1950s and 1960s, the return of laissez-faire approaches from 1980 to 2007, and the switch back to Keynesian economics after the financial crisis of 2008-2010 and the coronavirus recession of 2020. Key macroeconomic topics are discussed, including the business cycle, stabilization policy, economic growth, and financial markets. Chapter 9 discusses economic well-being. There are debates over the most important goals for an economic system and what data we should use to measure, describe, and analyze the macroeconomy. Traditionally, economists used real gross domestic product (real GDP) to measure the health of the economy. However, political economists and some mainstream economists argue that other measures, such as the OECD Better Life Index, the genuine progress indicator, and the United Nations Human Development Index are better measures of welfare due to the limitations of GDP. Some prefer to use measures of happiness. Subsequently, in Chapter 10, we turn to the major macroeconomic market failures: Unemployment and price instability. The chapter describes the different types of unemployment and the problems that occur due to unemployment. Then, the chapter discusses inflation and deflation and the problems they can cause for the macroeconomy

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  eBook - ePub

  Macroeconomic Analysis and Policy

  A Systematic Approach

  • Joshua E Greene(Author)
  • 2017(Publication Date)
  • WSPC

    (Publisher)

  Chapter 1

  INTRODUCTION TO MACROECONOMIC ACCOUNTS, ANALYSIS, AND RELATED POLICY ISSUES

  Macroeconomics is the study of an entire economy. Macroeconomics assumes the existence of many individual economic sectors and the markets governing them. Thus, the focus is on the behavior of the economy as a whole — the aggregate of all the markets for goods and services, as well as the impact of the public sector (government and government-owned entities, called public or state-owned enterprises) and the rest of the world on the economy. Studying an entire economy requires conceiving of aggregate demand — the total demand for goods and services in the economy — and aggregate supply — the total amount of goods and services made available for sale in the economy. In equilibrium, aggregate demand and aggregate supply should be equal. In practice, aggregate demand and supply can differ, generating a variety of macroeconomic conditions, including short- to medium-term fluctuations in an economy, called business cycles.

  Macroeconomic analysis involves studying an economy’s main components. These include

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  eBook - PDF

  Introductory Macroeconomics

  • Michael Veseth(Author)
  • 2014(Publication Date)
  • Academic Press

    (Publisher)

  TOOLS AND PROBLEMS MACROECONOMIC PROBLEMS 5 SUPPLY AND DEMAND 27 THE PROBLEM OF UNEMPLOYMENT 57 UNDERSTANDING INFLATION 81 1 MACROECONOMIC PROBLEMS Preview What is economics? What is macroeconomics? What are our national economic problems? What are our national economic goals? Have we been successful in achieving those goals? How have our economic problems changed over the past decades? 6 MACROECONOMIC PROBLEMS ANY OF our most difficult individual and national problems are economic problems. To understand the world and make intelligent choices, therefore, requires that we understand something of economics. It is astounding to consider how much economic events have come to monopolize our time and influence our lives. The federal government was once mostly a referee (making and enforcing criminal and civil law) and a guardian (protecting us from foreign powers). Now Congress and the President seem to spend most of their time fighting economic fires—battling inflation, unemploy-ment, and budget deficits. Newspapers used to count on stories of fires, mur-ders, and kidnappings to increase circulation. Now taxes and interest rates make the headlines and sell papers. Businesses that once were preoccupied with the difficult matter of mak-ing a profit, now worry, as well, about investment tax credits, gross national product, and exchange-rate policies. People who, 10 years ago, did not know the difference between prime rib and prime rate, now think more about the latter than the former. They know that they must master some pretty sophis-ticated economics if they are to make even simple personal and business deci-sions with confidence. Economics is important stuff and this book is designed to help you under-stand economic theories, policies, and news. It is the goal of this text to increase your EQ (Economics Quotient) by leading you through a discussion of economic theory, the nature of our current ills, and an analysis of some of the frequently prescribed cures.

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  Macroeconomics

  Principles & Policy

  • William Baumol, Alan Blinder, John Solow, , William Baumol, Alan Blinder, John Solow(Authors)
  • 2019(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  81 THE MACROECONOMY: AGGREGATE SUPPLY AND DEMAND 5 An Introduction to Macroeconomics 6 The Goals of Macroeconomic Policy 7 Economic Growth: Theory and Policy 8 Aggregate Demand and the Powerful Consumer 9 Demand-Side Equilibrium: Unemployment or Inflation? 10 Bringing in the Supply Side: Unemployment and Inflation? C H A P T E R S PART 2 M acroeconomics is the headline-grabbing part of economics. When economic news appears on the front page of your daily newspaper, or is reported on some web site you read regularly, you are probably reading about some macroeconomic development in the national or world economy. The Federal Reserve is raising interest rates. Inflation remains low. Employment continues to grow. The federal government’s large budget deficit is rising. The euro is falling in value. All of these developments are macroeconomic news. But what do they mean? Part 2 begins your study of macroeconomics. It will first acquaint you with some of the major concepts of macroeconomics—things that you hear about every day, such as gross domestic product (GDP), inflation, unemployment, and economic growth (Chapters 5 and 6). Then it will introduce you to the basic theory that we use to interpret and understand macroeconomic events (Chapters 7 through 10). By the time you finish Chapter 10—which is only six chapters away—those newspaper articles will make a lot more sense. Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2020 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.

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  eBook - PDF

  Macroeconomics For Dummies, UK Edition

  • Manzur Rashid, Peter Antonioni(Authors)
  • 2015(Publication Date)
  • For Dummies

    (Publisher)

  Visit www.dummies.com for free access to great Dummies content online. Part I Getting Started with Macroeconomics In this part . . . ✓ ✓ Discover why macroeconomics is important and get an overview of the many concepts and policies it covers. ✓ ✓ Take a look at the key questions macroeconomists ask about the economy and gain an understanding of why they use models to arrive at answers. ✓ ✓ Understand the four factors that can cause the downfall of an economy. Chapter 1 Discovering Why Macroeconomics Is a Big Deal In This Chapter ▶ ▶ Understanding what macroeconomics is all about ▶ ▶ Glancing at key macroeconomic variables ▶ ▶ Seeing why macroeconomists love modelling ▶ ▶ Introducing macroeconomic policy and financial crises M acroeconomics is the study of the economy as a whole – in contrast to microeconomics, which is the study of individuals and firms. Or as the comedian PJ O’Rourke quipped: ‘Microeconomics concerns things that economists are specifically wrong about, while macroeconomics concerns things economists are wrong about generally!’ Not only does O’Rourke’s quote make even economists laugh, but also it touches on something important: since the global financial crisis of 2007–8, people have become increasingly sceptical of economists and economics. We think that’s a shame (well, we would, wouldn’t we!). But although economists certainly don’t know everything about how the economy works – it’s a hugely complex system that’s difficult to analyse – they do know a lot. This knowledge is important, because macroeconomics affects almost every part of your life. From whether you’re employed or unemployed to how much you earn, how much tax you pay, what services the government pro-vides and how easy or difficult you find borrowing money, macroeconomics really matters. In addition, politicians frequently make promises about the economy and their different policies.

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  The Economics Companion

  • Graham Mallard(Author)
  • 2017(Publication Date)
  • Red Globe Press

    (Publisher)

  3 introducing larger-scale analysis: the macroeconomic world the next four chapters In Chapters 5–8 we analysed the behaviour of individual actors and what results when they interact with one another in individual markets: what I refer to as smaller-scale analysis. We now put them all together to examine the functioning of the economy as a whole. We approach economics in a way that makes individual actors and markets blend into the bigger picture. This is larger-scale analysis. This is macroeconomics . Key term: macroeconomics Macroeconomics is the study of the economy as a whole: the bigger picture. The purpose of studying macroeconomics is for us to understand what determines how wealthy an economy is, and how that wealth can be increased; what causes the two main economic problems of unemployment and inflation, and how they can be reduced; and how economies interact with one another in the global marketplace and the benefits they derive from doing so. 3 3 introducing larger-scale analysis: the macroeconomic world 152 Introducing the bigger things is the purpose of the following four chapters. Working through them will enable you to read and understand the economic issues featured in any financial newspaper. It will also enable you to engage in current economic debates. For example, how wise is it for the government to be cutting its expenditure when the economy has just come out of recession? In what follows, then, we: 1 Introduce the economy and examine what determines its size and how this can be measured (Chapter 9). 2 Develop and use the tools of demand and supply analysis, but at the level of the whole economy rather than at that of a market (Chapter 10). 3 Investigate the causes and consequences of unemployment and inflation, and what the government can do to reduce them, as well as the role of money (Chapter 11).

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  Issues in US-EC Trade Relations

  • Robert E. Baldwin, Carl B. Hamilton, André Sapir, Robert E. Baldwin, Carl B. Hamilton, André Sapir(Authors)
  • 2009(Publication Date)
  • University of Chicago Press

    (Publisher)

  VII Interaction between the Macroeconomic Environment and Trade Issues Passage contains an image 13 Macroeconomic Policy and Trade Performance: International Implications of U.S. Budget Deficits

  Rachel McCulloch*

  13.1   Introduction

  As the trade ministers of 74 nations gathered in Punta del Este in September 1986 to launch the new “Uruguay Round” of multilateral negotiations, the U.S. Department of Commerce released numbers documenting still another record deficit in the nation’s trade accounts. Even after a spectacular decline in the dollar relative to other major currencies, the U.S. merchandise trade deficit for 1986 was anticipated to reach $170 billion, a figure almost beyond imagining just a few years earlier. This seemingly inexorable growth of the trade imbalance intensified domestic political pressure for new protection, exacerbated trade disputes between the United States and its trading partners, and dimmed prospects for new multilateral action to maintain open international markets.

  Despite ongoing discussion of the U.S. “competitiveness problem,” most economic analysts and policymakers had long since agreed that macroeconomic developments in the United States and abroad were the root cause of the huge trade imbalance. However, recognition of the key role of macroeconomic forces in no way simplified policy choices on trade. Macroeconomic conditions continued to disrupt normal trading relationships, and the burden of dealing with the resulting imbalances continued to fall on those directly responsible for trade matters. Yet trade officials have little influence in determining macroeconomic policies at home—and none at all abroad. While finance ministers, central bankers, and heads of state prolonged the debate on appropriate macroeconomic remedies, the domestic political need to “do something” about trade virtually ensured new protectionist moves by the United States—and retaliatory action from trading partners.

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  Whither the Philippines in the 21st Century?

  • Rodolfo C. Severino, Lorraine Carlos Salazar(Authors)
  • 2007(Publication Date)
  • ISEAS Publishing

    (Publisher)

  142 142 Gerardo P. Sicat 7 PHILIPPINE Macroeconomic Issues AND CHALLENGES Gerardo P. Sicat INTRODUCTION: MACROECONOMIC AND STRUCTURAL PROBLEMS * This chapter reviews some Macroeconomic Issues relating to the current Philippine economy. To provide a proper understanding of these issues, their link will be associated with their structural underpinnings. Persistent macroeconomic problems often require a policy adjustment, and inevitably, assessment of the problems boils down to an understanding of what gets done, what gets delayed or what is not possible to do under the circumstances. A further device in presenting the issues is through a comparison with the experience of other East Asian and high-growth countries, which include some ASEAN countries. The review follows this sequence. First, the recent growth performance of the economy is discussed. Then, the compositions of aggregate demand and of aggregate supply are described, emphasizing the reasons for the observed changes and trends. Next, the economy’s saving and investment issues are highlighted, paying notice to the large gap between saving and investment. After that, the spotlight moves to the fiscal front that is a major contributor to the country’s low saving rate. The fiscal sector is discussed in terms of dealing with deficit reduction and managing the public debt. Finally, the review expounds on the economy’s external trade and payments position. 142 143 Macroeconomic Issues and Challenges 143 Current problems and new opportunities are discussed in the context of globalization and the country’s open stance. A major theme that arises from this discussion is that the potentials for development in the Philippines are not fully exploited. A relative measure of this under-performance can be derived from the immense turnaround of economic prospects in 2006 just as soon as the government was able to deal with a reform on the fiscal front.

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