Contents
Macroeconomics
Rationale
Macroeconomics is a major branch of economics that deals with the performance, structure, and behavior of the economy as a whole (Snowden and Vane 2002). Macroeconomists study and seek to understand the determinants of aggregate trends in the economy with particular focus on national income, unemployment, inflation, investment, and international trade. In contrast microeconomics is primarily focused on the determination of prices and the role of prices in allocating scarce resources (Blaug 1985).
While macroeconomics is a broad field of study, there are two areas of research that are emblematic of the discipline: The attempt to understand the causes and consequences of short-run fluctuations in national income (the business cycle), and the attempt to understand the determinants of long-run economic growth (increases in national income).
Macroeconomic models and their forecasts are used by both governments and large corporations to assist in the development and evaluation of economic policy and business strategy.
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Teaching and Learning Resource
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Introduction to Economics
- The Art and Science of Economic Analysis
- Some Tools of Economic Analysis
- The Market System
- The Economic Actors: Households, Firms, Governments, and the Rest of the World
Economics is the social science that studies the production, distribution, and consumption of goods and services. Dimensions of production include measurement - how much, how efficiently, and for whom (that is, 'distribution'). The word 'economics' is from the Greek words οἶκος [oikos], meaning house, and νόμος [nomos], meaning custom or law, hence "rules of the house(hold)".
Discussions about production and distribution date back to ancient laws and to philosophers, such as Plato. Economics in its modern sense, however, is conventionally dated from the publication of Adam Smith's The Wealth of Nations in 1776. Smith defines the subject in a way that yokes a proposed methodological program to practical concerns:
- Political economy, considered as a branch of the science of a statesman or legislator, proposes two distinct objects: first, to supply a plentiful revenue or product for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services. It proposes to enrich both the people and the sovereign.
'Economics' displaced the earlier term of 'political economy' with the rise of neoclassical economics after 1870.
A definition that captures much of modern economics is that of Lionel Robbins in a 1932 essay: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses." Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem.
A convenient name for approaches to economics that use certain standard assumptions, distinctions, or methods of analysis is mainstream economics. Heterodox economics, including institutional economics, Marxian economics, socialism, and green economics may make other assumptions, such as that economics primarily deals with the exchange of value and that labour (human effort) is the source of all value.
The field may be divided in other ways, most commonly microeconomics vs. macroeconomics. It may also be divided as to positive ("what is") vs. normative ("what ought to be"), and by subfield. Economics has many direct applications in business, personal finance, and government.
Economics involves the study of choice, as affected by incentives and resources. Its methods have been increasingly applied to seemingly distant fields of study that involve people with faced with alternatives that require choice, including education, the family, politics, health, law, crime, religion,and war.
Fundamentals of Macroeconomics
Tutorials
- Introduction to Macroeconomics
- Productivity and Growth
- Unemployment and Inflation
- Measuring Economic Aggregates
- Consumption and Aggregate Expenditure
- Aggregate Expenditure and Demand-Side Equilibrium
- Aggregate Supply
Readings
In economics, Productivity is the amount of output created (in terms of goods produced or services rendered) per unit input used. For instance, labour productivity is typically measured as output per worker or output per labour-hour. With respect to land, the "yield" is equivalent to "land productivity". Within Capitalism, productivity increases lead to higher standards of living for the general popualtion. As Henry Hazlitt explains in Economics in One Lesson, increasing production reduces prices, and therefore goods become more widely available. Automobiles, for example, were initially hand made and only available to the wealthy. As productivity increased, and the price of automobiles fell, they became widely available to the general population.
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In mainstream economics, Inflation is a rise in the general level of prices, as measured against some baseline of purchasing power.
The prevailing view in mainstream economics is that inflation is caused by the interaction of the supply of money with output and interest rates. In general, mainstream economists divide into two camps: those who believe that monetary effects dominate all others in setting the rate of inflation, or broadly speaking, monetarists, and those who believe that the interaction of money, interest and output dominate over other effects, or broadly speaking Keynesians. Other theories, such as those of the Austrian school of economics, believe that an inflation of the general price level and of specific prices is a result from an increase in the supply of money by central banking authorities.
Related terms include: deflation, a general falling level of prices, disinflation, the reduction of the rate of inflation, hyper-inflation, an out of control inflationary spiral, stagflation, a combination of inflation and poor economic growth, and reflation, which is an attempt to raise prices to counteract deflationary pressures.
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Inflation,
Unemployment, and Monetary Policy Robert M. Solow and John B. Taylor edited and with an introduction by Benjamin M. Friedman Check the availability and buy your books from our Bookshop. |
Fiscal and Monetary Policy
Tutorials
- Fiscal Policy
- Money and the Financial System
- Banking and the Money Supply
- Monetary Theory and Policy
- The Policy Debate: Active or Passive?
- Budgets,
Deficits, and Public Policy
Readings
Fiscal Policy is the economic term that defines the set of principles and decisions of a government in setting the level of public expenditure and how that expenditure is funded. Fiscal policy and monetary policy are the macroeconomic tools that governments have at their disposal to manage the economy. Fiscal policy is the deliberate change in government spending, government borrowing or taxes to stimulate or slow down the economy. It contrasts with monetary policy, which describes the policies about the supply of money to the economy.
Fiscal policy is described as being either expansionary or contractionary. Expansionary fiscal policy will increase the output, which will increase interest rates. Contractionary will slow down the economy and reduce interest rates.
- 4 types of Fiscal Policy, Introduction to Macroeconomics, Professor Philip J. McLewin
- Smartalec Economics Discussion Board: [1] - Growing community for Economics discussion.
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Monetary
Theory and Policy Check the availability and buy your books from our Bookshop. |
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The International SettingLectures and Tutorials Readings
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International Trade is the exchange of goods and services across international boundaries or territories. In most countries, it represents a significant share of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact. Increasing international trade is the primary meaning of "globalization".
International trade is also a branch of economics, which, together with international finance, forms the larger branch of international economics.
- Balance of trade
- Comparative advantage
- Customs union
- Economics
- Free trade
- Free trade area
- Gravity model of trade
- List of countries by imports
- List of countries by exports
- List of international trade topics
- List of economists
- Most favoured nation clause
- OPEC
- Protectionism
- Trade bloc
- Single Window System
- Ecological Economics
- Borderless Selling
- Export
- Import (international trade)
International Finance is the branch of economics that studies the dynamics of exchange rates, foreign investment, and how these affect international trade.
See also
External links |
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Recommended Text
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Economic
and Financial Globalization - What the Numbers Say
Check the availability and buy your books from our Bookshop. |
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Exchange
Rates and International Finance
4th
Edition Check the availability and buy your books from our Bookshop. |
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Check the availability and buy your books from our Bookshop. |
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Interest
and Prices: Foundations of a Theory of Monetary Policy
Michael Woodford Cloth
| 2003 | ISBN: 0-691-01049-8 Check the availability and buy your books from our Bookshop. |
Resources
