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.
Learning Outcomes
The student who successfully completes this course will:
- be able to demonstrate a comprehensive knowledge of the vocabulary associated with the principles of macroeconomics.
- be able to demonstrate a basic understanding of the theories associated with the principles of macroeconomics.
- be able to better comprehend events that happen in the world which surrounds them.
- be able to critically evaluate government policy with respect to economics.
- have a solid foundation which will enable them to be successful in any future economics courses they may take.
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Teaching and Learning Resource
Key Economic Variables
- Key Economic Variables
- Definition of the Macroeconomy
- Introduction to Macroeconomics
- The Scope and Method of Economics
- Macroeconomic Policies
- Macroeconomic Controversies
- Measures of Economic Performance
- Economic Activity
Economic methodology is the study of methods, usually scientific method, in relation to economics, including principles underlying economic reasoning.[1] The term 'methodology' is also commonly, though incorrectly, used as an impressive synonym for 'method(s)', as distinct from the study of method(s).
Methodological issues, including similarities and contrasts to the natural sciences and to other social sciences, include:
- the definition of economics[2]
- the scope of economics as defined by its methods[3]
- fundamental principles and operational significance of economic theory[4]
- methodological individualism versus holism in economics[5]
- allegedly fruitful and predictive vs. realistic aspects of simplifying assumptions, including rational choice and profit maximizing.[6]
- the scientific status of economics[7]
- the balance of empirical and a priori approaches[8]
- the limits on and uses of experimental methods[9]
- analysis of mathematical and axiomatic methods in economics[10]
- the writing[11] and rhetoric of economics[12]
- analysis of theory and practice in contemporary economics.[13]
- Economic Profile - UK
- Economic Profile of Australia
- Economic Profile China
- Economic Profile - Hong Kong
- The
Modern Market Economy and the Rule of Law
-
The author is Professor of Economics at the University of Maryland. This article is based on a speech given at a conference on China's economic reform in Beijing on February 26, 2000. It is translated from Chinese by Minfang YAN and Duan WU.
- Economic Profile - India
- Economic Profile - Kuwait
- Economic Profile - Malaysia
- Economic Profile - Russia
- Economic Profile - USA
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Edited by Anna Meyendorff and Anjan V. Thakor |
Activity
Economic Growth
Tutorials
- Markets and Government in the Global Economy
- International Trade and Public Policy
- Balance of Payments
- Current Issues in Macroeconomic Policy
Readings
Economic growth is the increase of per capita gross domestic product (GDP) or other measure of aggregate income. It is often measured as the rate of change in GDP. Economic growth refers only to the quantity of goods and services produced.
Economic growth can be either positive or negative. Negative growth can be referred to by saying that the economy is shrinking. Negative growth is associated with economic recession and economic depression.
In order to compare per capita income across multiple countries, the statistics may be quoted in a single currency, based on either prevailing exchange rates or purchasing power parity. To compensate for changes in the value of money (inflation or deflation) the GDP or GNP is usually given in "real" or inflation adjusted, terms rather than the actual money figure compiled in a given year, which is called the nominal or current figure.
Economists draw a distinction between short-term economic stabilization and long-term economic growth. The topic of economic growth is primarily concerned with the long run. The short-run variation of economic growth is termed the business cycle.
The long-run path of economic growth is one of the central questions of economics; despite some problems of measurement, an increase in GDP of a country is generally taken as an increase in the standard of living of its inhabitants. Over long periods of time, even small rates of annual growth can have large effects through compounding (see exponential growth). A growth rate of 2.5% per annum will lead to a doubling of GDP within 29 years, whilst a growth rate of 8% per annum (experienced by some Four Asian Tigers) will lead to a doubling of GDP within 10 years. This exponential characteristic can exacerbate differences across nations.
- Various theories on economic growth
- Positive effects of economic growth
- Negative effects of economic growth
- Implications of global warming
- Prominent growth economists
- Related topics also
- References
- Further reading
- The Behavior of Money and Other Economic Variables: Two Natural Experiments
- The Big Picture: Business and Trade Cycle
- RPI
& Finding Data
FAQs on the UK's most familiar measure of inflation
- How
much is that worth?
- EH.Net calculator for comparing the purchasing power of money in Great Britain from 1600 to any other year including the present.
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Activities
- Business Survival, Profit and Growth
- Economic Growth Theories - The Roller-Coaster of Growth - Why?
- Economic Growth
- Child Poverty, Free Trade and Free Markets
- International Trade
- Effects of a Floating Exchange Rate System
- Monetarists - Theories
Economic Policy in the UK
Tutorials
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Readings
Economic policy refers to the actions that governments take in the economic field. It covers the systems for setting interest rates and government budget as well as the labour market, national ownership, and many other areas of government interventions into the economy.
Such policies are often influenced by international institutions like the International Monetary Fund or World Bank as well as political beliefs and the consequent policies of parties.
- Types of economic policy
- Macroeconomic stabilization policy
- Tools and goals
- Discretionary policy vs policy rules
- Economic policy through history
- References
A free market is a market where prices of goods and services are arranged completely by the mutual non-coerced consent of sellers and buyers, determined generally by the supply and demand law with no government interference in the regulation of costs, supply and demand. The opposite of a free market is a controlled market, where government sets or regulates prices directly or through regulating supply and/or demand.[1] Although a free market necessitates that government does not regulate supply, demand, and prices, it also requires the traders themselves do not coerce or mislead each other, so that all trades are morally voluntary.[2] This is not to be confused with a perfect market where individuals have perfect information and there is perfect competition.
The notion of a free market is closely associated with laissez-faire economic philosophy, which advocates approximating this condition in the real world by mostly confining government intervention in economic matters to regulating against force and fraud among market participants. Hence, with government force limited to a defensive role, government itself does not initiate force in the marketplace beyond levying taxes in order to fund the maintenance of the free marketplace. Some free market advocates oppose taxation as well, claiming that the market is better at providing all valuable services including defense and law, or that such services can be provided without direct taxation. Anarcho-capitalists, for example, would substitute arbitration agencies and private defense agencies.
While most economists regard the free market as a useful if simplistic model in developing economic policies to attain social goals, some regard the free market as a normative rather than descriptive concept, and claim that policies which deviate from the ideal free market solution are 'wrong' even if they are believed to have some immediate social benefit. Samuelson treated market failure as the exception to the general rule of efficient markets. But more recently the Greenwald-Stiglitz (1986) theorem [3] posits market failure as the norm, establishing "that government could potentially almost always improve upon the market's resource allocation." And the Sappington-Stiglitz theorem "establishes that an ideal government could do better running an enterprise itself than it could through privatization"[4] (Stiglitz 1994, 179).[5]
In political economics, one opposite extreme to the free market economy is the command economy, where decisions regarding production, distribution, and pricing are a matter of governmental control. Other opposites are the gift economy and the subsistence economy. The mixed economy is intermediate between these positions and is the preferred basis of socioeconomic policy for most countries and political parties.
In other words, a free market economy is "an economic system in which individuals, rather than government, make the majority of decisions regarding economic activities and transactions."[6] In social philosophy, a free market economy is a system for allocating goods within a society: purchasing power mediated by supply and demand within the market determines who gets what and what is produced, rather than the state. Early proponents of a free-market economy in 18th century Europe contrasted it with the medieval, early modern, and mercantilist economies which preceded it.
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector (the state or government) to the private sector (businesses that operate for a private profit) or to private non-profit organizations. In a broader sense, privatization refers to transfer of any government function to the private sector - including governmental functions like revenue collection and law enforcement.[1]
The term "privatization" also has been used to describe two unrelated transactions. The first is a buyout, by the majority owner, of all shares of a public corporation or holding company's stock, privatizing a publicly traded stock, and often described as private equity. The second is a demutualization of a mutual organization or cooperative to form a joint stock company.[2]
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Activity
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Structures of the taxation systems in the EU - Data 2005 Edition(PDF) |
Deindustrialization in the UK
Tutorials
Readings
Deindustrialization (also spelled deindustrialisation) is a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially heavy industry or manufacturing industry. It is an opposite of industrialization.
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Activity
Case Studies
British Steel was a major British steel producer, consisting of the assets of former private companies which had been nationalised, largely under the Labour Party government of Harold Wilson (1964-1970).
In 1971, it sponsored Sir Chay Blyth in his record-making non-stop circumnavigation against the winds and currents, known as 'The Impossible Voyage'. In 1992 they sponsored the British Steel Challenge, the first of a series of 'wrong way' races for amateur crews.
It was privatised in 1988 under the Conservative government of Margaret Thatcher. It merged with the Dutch steel producer Koninklijke Hoogovens to form Corus Group on 6 October 1999.[1] Corus itself was taken over in March 2007 by the Indian steel operator Tata Steel
Recommended Texts
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International Economics: A European Perspective Barbara
Ingham Check the availability and buy your books from our Bookshop. |
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Economics
of the Welfare State Check the availability and buy your books from our Bookshop. |
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A
primer in European macroeconomics Check the availability and buy your books from our Bookshop |
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Going for growth The economy of the EU European Commission, Manuscript completed in September 2003 Catalogue number: NA-47-02-357-EN-C Check the availability and buy your books from our Bookshop.
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Misfortunes
of Prosperity:
An Introduction to Modern Political Economy Check the availability and buy your books from our Bookshop. |
Resources
