Contents
Managerial Economics
Rationale
Macroeconomics is a sub-field of economics that examines the behavior of the economy as a whole, once all of the individual economic decisions of companies and industries have been summed. Economy-wide phenomena considered by macroeconomics include Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels.
In contrast, microeconomics is the study of the economic behaviour and decision-making of individual consumers, firms, and industries.
Macroeconomics can be used to analyze how to influence government policy goals such as economic growth, price stability, full employment and the attainment of a sustainable balance of payments.
Macroeconomics is sometimes used to refer to a general approach to economic reasoning, which includes long term strategies and rational expectations in aggregate behavior.
Teaching and Learning Resources
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Introduction
- Economics: Foundations and Models
- Comparative Advantage, and the Market System
- Where Prices Come From: The Interaction of Demand and Supply
- Economic
Efficiency, Government Price Setting, and Taxes
In economics, David Ricardo is credited for the principle of comparative advantage to explain how it can be beneficial for two parties (countries, regions, individuals and so on) to trade if one has a lower relative cost of producing some good. What matters is not the absolute cost of production but the opportunity cost, which measures how much production of one good is reduced to produce one more unit of the other good. Comparative advantage is a key economic concept in the study of free trade.
Under the principle of absolute advantage, developed by Adam Smith, one country can produce more output per unit of productive input than another. With comparative advantage, even if one country has an absolute advantage in every type of output, the disadvantaged country can benefit from specializing in and exporting the product(s) with the largest opportunity cost for the other country.[1]
- Links
- David Ricardo's The Principles of Trade and Taxation (original source text)
- Ricardo's Difficult Idea
- The Ricardian Model of Comparative Advantage
- J.G. Hülsmann's Capital Exports and Free Trade explanation of why the immobility of capital is not an essential condition
- Further study notes on comparative advantage
A diagram of the IS/LM model |
In economics, a model is a theoretical construct that represents economic processes by a set of variables and a set of logical and quantitative relationships between them. As in other fields, models are simplified frameworks designed to illustrate complex processes, often but not always using mathematical techniques.
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Firms in the Domestic & International Economies
Tutorials
- Firms, the Stock Market, and Corporate Governance
- Comparative Advantage and the Gains from International Trade
Readings
Macroeconomic Foundations and Long-Run Growth
Tutorials
- GDP: Measuring Total Production and Income
- Unemployment and Inflation
- Business Cycles, the Financial System, and Economic Growth
- Long-Run Economic Growth: Sources and Policies
Readings
Short-Run Fluctuations
Tutorials
Readings
Monetary and Fiscal Policy
Tutorials
- Money, Banks, and the Federal Reserve System
- Monetary Policy
- Fiscal Policy
- Inflation, Unemployment, and Federal Reserve Policy
Readings
The International Economy
Tutorials
Readings
The Global Financial System (GFS) is a financial system consisting of institutions and regulations that act on the international level, as opposed to those that act on a national or regional level. The main players are the global institutions, such as International Monetary Fund and Bank for International Settlements, national agencies and government departments, e.g., central banks and finance ministries, and private institutions acting on the global scale, e.g., banks and hedge funds.
Deficiencies and reform of the GFS have been hotly discussed in recent years.
Recommended Texts
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R. Glenn Hubbard, Columbia University ISBN: 0-13-034825-2
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