Scott Gilbert
Introduction to Macroeconomics
Part I: Concepts, Goals, and Measurement
Macroeconomic Concepts
1.
national and global economies
- prosperity, poverty, progress
2.
macroeconomics: the science of prosperity
3.
features of the macroeconomy
- goods and services
- players:
households, firms, government policy-makers
rational behavior, interaction
- resources:
land, labor, capital, technology, entrepreneurship
- institutions: market economy vs. socialism
financial system: money and banking, funds markets
political and legal systems
democracy, freedom, rights, regulation
economic policy and intervention
- time:
dynamics: trends, cycles
uncertainty, prediction
4.
production
- resources, productivity
role of labor and capital
- efficiency, capacity utilization
- allocation, opportunity cost, frontier
- role of institutions: private vs. public production
5.
distribution
- who gets what? workers vs. capitalists, young vs. old
- markets and opportunity, competition, meritocracy
- national vs. global distribution
- government influence: taxes, transfers
6.
markets: essential theory
- buyers and sellers: demand and supply, price and quantity
- competitive markets: demand curve, supply curve
- equilibrium, shortage, surplus
- market formation and change
- multiple markets, circular flow
Macroeconomic Goals
1.
prosperity:
income and wealth
income distribution, typical income
wealth: current and future incomes
standard of living
consumption
health and longevity, literacy
family, community, leisure time
2.
progress:
economic growth, innovation, investment, capital accumulation
3.
opportunity:
full employment, enterprise, economic freedom
4.
financial stability:
money and banking
prices: inflation and deflation
funds: availability, cost, interest rates
Macroeconomic Measurement
1.
income and output:
national income
sources of income
disposable income
taxes, transfers, national income
income per capita
real income, inflation adjustment
output: gross domestic product (GDP)
types of output:
consumption, govertnment expenditures,
private investment, net exports
GDP per capita
real GDP, inflation adjustment
economic growth rate: growth in real GDP
trends and cycles in income and output
potential output
fluctuation and the business cycle
predicting output: Index of Leading Economic Indicators
2.
wealth:
market value of assets
household wealth: sources, distribution, trends
3.
employment:
employed, unemployed, labor force, unemployment rate
types and duration of unemployment
unemployment and the business cycle
4.
standard of living:
real disposable income per capita
real GDP per capita
Human Development Index (HDI)
5.
economic freedom:
Index of Economic Freedom
6.
consumer prices:
Consumer Price Index (CPI)
inflation in consumer prices
using CPI to compute real wages and interest rates
7.
international:
foreign trade
trade surplus, shortage
trade trends and cycles, role of treaties, agreements, unions
foreign investment
private investment
Foreign Direct Investment (FDI)
portfolio investment
public investment and aid
balancing trade and investment
current account, capital account
balance of payments
trends and cycles in international trade and investment