Textbook: Blanchard "Macroeconomics" 7th/8th (Global) Edition, Pearson
2025/4/15
- Macroeconomics is endogenous (aggregate variables/consequences), microeconomics is exogenous (given fixed variables)
- Macroeconomics emerged as an independent discipline within economics during the Great Depression (30s)
- John Maynard Keynes (Founder of Macroeconomics)
- Before Keynes, classical economics stated prices will adjust and unemployment is voluntary; governments should not intervene
- Keynes stated that markets might not clear at full employment due to a lack of aggregate demand, involuntary unemployment; governments and central banks should intervene in market economies
- Macroeconomics developed business cycles and depressions
- Goals of macroeconomics: empirics (describe developments in economies), theory (explain), policy (design and measure)
- Aggregate Demand/Supply