Abel, Bernanke, and Croushore present macroeconomic theory in a way that prepares students to analyze real macroeconomic data used by policy makers and researchers. With a balanced treatment of both classical and Keynesian economics, the comprehensive coverage makes it easy for instructors to align chapters to fit their own syllabi.
Students in this course often struggle to see how the macroeconomic models compare to one another, and fit into the big picture. This text uses a unified approach based on a single economics model that provides students with a clear understanding of macroeconomics and its classical and Keynesian assumptions.
The Sixth Edition includes the latest work in monetary policy and research and offers worked examples to students learning the IS-LM model.
- Coverage of inflation and monetary policy reflects the latest work by researchers and the Federal Reserve.
- Early coverage of long-run topics in chapters 3—7 reflects a commitment to modern macro theory, followed by an equally in-depth analysis of short-run issues in chapters 8—11.
- A unified framework uses a single model, built from a set of core economic ideas, to introduce the macroeconomic theories and concepts.
- A balanced presentation of both classical and Keynesian economics allows students to see the complete picture of economic theory, and allows flexibility for professors to teach the course their way.
- Real-world applications connect theory to practice, helping students make active use of the economic ideas in the text.
- Applications show students how theory is used to understand real-world macroeconomic issues.
- Boxes draw from current research, highlighting interesting new developments and topics in the field.
- In Touch with the Macroeconomy boxes ask students to find and interpret macroeconomic data, like economists would in their careers.
- Learning tools for students aid comprehension and application. Key diagrams in each chapter help students identify the most critical ideas. Summary tables and extensive end-of-chapter problem sets help to reinforce learning.
New to This Edition
- New coauthor Dean Croushore formally joins the team after contributing to previous editions as a contributing author and a supplements author. Croushore served fourteen years at the Federal Reserve Bank of Philadelphia, twelve of which as the head of the macroeconomics section.
- New monetary and fiscal policy coverage includes:
- How the zero bound on nominal interest rates affected monetary policy in Japan, Switzerland, and the United States (chapter 11).
- The U.S. disinflation of the 1980s and 1990s (chapter 12).
- The role of communication in monetary policy (chapter 14).
- Recent proposals to reform the U.S. income tax system to save the U.S. social security system (chapter 15).
- New labor market issues include:
- A discussion of a comparison of U.S. and European labor markets (chapter 3)
- The impact of globalization (chapter 5).
- The jobless recovery following the 2001 recession (chapter 8).
- Measurement of the natural rate of unemployment (chapter 12).
- New appendices to the business cycle chapters (chapters 9—11) show examples of numerical exercises using the model equations, a discussion of the jobless recovery from the 2001 recession (chapter 8), a box on DSE models and the classical—Keynesian debate (chapter 11).
- New growth-related topics include a discussion of the productivity miracle of the 1990s and the growth of China’s economy.
- New PowerPoint® lecture slides allow professors to adapt their course directly to the content of the book.
- Choice of format for students. In addition to the traditional textbook format, students have additional purchase options online.
Table of Contents
PART 1 INTRODUCTION
Chapter 1 Introduction to Macroeconomics
1.1 What Macroeconomics Is About
1.2 What Macroeconomists Do
1.3 Why Macroeconomists Disagree
Chapter 2 The Measurement and Structure of the National Economy
2.1 National Income Accounting: The Measurement of Production, Income, and Expenditure
2.2 Gross Domestic Product
2.3 Saving and Wealth
2.4 Real GDP, Price Indexes, and Inflation
2.5 Interest Rates
PART 2 LONG-RUN ECONOMIC PERFORMANCE
Chapter 3 Productivity, Output, and Employment
3.1 How Much Does the Economy Produce? The Production Function
3.2 The Demand for Labor
3.3 The Supply of Labor
3.4 Labor Market Equilibrium
3.6 Relating Output and Unemployment: Okun’s Law
Chapter 4 Consumption, Saving, and Investment
4.1 Consumption and Saving
4.3 Goods Market Equilibrium
Chapter 5 Saving and Investment in the Open Economy
5.1 Balance of Payments Accounting
5.2 Goods Market Equilibrium in an Open Economy
5.3 Saving and Investment in a Small Open Economy
5.4 Saving and Investment in Large Open Economies
5.5 Fiscal Policy and the Current Account
Chapter 6 Long-Run Economic Growth
6.1 The Sources of Economic Growth
6.2 Growth Dynamics: The Solow Model
6.3 Government Policies to Raise Long-Run Living Standards
Chapter 7 The Asset Market, Money, and Prices
7.1 What Is Money?
7.2 Portfolio Allocation and the Demand for Assets
7.3 The Demand for Money
7.4 Asset Market Equilibrium
7.5 Money Growth and Inflation
PART 3 BUSINESS CYCLES AND MACROECONOMIC POLICY
Chapter 8 Business Cycles
8.1 What Is a Business Cycle?
8.2 The American Business Cycle: The Historical Record
8.3 Business Cycle Facts
8.4 Business Cycle Analysis: A Preview
Chapter 9 The IS-LM/AD-AS Model: A General Framework for Macroeconomic Analysis
9.1 The FE Line: Equilibrium in the Labor Market
9.2 The IS Curve: Equilibrium in the Goods Market
9.3 The LM Curve: Asset Market Equilibrium
9.4 General Equilibrium in the Complete IS—LM Model
9.5 Price Adjustment and the Attainment of General Equilibrium
9.6 Aggregate Demand and Aggregate Supply
Chapter 10 Classical Business Cycle Analysis: Market-Clearing Macroeconomics
10.1 Business Cycles in the Classical Model
10.2 Money in the Classical Model
10.3 The Misperceptions Theory and the Nonneutrality of Money
Chapter 11 Keynesianism: The Macroeconomics of Wage and Price Rigidity
11.1 Real-Wage Rigidity
11.2 Price Stickiness
11.3 Monetary and Fiscal Policy in the Keynesian Model
11.4 The Keynesian Theory of Business Cycles and Macroeconomic Stabilization
PART 4 MACROECONOMIC POLICY: ITS ENVIRONMENT AND INSTITUTIONS
Chapter 12 Unemployment and Inflation
12.1 Unemployment and Inflation: Is There a Trade-Off?
12.2 The Problem of Unemployment
12.3 The Problem of Inflation
Chapter 13 Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy
13.1 Exchange Rates
13.2 How Exchange Rates Are Determined: A Supply-and-Demand Analysis
13.3 The IS—LM Model for an Open Economy
13.4 Macroeconomic Policy in an Open Economy with Flexible Exchange Rates
13.5 Fixed Exchange Rates
Chapter 14 Monetary Policy and the Federal Reserve System
14.1 Principles of Money Supply Determination
14.2 Monetary Control in the United States
14.3 The Conduct of Monetary Policy: Rules Versus Discretion
Chapter 15 Government Spending and Its Financing
15.1 The Government Budget: Some Facts and Figures
15.2 Government Spending, Taxes, and the Macroeconomy
15.3 Government Deficits and Debt
15.4 Deficits and Inflation
Appendix A Some Useful Analytical Tools