Scott Gilbert

Introduction to Macroeconomics Part I: Concepts, Goals, and Measurement

Macroeconomic Concepts 1. 2. 3. national and global economies - prosperity, poverty, progress macroeconomics: the science of prosperity features of the macroeconomy - goods and services - players: households, rms, government policy-makers rational behavior, interaction - resources: land, labor, capital, technology, entrepreneurship - institutions: market economy vs. socialism nancial system: money and banking, funds markets political and legal systems democracy, freedom, rights, regulation economic policy and intervention - time: dynamics: trends, cycles uncertainty, prediction production - resources, productivity role of labor and capital - efciency, capacity utilization - allocation, opportunity cost, frontier - role of institutions: private vs. public production distribution - who gets what? workers vs. capitalists, young vs. old - markets and opportunity, competition, meritocracy - national vs. global distribution - government inuence: taxes, transfers 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 ow

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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 economic growth, innovation, investment, capital accumulation full employment, enterprise, economic freedom money and banking prices: ination and deation funds: availability, cost, interest rates

2. 3. 4.

progress: opportunity: nancial stability:

Macroeconomic Measurement 1. income and output: national income sources of income disposable income taxes, transfers, national income income per capita real income, ination adjustment output: gross domestic product (GDP) types of output: consumption, govertnment expenditures, private investment, net exports GDP per capita real GDP, ination adjustment economic growth rate: growth in real GDP trends and cycles in income and output potential output uctuation and the business cycle predicting output: Index of Leading Economic Indicators market value of assets household wealth: sources, distribution, trends employed, unemployed, labor force, unemployment rate types and duration of unemployment unemployment and the business cycle

2. 3.

wealth: employment:

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standard of living:

real disposable income per capita real GDP per capita Human Development Index (HDI) Index of Economic Freedom Consumer Price Index (CPI) ination in consumer prices using CPI to compute real wages and interest rates 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

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economic freedom: consumer prices:

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international: