Introduction to Macroeconomics Chapter Nineteen: Introduction to Macroeconomics

Macroeconomics and the Dynamics of Real-World Markets

Figure 19.1: The Stock Market Bubble of 1999-2000 Nasdaq Composite Stock Index Enthusiasm about new technologies, and Internet e-commerce in particular, temporarily drove the prices of many company’s stocks very high. During the bubble, the prices of stocks as determined by supply and demand rose far above the prices that would occur if valuation had been based on the companies’ actual performances. 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: Yahoo! Finance, Monthly data. 3

Figure 19.2: Global Production, 1960-2010 As measured by summing up the GDP of all countries, global production has more than quintupled in the last several decades. Source: The World Bank Group, World Development Indicators Online

Figure 19.3: Global Production Per Capita, 1960-2010 Global production per person has more than doubled in the last several decades. Source: The World Bank Group, World Development Indicators Online

Figure 19.4: GDP in the United States, 1800-2010 GDP in the United States has grown over time, but it has not grown steadily. The economy has experienced alternating periods of expansion and contraction. Source: Louis D. Johnston and Samuel H. Williamson, “The Annual Real and Nominal GDP for the United States, 1790–Present.” Economic History Services, http://www.eh.net/hmit/gdp/. Updated with data from the World Bank Development Indicators. http://data.worldbank.org/indicator

Macroeconomics in Context

Figure 19.5: Growth in Atmospheric Carbon Dioxide, 1815-2010 As fossil-fuel based industrialization and deforestation have increased, so has the atmospheric concentration of the gases involved in global warming. Source: Carbon Dioxide Information Analysis Center, http://cdiac.ornl.gov/ftp/trends/co2/siple2.013 and http://cdiac.ornl. gov/trends/co2/sio-mlo.htm. Updated using NOAA ESRL data. ftp://ftp.cmdl.noaa.gov/ccg/co2/trends/co2_mm_mlo.txt