Chapter 1 Introduction to Macroeconomics

I.Goals of Part I A)Introduce students to the main concepts in macroeconomics (Ch. 1) B)Introduce national income accounting and major economic magnitudes (Ch. 2)

II.Goals of Chapter 1 A)Major macroeconomic B)What macroeconomists C)Why macroeconomists disagree

I.What Macroeconomics Is About (Sec. 1.1) A)Long-run economic growth B)Business cycles C)Unemployment; U.S. experience(Fig1.3) D)Inflation E)The international economy F)Macroeconomic policy 1.Fiscal policy (Fig1.6) 2.Monetary policy G)Aggregation; from microeconomics to macroeconomics

II.What Macroeconomists Do (Sec. 1.2) A)Macroeconomic forecasting B)Macroeconomic analysis C)Macroeconomic research 1.Goal: 2.Theoretical and empirical research 3.Economic theory: 4.Economic model: 5.Usefulness of economic theory D)Data development

III.Why Macroeconomists Disagree (Sec. 1.3) A)Positive vs. normative analysis B)Classicals vs. Keynesians 1.The classical approach 2.The Keynesian approach 3.The evolution of the classical-Keynesian debate C)A unified approach to macroeconomics 1. a single model 2.Three markets 3.Model starts with microfoundations 4.Long run 5.Short run