1. macroeconomics fifth edition N. Gregory Mankiw PowerPoint ® Slides by Ron Cronovich CHAPTER ONE The Science of Macroeconomics macr o © 2002 Worth Publishers, all rights reserved

2. CHAPTER 1 The Science of Macroeconomics slide 1 U.S. Gross Domestic Product in billions of chained 1996 dollars long-run upward trend…

3. CHAPTER 1 The Science of Macroeconomics slide 2 U.S. Gross Domestic Product in billions of chained 1996 dollars Recession s longest economic expansion on record

4. CHAPTER 1 The Science of Macroeconomics slide 3 2. 近 50 年來台灣平均經濟成長率居世界第一 中華民國 韓國 菲律賓 日本 2 中、韓、菲、日 1953 – 2000 平均經濟成長率 一、台灣經濟發展經驗

5. CHAPTER 1 The Science of Macroeconomics slide 4  2000 ～ 2002 年我國的年平均經濟成長率較 1996 ～ 1999 年平均 經 濟成長率衰退 3.27 個百分點，台灣經濟的衰退率在亞洲各國中 高居第一。 單位：％ 國 別 年 別 中華民國中華民國 美國美國 日本日本 新加坡新加坡 韓國韓國 香港香港 泰國泰國 馬來西亞馬來西亞 印尼印尼 菲律賓菲律賓 1996 1997 1998 1999 2000 2001 2002 6.10 6.68 4.57 5.42 5.86 -2.18 3.59 3.60 4.40 4.30 4.10 3.80 0.30 2.40 3.50 1.90 -1.1 0.20 2.80 0.40 0.10 8.10 8.50 -0.9 6.40 9.40 -2.4 2.20 6.80 5.00 -6.7 10.9 9.30 3.10 6.30 4.30 5.10 -5.0 3.40 10.2 0.50 2.30 5.90 -1.37 -10.51 4.43 4.64 1.90 5.30 10.0 7.30 -7.4 6.10 8.50 0.30 4.10 7.80 4.70 -13.1 0.80 4.90 3.50 5.85 5.19 -0.59 3.40 4.38 4.50 4.40 1996 ～ 1999 平均 A 5.694.101.135.524.001.95-0.394.000.053.46 2000 ～ 2002 平均 B 2.422.171.103.076.234.333.914.303.974.42 B-A -3.27-1.93-0.03-2.452.232.384.300.303.920.96 三、當前經濟發展情勢

6. CHAPTER 1 The Science of Macroeconomics slide 5 機 構 項 目 主計處 (2003.11.14) 中研院 (2003.12.18) 中經院 (2003.12.16) 台經院 (2004.1.29) 台綜院 (2003.12.16) 經濟成長率 4.104.35 4.26 4.814.12 民間消費 2.702.93 3.06 2.713.04 固定資本形成 6.276.91 6.39 5.67- 政府部門 1.34 -1.63 1.06 公營事業 0.42 -1.14 民間部門 9.2210.13 8.23 8.048.44 政府消費 0.28 0.990.30 商品及勞務輸出 6.678.40 7.38 9.156.60 商品及勞務輸入 6.608.747.648.936.27 （三） 2004 年的經濟成長預測 ─ 在預期全球景氣轉佳的情況下， 今年台灣的經濟也可望穩步復甦，根據國內各主要研究機構預測 指出，今年我國的經濟成長率在 4.1 ％～ 4.81 ％之間。 資料來源：各機構 三、當前經濟發展情勢

7. CHAPTER 1 The Science of Macroeconomics slide 6 Unemployment and social problems Each one-point increase in the unemployment rate is associated with:  920 more suicides  650 more homicides  4000 more people admitted to state mental institutions  3300 more people sent to state prisons  37,000 more deaths  increases in domestic violence and homelessness

8. CHAPTER 1 The Science of Macroeconomics slide 7 Why learn macroeconomics? 1. The macroeconomy affects society’s well-being.  example: Unemployment and social problems 2. The macroeconomy affects your well-being.  example 1: Unemployment and earnings growth  example 2: Interest rates and mortgage payments

9. CHAPTER 1 The Science of Macroeconomics slide 8 Unemployment and earnings growth

10. CHAPTER 1 The Science of Macroeconomics slide 9 Interest rates and mortgage payments For a $150,000 30-year mortgage: $11,782$9816.84%Dec 2001 $12,771$10647.65% Dec 2000 annual payment monthly payment actual rate on 30-year mortgage date

11. CHAPTER 1 The Science of Macroeconomics slide 10 Inflation and Unemployment in Election Years year U rate inflation rate elec. outcome 19767.7%5.8%Carter (D) 19807.1%13.5%Reagan (R) 19847.5%4.3%Reagan (R) 19885.5%4.1%Bush I (R) 19927.5%3.0%Clinton (D) 19965.4%3.3%Clinton (D) 20004.0%3.4%Bush II (R)

12. CHAPTER 1 The Science of Macroeconomics slide 11 Prices: Flexible Versus Sticky  Market clearing: an assumption that prices are flexible and adjust to equate supply and demand.  In the short run, many prices are sticky--- they adjust only sluggishly in response to supply/demand imbalances. For example, –labor contracts that fix the nominal wage for a year or longer –magazine prices that publishers change only once every 3-4 years

13. CHAPTER 1 The Science of Macroeconomics slide 12 Prices: Flexible Versus Sticky  The economy’s behavior depends partly on whether prices are sticky or flexible:  If prices are sticky, then demand won’t always equal supply. This helps explain –unemployment (excess supply of labor) –the occasional inability of firms to sell what they produce  Long run: prices flexible, markets clear, economy behaves very differently.