Macro goals. concepts, measurement.pdf

8/14/2019 Macro goals. concepts, measurement.pdf

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Scott Gilbert

Introduction to Macroeconomics

Part I: Concepts, Goals, and Measurement

Macroeconomic Concepts

1. national and global economies

- prosperity, poverty, progress

2. macroeconomics: the science of prosperity

3. features of the macroeconomy

- goods and services

- players: households, firms, government policy-makers

rational behavior, interaction

- resources: land, labor, capital, technology, entrepreneurship

- institutions: market economy vs. socialism

financial system: money and banking, funds markets

political and legal systems

democracy, freedom, rights, regulation

economic policy and intervention

- time: dynamics: trends, cycles

uncertainty, prediction

4. production

- resources, productivity

role of labor and capital - efficiency, capacity utilization

- allocation, opportunity cost, frontier

- role of institutions: private vs. public production

5. distribution

- who gets what? workers vs. capitalists, young vs. old

- markets and opportunity, competition, meritocracy

- national vs. global distribution

- government influence: taxes, transfers

6. 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 flow


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Macroeconomic Goals

1. prosperity: income and wealth

income distribution, typical income

wealth: current and future incomes

standard of living

consumptionhealth and longevity, literacy

family, community, leisure time

2. progress: economic growth, innovation, investment, capital accumulation

3. opportunity: full employment, enterprise, economic freedom

4. financial stability: money and banking

prices: inflation and deflation

funds: availability, cost, interest rates

Macroeconomic Measurement

1. income and output: national income

sources of income

disposable income

taxes, transfers, national income

income per capita

real income, inflation adjustment

output: gross domestic product (GDP)

types of output:

consumption, govertnment expenditures,

private investment, net exports

GDP per capita

real GDP, inflation adjustment

economic growth rate: growth in real GDP

trends and cycles in income and output

potential output

fluctuation and the business cycle

predicting output: Index of Leading Economic Indicators

2. wealth: market value of assets

household wealth: sources, distribution, trends

3. employment: employed, unemployed, labor force, unemployment rate

types and duration of unemployment

unemployment and the business cycle


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4. standard of living: real disposable income per capita

real GDP per capita

Human Development Index (HDI)

5. economic freedom: Index of Economic Freedom

6. consumer prices: Consumer Price Index (CPI)

inflation in consumer prices

using CPI to compute real wages and interest rates

7. international: 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

Documents

Macro goals. concepts, measurement.pdf