Macroeconomics

Synopsis

Blanchard Presents A Unified And Global View Of Macroeconomics, Enabling Students To See The Connections Between The Short-run, Medium-run, And Long-run. Note Continued: 16-3. Deficit Reduction, Expectations, And Output -- The Role Of Expectations About The Future -- Back To The Current Period -- The Open Economy -- Ch. 17 Openness In Goods And Financial Markets -- 17-1. Openness In Goods Markets -- Exports And Imports -- The Choice Between Domestic Goods And Foreign Goods -- Nominal Exchange Rates -- From Nominal To Real Exchange Rates -- From Bilateral To Multilateral Exchange Rates -- 17-2. Openness In Financial Markets -- The Balance Of Payments -- The Choice Between Domestic And Foreign Assets -- Interest Rates And Exchange Rates -- 17-3. Conclusions And A Look Ahead -- Ch. 18 The Goods Market In An Open Economy -- 18-1. The Is Relation In The Open Economy -- The Demand For Domestic Goods -- The Determinants Of C, I, And G -- The Determinants Of Imports -- The Determinants Of Exports -- Putting The Components Together -- 18-2 Equilibrium Output And The Trade Balance -- 18-3. Increases In Demand[—]domestic Or Foreign -- Increases In Domestic Demand -- Increases In Foreign Demand -- Fiscal Policy Revisited -- 18-4. Depreciation, The Trade Balance, And Output -- Depreciation And The Trade Balance: The Marshall-lerner Condition -- The Effects Of A Real Depreciation -- Combining Exchange Rate And Fiscal Policies -- 18-5. Looking At Dynamics: The J-curve -- 18-6. Saving, Investment, And The Current Account Balance -- Appendix: Derivation Of The Marshall-lerner Condition -- Ch. 19 Output, The Interest Rate, And The Exchange Rate -- 19-1. Equilibrium In The Goods Market -- 19-2. Equilibrium In Financial Markets -- Domestic Bonds Versus Foreign Bonds -- 19-3. Putting Goods And Financial Markets Together -- 19-4. The Effects Of Policy In An Open Economy -- The Effects Of Monetary Policy In An Open Economyg18-2 The Effects Of Fiscal Policy In An Open Economy -- 19-5. Fixed Exchange Rates -- Pegs, Crawling Pegs, Bands, The Ems, And The Euro -- Monetary Policy When The Exchange Rate Is Fixed -- Fiscal Policy When The Exchange Rate Is Fixed -- Appendix: Fixed Exchange Rates, Interest Rates, And Capital Mobility -- Ch. 20 Exchange Rate Regimes -- 20-1. The Medium Run -- The Is Relation Under Fixed Exchange Rates -- Equilibrium In The Short And The Medium Run -- The Case For And Against A Devaluation -- 20-2. Exchange Rate Crises Under Fixed Exchange Rates -- 20-3. Exchange Rate Movements Under Flexible Exchange Rates -- Exchange Rates And The Current Account -- Exchange Rates And Current And Future Interest Rates -- Exchange Rate Volatility -- 20-4. Choosing Between Exchange Rate Regimes -- Common Currency Areas -- Hard Pegs, Currency Boards, And Dollarization -- Appendix 1: Deriving The Is Relation Under Fixed Exchange Rates Appendix 2: The Real Exchange Rate And Domestic And Foreign Real Interest Rates -- Back To Policy -- Ch. 21 Should Policy Makers Be Restrained? -- 21-1. Uncertainty And Policy -- How Much Do Macroeconomists Actually Know? -- Should Uncertainty Lead Policy Makers To Do Less? -- Uncertainty And Restraints On Policy Makers -- 21-2. Expectations And Policy -- Hostage Takings And Negotiations -- Inflation And Unemployment Revisited -- Establishing Credibility -- Time Consistency And Restraints On Policy Makers -- 21-3. Politics And Policy -- Games Between Policy Makers And Voters -- Games Between Policy Makers -- Politics And Fiscal Restraints -- Ch. 22 Fiscal Policy: A Summing Up -- 22-1. What We Have Learned -- 22-2. The Government Budget Constraint: Deficits, Debt, Spending, And Taxes -- The Arithmetic Of Deficits And Debt -- Current Versus Future Taxes -- The Evolution Of The Debt-to-gdp Ratio -- 22-3 Rates Ricardian Equivalence, Cyclical Adjusted Deficits, And War Finance -- Ricardian Equivalence -- Deficits, Output Stabilization, And The Cyclically Adjusted Deficit -- Wars And Deficits -- 22-4. The Dangers Of High Debt -- High Debt, Default Risk, And Vicious Cycles -- Debt Default -- Money Finance -- Ch. 23 Monetary Policy: A Summing Up -- 23-1. What We Have Learned -- 23-2. From Money Targeting To Inflation Targeting -- Money Targeting -- Inflation Targeting -- The Interest Rate Rule -- 23-3. The Optimal Inflation Rate -- The Costs Of Inflation -- The Benefits Of Inflation -- The Optimal Inflation Rate: The State Of The Debate -- 23-4. Unconventional Monetary Policy -- 23-5. Monetary Policy And Financial Stability -- Liquidity Provision And Lender Of Last Resort -- Macroprudential Tools -- Ch. 24 Epilogue: The Story Of Macroeconomics -- 24-1. Keynes And The Great Depression -- 24-2. The Neoclassical Synthesis Progress On All Fronts -- Keynesians Versus Monetarists -- 24-3. The Rational Expectations Critique -- The Three Implications Of Rational Expectations -- The Integration Of Rational Expectations -- 24-4. Developments In Macroeconomics Up To The 2009 Crisis -- New Classical Economics And Real Business Cycle Theory -- New Keynesian Economics -- New Growth Theory -- Toward An Integration -- 24-5. First Lessons For Macroeconomics After The Crisis. Machine Generated Contents Note: Introduction -- Ch. 1 A Tour Of The World -- 1-1. The Crisis -- 1-2. The United States -- Low Interest Rates And The Zero Lower Bound -- How Worrisome Is Low Productivity Growth? -- 1-3. The Euro Area -- Can European Unemployment Be Reduced? -- What Has The Euro Done For Its Members? -- 1-4. China -- 1-5. Looking Ahead -- Appendix: Where To Find The Numbers -- Ch. 2 A Tour Of The Book -- 2-1. Aggregate Output -- Gdp: Production And Income -- Nominal And Real Gdp -- Gdp: Level Versus Growth Rate -- 2-2. The Unemployment Rate -- Why Do Economists Care About Unemployment? -- 2-3. The Inflation Rate -- The Gdp Deflator -- The Consumer Price Index -- Why Do Economists Care About Inflation? -- 2-4. Output, Unemployment, And The Inflation Rate: Okun's Law And The Phillips Curve -- Okun's Law -- The Phillips Curve -- 2-5. The Short Run, The Medium Run, And The Long Run -- 2-6 A Tour Of The Book -- The Core -- Extensions -- Back To Policy -- Epilogue -- Appendix: The Construction Of Real Gdp And Chain-type Indexes -- The Short Run -- Ch. 3 The Goods Market -- 3-1. The Composition Of Gdp -- 3-2. The Demand For Goods -- Consumption (c) -- Investment (i) -- Government Spending (g) -- 3-3. The Determination Of Equilibrium Output -- Using Algebra -- Using A Graph -- Using Words -- How Long Does It Take For Output To Adjust? -- 3-4. Investment Equals Saving: An Alternative Way Of Thinking About Goods-market Equilibrium -- 3-5. Is The Government Omnipotent? A Warning -- Ch. 4 Financial Markets I -- 4-1. The Demand For Money 68 Deriving The Demand For Money -- 4-2. Determining The Interest Rate: I -- Money Demand, Money Supply, And The Equilibrium Interest Rate -- Monetary Policy And Open Market Operations -- Choosing Money Or Choosing The Interest Rate? -- 4-3^and The Long Run -- 2-6 Determining The Interest Rate: Ii -- What Banks Do -- The Demand And Supply For Central Bank Money -- The Federal Funds Market And The Federal Funds Rate -- 4-4. The Liquidity Trap -- Appendix: The Determination Of The Interest Rate When People Hold Both Currency And Checkable Deposits -- Ch. 5 Goods And Financial Markets; The Is-lm Model -- 5-1. The Goods Market And The Is Relation -- Investment, Sales, And The Interest Rate -- Determining Output -- Deriving The Is Curve -- Shifts Of The Is Curve -- 5-2. Financial Markets And The Lm Relation -- Real Money, Real Income, And The Interest Rate -- Deriving The Lm Curve -- 5-3. Putting The Is And The Lm Relations Together -- Fiscal Policy -- Monetary Policy -- 5-4. Using A Policy Mix -- 5-5. How Does The Is-lm Model Fit The Facts? -- Ch. 6 Financial Markets Ii: The Extended Is-lm Model -- 6-1. Nominal Versus Real Interest Rates^^^rate? -- 4-3^and The Long Run -- 2-6 Nominal And Real Interest Rates In The United States Since 1978 -- Nominal And Real Interest Rates: The Zero Lower Bound And Deflation -- 6-2. Risk And Risk Premia -- 6-3. The Role Of Financial Intermediaries -- The Choice Of Leverage -- Leverage And Lending -- 6-4. Extending The Is-lm -- Financial Shocks And Policies -- 6-5. From A Housing Problem To A Financial Crisis -- Housing Prices And Subprime Mortgages -- The Role Of Financial Intermediaries -- Macroeconomic Implications -- Policy Responses -- The Medium Run -- Ch. 7 The Labor Market -- 7-1. A Tour Of The Labor Market -- The Large Flows Of Workers -- 7-2. Movements In Unemployment -- 7-3. Wage Determination -- Bargaining -- Efficiency Wages -- Wages, Prices, And Unemployment -- The Expected Price Level -- The Unemployment Rate -- The Other Factors -- 7-4. Price Determination -- 7-5. The Natural Rate Of Unemployment -- The Wage-setting Relation The Price-setting Relation -- Equilibrium Real Wages And Unemployment -- 7-6. Where We Go From Here -- Appendix: Wage- And Price-setting Relations Versus Labor Supply And Labor Demand -- Ch. 8 The Phillips Curve, The Natural Rate Of Unemployment, And Inflation -- 8-1. Inflation, Expected Inflation, And Unemployment -- 8-2. The Phillips Curve And Its Mutations -- The Early Incarnation -- The Apparent Trade-off And Its Disappearance -- 8-3. The Phillips Curve And The Natural Rate Of Unemployment -- 8-4. A Summary And Many Warnings -- Variations In The Natural Rate Across Countries -- Variations In The Natural Rate Over Time -- High Inflation And The Phillips Curve Relation -- Deflation And The Phillips Curve Relation -- Appendix: Derivation Of The Relation To A Relation Between Inflation, Expected Inflation, And Unemployment -- Ch. 9 From The Short To The Medium Run: The Is-lm-pc Model -- 9-1. The Is-lm-pc Model -- 9-2ation Dynamics And The Medium Run Equilibrium -- The Role Of Expectations Revisited -- The Zero Lower Bound And Debt Spirals -- 9-3. Fiscal Consolidation Revisited -- 9-4. The Effects Of An Increase In The Price Of Oil -- Effects On The Natural Rate Of Unemployment -- 9-5. Conclusions -- The Short Run Versus The Medium Run -- Shocks And Propagation Mechanisms -- The Long Run -- Ch. 10 The Facts Of Growth -- 10-1. Measuring The Standard Of Living -- 10-2. Growth In Rich Countries Since 1950 -- The Large Increase In The Standard Of Living Since 1950 -- The Convergence Of Output Per Person -- 10-3. A Broader Look Across Time And Space -- Looking Across Two Millennia -- Looking Across Countries -- 10-4. Thinking About Growth: A Primer -- The Aggregate Production Function -- Returns To Scale And Returns To Factors -- Output Per Worker And Capital Per Worker -- The Sources Of Growth -- Ch. 11the Is-lm-pc Model -- 9-2ation Saving, Capital Accumulation, And Output -- 11-1. Interactions Between Output And Capital -- The Effects Of Capital On Output -- The Effects Of Output On Capital Accumulation -- Output And Investment -- Investment And Capital Accumulation -- 11-2. The Implications Of Alternative Saving Rates -- Dynamics Of Capital And Output -- The Saving Rate And Output -- The Saving Rate And Consumption -- 11-3. Getting A Sense Of Magnitudes -- The Effects Of The Saving Rate On Steady-state Output -- The Dynamic Effects Of An Increase In The Saving Rate -- The U.s. Saving Rate And The Golden Rule -- 11-4. Physical Versus Human Capital -- Extending The Production Function -- Human Capital, Physical Capital, And Output -- Endogenous Growth -- Appendix: The Cobb-douglas Production Function And The Steady State -- Ch. 12 Technological Progress And Growth -- 12-1. Technological Progress And The Rate Of Growth^^^e Is-lm-pc Model -- 9-2ation Technological Progress And The Production Function -- Interactions Between Output And Capital -- Dynamics Of Capital And Output -- The Effects Of The Saving Rate -- 12-2. The Determinants Of Technological Progress -- The Fertility Of The Research Process -- The Appropriability Of Research Results -- Management, Innovation, And Imitation -- 12-3. Institutions, Technological Progress, And Growth -- 12-4. The Facts Of Growth Revisited -- Capital Accumulation Versus Technological Progress In Rich Countries Since 1985 -- Capital Accumulation Versus Technological Progress In China -- Appendix: Constructing A Measure Of Technological Progress -- Ch. 13 Technological Progress: The Short, The Medium, And The Long Run -- 13-1. Productivity, Output, And Unemployment In The Short Run -- The Empirical Evidence -- 13-2. Productivity And The Natural Rate Of Unemployment -- Price Setting And Wage Setting Revisited^^^s-lm-pc Model -- 9-2ation The Natural Rate Of Unemployment -- The Empirical Evidence -- 13-3. Technological Progress, Churning, And Inequality -- The Increase In Wage Inequality -- The Causes Of Increased Wage Inequality -- Inequality And The Top 1% -- Expectations -- Ch. 14 Financial Markets And Expectations -- 14-1. Expected Present Discounted Values -- Computing Expected Present Discounted Values -- A General Formula -- Using Present Values: Examples -- Constant Interest Rates -- Constant Interest Rates And Payments -- Constant Interest Rates And Payments Forever -- Zero Interest Rates -- Nominal Versus Real Interest Rates And Present Values -- 14-2. Bond Prices And Bond Yields -- Bond Prices As Present Values -- Arbitrage And Bond Prices -- From Bond Prices To Bond Yields -- Reintroducing Risk -- Interpreting The Yield Curve -- 14-3. The Stock Market And Movements In Stock Prices -- Stock Prices As Present Values^^^pc Model -- 9-2ation The Stock Market And Economic Activity -- A Monetary Expansion And The Stock Market -- An Increase In Consumer Spending And The Stock Market -- 14-4. Risk, Bubbles, Fads, And Asset Prices -- Stock Prices And Risk -- Asset Prices, Fundamentals, And Bubbles -- Appendix: Deriving The Expected Present Discounted Value Using Real Or Nominal Interest Rates -- Ch. 15 Expectations, Consumption, And Investment -- 15-1. Consumption -- The Very Foresighted Consumer -- An Example -- Toward A More Realistic Description -- Putting Things Together: Current Income, Expectations, And Consumption -- 15-2. Investment -- Investment And Expectations Of Profit -- Depreciation -- The Present Value Of Expected Profits -- The Investment Decision -- A Convenient Special Case -- Current Versus Expected Profit -- Profit And Sales -- 15-3. The Volatility Of Consumption And Investment^^^ices -- Stock Prices As Present Values^^^pc Model -- 9-2ation Appendix: Derivation Of The Expected Present Value Of Profits Under Static Expectations -- Ch. 16 Expectations, Output, And Policy -- 16-1. Expectations And Decisions: Taking Stock -- Expectations, Consumption, And Investment Decisions -- Expectations And The Is Relation -- 16-2. Monetary Policy, Expectations, And Output -- Monetary Policy Revisited Olivier Blanchard. Includes Bibliographical References And Index.