Macroeconomics

MACROECONOMICS BY Roger E. A. Farmer Department of Economics UCLA 405 Hilgard Avenue Los Angeles CA 90024 [email protected] September, 97  Roger E. A. Farmer 1997. This is an incomplete and preliminary draft. You may reproduce the material for personal use for a limited time only. Instructors may circulate the material for classroom use after obtaining the written permission of the author. Macroeconomics by Roger E. A. Farmer Part 1: Introduction And Measurement 1. 2. 3. What this Book is About Measuring the Economy Macroeconomic Facts Part 2: The Classical Approach to Aggregate Demand and Supply 4. The Theory of Aggregate Supply 5. Inflation and Aggregate Demand 6. Saving and Investment Part 3: The Modern Approach to Aggregate Demand and Supply 7. 8. 9. 10. 11. Unemployment and Labor Market Frictions The Demand for Money The Supply of Money The IS-LM Model and Aggregate Demand The Open Economy Part 4: Dynamic Macroeconomics 12. 13. 14. 15. 16. Debt, Deficits and Economic Dynamics The Neoclassical Theory of Growth The Endogenous Theory of Growth Unemployment, Inflation and Growth Expectations and Macroeconomics Part 5: Conclusion 17. What we Know and what we Don’t Know Roger E. A. Farmer Macroeconomics, December, 97 What’s in Each Part? Part 1: Introduction and Measurement Part 1 consists of 3 chapters. Chapter 1 introduces three major questions that we will study in the rest of the book. 1) Why has GDP per person grown at an average rate of 1.6% per year since 1890? 2) Why does GDP per person fluctuate aro