Macroeconomics

Features

• Experienced and Respected Author: Brad DeLong attained a B.S. and Ph.D. at Harvard. He taught there for 5 years before moving to the University of California-Berkeley. He is coeditor of The Journal of Economic Perspectives, a visiting scholar at the Federal Reserve Board of San Francisco, and a Research Associate at the National Bureau of Economic Research. He has written over 100 research articles and from 1993 to 1995 served as Deputy Assistant Secretary for Economic Policy for the United States Department of the Treasury.
• Modern, Brief, and Less Math: DeLong streamlines the presentation of older topics, such as the relative slopes of the IS and LM curves, in order to dedicate more space to the more current and relevant topics being researched and discussed today. The book's relatively brief length allows for a better student focus on these important concepts. The author also simplifies and minimizes the amount of mathematics.
• Policy Emphasis: DeLong provides extensive insight into the major policy issues of the day. He does this by the extensive use of policy examples and by drawing on his own real-world, policy-making experience. This policy focus makes macroeconomics come alive for students by allowing them to make connections between concepts in the course and the impact of policy decisions on the “real” economy.
• Historical Perspective: DeLong, by calling upon his personal interest and extensive research into economic history, offers a broad historical perspective not available in other intermediate macroeconomic texts. He discusses not only the current structure of the macroeconomy, but how it has evolved and what is likely to happen in both the short and the long run.
• Improved Coverage of the Facts and Theory of Long-Run Growth: DeLong provides a more easily grasped presentation of the fairly complex “Solow model” by avoiding the “dumbed down” methodology used by many books. Instead he carefully builds, step-by-step, the basic theoretical concepts that often confuse undergraduates (e.g., the idea of a steady-state equilibrium growth path). The theory chapter is followed by one offering a broad cross-country, historical perspective of industrialization, the East Asian Miracle, and the American Century.
• Integrated International Focus: DeLong integrates material on the international economy into the standard macro framework¿from the beginning and throughout the text. He accomplishes this (1) by repeatedly comparing and contrasting the U.S. economy with the rest of the world and (2) by incorporating international capital flows and trade deficits into the basic full-employment model from the very beginning of the long-run business cycle coverage. Students will readily see that U.S. economic policy issues have important international dimensions.
• Deals with interest rates, not money stocks: Delong believes that, because central banks today set interest rates and not money stocks, the LM curve's underlying assumption that the money stock is fixed is artificial. And conducting much of the discussion of the determination of real GDP in a framework in which the money stock is fixed gives students the wrong intuitions. The LM curve cannot be eliminated, but it can be downplayed in order to focus on the key factors of the position of the IS curve and the real interest rate, which is determined by the term structure and central bank policy. This brings the presentation in the textbook much closer to what the students will find when they open up their Wall Street Journals.
• Focuses on the Inflation Rate¿not on the AS-AD diagram. DeLong believes that the variable on the vertical axis of the Aggregate Supply-Aggregate Demand graph¿the price level¿is not the best variable to use in analyzing economic policy. The best price variable is the one on the vertical axis of the Phillips curve, the inflation rate. A very close integration of the AS-AD framework with the Phillips curve helps students follow the thread of the argument better and saves an enormous amount of repetition. And because the Phillips curve “is” the AS curve, with a couple of changes of variables, no point is served by considering them separately, in different chapters.

Part I Preliminaries

1 Introduction to Macroeconomics

2 Measuring the Macroeconomy

3 Thinking Like an Economist

Part II Long-Run Economic Growth

4 The Theory of Economic Growth

5 The Reality of Economic Growth: History and Prospect

Part III Flexible-Price Macroeconomics

6 The Flexible-Price Framework: Building Blocks

7 The Flexible-Price Framework: Equilibrium

8 Money, Prices, and Inflation

Part IV Sticky-Price Macroeconomics

9 The Income-Expenditure Framework: Consumption and the Multiplier

10 Investment, Net Exports, and Interest Rates

11 The Money Stock, Aggregate Demand, and Aggregate Supply

12 The Phillips Curve and Expectations

Part V Macroeconomic Policy

13 Stabilization Policy

14 The Budget Balance, the National Debt, and Investment

15 International Economic Policy

16 Changes in the Macroeconomy and Changes in Macroeconomic Policy

17 The Future of Macroeconomics Epilogue