Macroeconomics: Theories and Policies, 10th edition

For courses in Intermediate Macroeconomics.

Macroeconomics traces the history, evolution, and challenges of Keynesian economics, presenting a comprehensive, detailed, and unbiased view of modern macroeconomic theory.

• The financial crisis and deep recession of 2007-09 were the most serious macroeconomic shocks to hit the world economy since the Great Depression. The discussion of the theoretical models in Parts Two and Three of the book has been revised to reflect this experience. Many examples have been added to show how the models explain recent events. The way the crisis and deep recession affect an evaluation of the different macroeconomic theories is examined.
• Chapters in Part Five on Economic Policy have been extended to consider policy responses to the financial crisis and recession. Throughout the book major policy initiatives are described and evaluated.
• Chapters 16 and 17 have been revised to include more detail on banks and other parts of the financial sector. The freezing up of credit markets during the financial crisis is explained within the context of deposit and credit creation. Material has been added on the new monetary policy instruments and initiatives that come under the heading of quantitative easing. The zero-bound problem that led to the need for these new policy initiatives is explained.
• Chapter 14 on the open economy includes an updated discussion of the evolution of current account imbalances over the 2007-11 period and new coverage of the European sovereign debt crisis.
• The discussion of fiscal policy in chapter 18 now includes material on the United States public debt. The debt burden issue is considered.
• New Perspectives boxes have been added and others expanded on topics including: the efficient markets hypothesis of asset pricing, the fiscal stimulus program (ARRA) of 2009, European bond interest rates, the financial sector in the Keynesian model, and the sequence of events during the recent financial crisis.