Macroeconomics, Global Edition, 6th edition

For courses in undergraduate Macroeconomics courses.

A modern approach to teaching macroeconomics

Macroeconomics uses a thoroughly modern approach by building macroeconomic models from microeconomic principles. As such, it is consistent with the way that macroeconomic research is conducted today. This approach allows for deeper insights into economic growth processes and business cycles–the key topics in macroeconomics. An emphasis on microeconomic foundations better integrates the study of macroeconomics with approaches learned in microeconomics and field courses in economics. By following an approach to macroeconomics that is consistent with current macroeconomic research, students become better prepared for advanced study in economics.

The 6th Edition captures the latest developments in macroeconomic thinking, applied to recent economic events and developments in macroeconomic policy. With the financial crisis receding, new challenges that macroeconomists and policymakers currently need to address are covered in the text.

Hallmark Features

• A modern approach has students build macroeconomic models from microeconomic principles and is consistent with the way macroeconomic research is conducted today. Advantages for students:
• Allows deeper insights into economic growth processes and business cycles, which are the key topics in macroeconomics.
• Better integrates the study of macroeconomics with what will be covered in economics and microeconomics courses.
• Helps students better prepare for advanced study in economics.
• Real-world applications give students insider insight. It's important for students to not only learn the principles and theories, but to also understand how they apply to the real world–and their future careers. This text contains features that encourage students to put theory into real-world practice:
• Theory Confronts the Data feature brings macroeconomic theory to life by having students match the characteristics of real-world economic data.
• Macroeconomics in Action feature relates real-world applications to theory, summarizes ideas from front-line research in macroeconomics and the history of economic thought, and aids students in understanding core material.
• Perspectives on the Financial Crisis boxes use the theoretical frameworks in the text to present information on the recent worldwide financial crisis and its implications for the 2008-09 recession.
• A comprehensive art program shows concepts in action. Graphs and charts are plentiful in this text, helping students to see the concepts in action. The visual representations of macroeconomic models in this text can also be manipulated to derive important results and show key features of important macro data in applications.
• End-of-chapter summaries make studying and retention easier. Each chapter wraps up with an easy-to-read summary of the key ideas contained in the chapter, followed by a glossary of key terms. The terms are also highlighted in bold where they appear within the chapter so that students can revisit the definitions in context.
• NEW! End-of-chapter questions and problems relate directly to ideas and facts covered in the chapter and are intended to challenge students' proficiency.
• Working with the Data sections at the end of each chapter help students to use the FRED database, provided by the Federal Reserve Bank of St. Louis.

New and Updated Features

• The Search and Unemployment chapter has been revised to include a section on the “one-sided search model,” an approach to modeling the behavior of the unemployed. This model determines the reservation wage for an unemployed worker, and shows how unemployment benefits, job offer rates, and separations determine the unemployment rate.
• The Money, Banking, Prices, and Monetary Policy chapter includes a new section about unconventional monetary policy and the zero lower bound. Unconventional policies include quantitative easing and negative nominal interest rates.
• Section on business cycle theories, as they relate to the 2008-2009 recession in particular, has been added.
• Material on how New Keynesian models fit the data and on the liquidity trap features in chapter 14.
• Chapter on inflation within a New Keynesian framework, and its causes. A basic New Keynesian model shows how monetary policy is conducted, in conventional circumstances, and when the zero lower bound on the nominal interest rate is a problem. The chapter discusses how secular stagnation or world savings gluts can lead to low real interest rates, and zero lower bound monetary policies. Finally, a dynamic New Keynesian rational expectations model is used to introduce Neo-Fisherism.
• New Theory Confronts the Data features include information on government expenditure multipliers in the recovery from the 2008-2009 recession, The Phillips Curve, and Greece and sovereign default.
• Macroeconomics in Action features include sections on default on government debt, social security and incentives, and quantitative easing in the United States.
• Data figures have been revised to include the most recent data.