Dr. Kevin Klein - Professor of Economics

Textbook Table of Contents

Coverpage
Half title page
Title page
Copyright page
Dedication
Brief Contents
Contents
Acknowledgments
To the Student
To the Teacher
Part I: Introduction
1.1 The Problems of Macroeconomics
1.2 What Is Macroeconomics?
1.2.1 Macroeconomics Defined
1.2.2 The Origins of Macroeconomics
1.2.3 Positive versus Normative Macroeconomics
1.3 Doing Macroeconomics
1.3.1 Macroeconomics as a Science
Social Sciences versus Natural Sciences
Rational Behavior
Observation versus Controlled Experiments
1.3.2 Models and Maps
Models as Maps
Mathematical Models
The Uses of Models
The Scope of Models
Graphical or Diagrammatic Models
1.4 Where Do We Go from Here?
Part II: The National Accounts
2.1 How Big Is the Economy?
2.2 GDP and the Economic Process
2.2.1 Stocks and Flows
2.2.2 The Circular Flow
The Domestic Private Sector
Investment Savings, Capital, and Time
The Government Sector
The Foreign Sector
A Bird's-Eye View of the Economy
2.3 The National Accounting Identities
2.3.1 The Production-Expenditure Identity
2.3.2 The Disposable-Income Identity
2.3.3 The Sectoral-Deficits Identity
2.3.4 The Inflow-Outflow Identity
Box 2.1. The Twin-Deficits Problem and the Sectoral-Deficits Identity
2.4 Real Gross Domestic Product
2.4.1 Real and Nominal Quantities
2.4.2 Converting Nominal to Real GDP
2.4.3 International GDP Comparisons
2.4.4 Population and Real per Capita GDP
2.5 GDP through Time
2.5.1 Visualizing Growth 1: Growth Rates
2.5.2 Visualizing Growth 2: Logarithmic Graphs
2.6 Measuring Inflation
2.6.1 Inflation and Deflation
2.6.2 Measuring Inflation Using the GDP Deflator
2.7 Economic Behavior and the National Accounts: Aggregate Demand and Supply – A Prelude to Later Chapters
3.1 What Is a Final Product?
3.1.1 Quid Pro Quo
3.1.2 Final and Intermediate Products
3.1.3 Existing Goods
3.2 Product and Income
3.3 Domestic versus National Product
3.4 Depreciation and Net Product
3.5 Limits, Judgments, and Puzzles
3.5.1 Investment or Consumption?
3.5.2 Nonmarket Production
Home Production
The Third-Party Test
Owner-Occupied Housing
Government Services
3.5.3 The Black Economy
3.5.4 Bads and Regrettables
3.5.5 GDP and Welfare
3.6 Measuring GDP
3.6.1 Sources and Methods
3.6.2 Revisions
3.6.3 Annualization and Seasonal Adjustment
3.7 Putting It All Together: Reading the NIPAs
3.7.1 The National-Income-and-Product Account
3.7.2 The Personal-Income-and-Outlay Account
3.7.3 Three Sectors, Three Deficits
4.1 Constructing Price Indices
4.1.1 The Laspeyres (or Base-Weighted) Index
4.1.2 The Paasche (or Current-Weighted) Index
4.1.3 The Fisher-Ideal Index
4.1.4 The Chain-Weighted Index
4.1.5 Price Indices and Real GDP
4.1.6 The Implicit Price Deflator
4.2 Alternative Price Indices
4.2.1 The Consumer Price Index (CPI)
4.2.2 The Personal Consumption Expenditure Deflator
4.2.3 The Producer Price Index (PPI)
4.3 Core Inflation
4.3.1 The Core Rate of Inflation
4.3.2 The Weighted-Median CPI
Part III: Trends and Cycles
5.1 Decomposing Time Series
5.2 The Business Cycle
5.2.1 The Language of Business Cycles
5.2.2 Dating the Business Cycle
5.2.3 The Typical Business Cycle
5.3 The Business Cycle and the Economy
5.3.1 What Causes the Business Cycle?
5.3.2 The Classification of Economic Indicators
5.3.3 Is the Business Cycle Predictable?
Part IV: Financial Markets
6.1 The Financial System and the Real Economy
6.1.1 The Role of Money and Finance
Real Flows and Financial Flows
The Monetary Economy
Financial Instruments and Financial Intermediaries
The Flow of Funds
6.1.2 The Flow of Funds Accounts
Real and Financial Wealth
Accounting and Balance Sheets
Flow Accounts
The Assets-and-Liabilities Accounts
6.2 Principles of Valuation
6.2.1 Present Value
The Principle of Similarity and Replacement
Two Key Concepts: Opportunity Cost and Present Value
Four Properties of Present Value
6.2.2 Real and Nominal Value
A Useful Approximation
The Ex Ante versus the Ex Post Real Rate
6.3 The Main Financial Instruments
6.3.1 Debt
What Are Bonds?
The Mechanics of Bond Pricing
Types of Bonds
Prices and Yields
6.3.2 Money
6.3.3 Equity
What Are Stocks?
The Mechanics of Stock Pricing
Stock Prices and Yields
Stock Market Indices
6.4 Financial Markets and Aggregate Demand
7.1 Five Questions about Interest Rates
7.2 The Market for Financial Assets
7.2.1 Substitution and Arbitrage
Similarity and Replacement Again
Supply and Demand
Reaching Equilibrium in a Financial Market
Arbitrage
7.2.2 Efficient Markets
Inside and Outside Views of Financial Markets
The Efficient-Markets Hypothesis
Challenges to the Efficient-Markets Hypothesis
Two Answers
7.3 Risk
7.3.1 Default Risk
Risk and Return
Federal Government Bonds
Rating Risk
Default Risk and Interest Rates
7.3.2 Price or Interest-Rate Risk
7.4 The Term Structure of Interest Rates
7.4.1 The Relationship of Interest Rates of Different Maturities
7.4.2 The Expectations Theory of the Term Structure
Arbitrage across Different Maturities
Expectations and the Shape of the Yield Curve
Alternative Portfolio Strategies
Implicit Expectations
7.4.3 The Role of Risk
7.5 Inflation and Interest Rates
7.5.1 The Effect of Inflation on the Supply and Demand for Bonds
7.5.2 The Fisher Effect and the Fisher Hypothesis
Box 7.1. Measuring Expected Inflation
7.6 The Level of Real Interest Rates
7.6.1 Monetary Policy and Short Rates
7.6.2 Arbitrage to Real Returns
7.7 The Five Questions about Interest Rates Revisited
Appendix: The LM Curve
7.A.1 Money Supply and Money Demand
The Real Supply of Money
Transactions Demand for Money
Money Demand and Interest Rates
The Money Demand and Supply Curves
7.A.2 The LM Curve
Deriving the LM Curve
What Shifts the LM Curve?
What Use Is the LM Curve?
7.A.3 The Limitations of the LM Model
8.1 The Global Economy
8.2 Balance-of-Payments Basics
8.2.1 The Current Account
8.2.2 The Capital Account
8.2.3 The Balance-of-Payments Identities
8.3 Exchange-Rate Basics
8.3.1 Exchange Rates as the Relative Price of Money
The Price of One Currency in Terms of Another
Appreciation and Depreciation
8.3.2 The Real Exchange Rate
The Real Price of a Foreign Good
Purchasing Power and Price Indices
8.3.3 Effective Exchange Rates
8.4 The Foreign Exchange and Financial Markets
8.4.1 The Foreign-Exchange Market
Foreign Exchange and Real Trade
Foreign Exchange and Financial Trade
Direct and Indirect Exchange
8.4.2 Exchange Rates and Relative Prices
The Law of One Price
Purchasing-Power Parity
The Mutual Adjustment of Prices and Exchange Rates
How Well Does Purchasing-Power Parity Work in Practice?
8.4.3 Exchange Rates and Interest Rates
The Exchange Rate, Capital Flows, and Interest Parity
Uncovered Interest Parity
Exchange-Rate Risk
Interest-Rate Differentials and Short-Run Deviations from Purchasing-Power Parity
Interest Parity in Practice
The Limits of Short-Run Exchange Rate Models
Part V: Aggregate Supply
9.1 The Production Decisions of Firms
9.1.1 Production Possibilities
Technology
The Production Function
Measurement Issues
Basic Properties of the Production Function
Returns to Scale
9.1.2 Optimal Production
Profit Maximization
Marginal Products and Factor Prices
Choosing Input Levels
9.2 Aggregate Supply
9.2.1 The Aggregate Production Function
9.2.2 The Cobb-Douglas Production Function
9.2.3 Does the Cobb-Douglas Production Function Provide a Good Model of Aggregate Supply?
The Cobb-Douglas Production Function Predicts Constant Factor Shares
Are Factor Shares Constant?
9.2.4 A Cobb-Douglas Production Function for the United States
9.3 Productivity
9.3.1 Alternative Measures of Productivity
Three Measures
International Comparisons
How Are the Productivity Measures Related?
9.3.2 Technological Progress
Factor Productivity over Time
Factor-Augmenting Technological Progress
9.4 Short-Run and Long-Run Aggregate Supply
9.4.1 Flexible and Inflexible Production Functions
9.4.2 Productivity and Resource Use in the Short Run
9.4.3 Measures of Resource Use
Labor Utilization
Capital Utilization
9.5 Potential Output
9.5.1 The Concept of Economic Potential
9.5.2 Scaled Output
9.6 Aggregate Supply: Questions Answered, Questions Raised
10.1 Why Growth Is Important
10.2 Accounting for Growth
10.2.1 Production at a Point in Time and Production over Time
10.2.2 Decomposing Economic Growth
10.2.3 Accounting for Growth Rates
10.3 The Sources of Economic Growth
10.3.1 Productivity and Technological Progress
Product Innovation
Process Innovation
Research and Development
10.3.2 The Growth of Labor
The Law of Motion of Labor
Malthusianism
Economic Development and the Stabilization of Population
10.3.3 The Growth of Capital
10.4 The Neoclassical Growth Model
10.4.1 The Process of Growth
Balanced Growth without Technological Progress
Balanced Growth with Technological Progress
Unbalanced Growth
Convergence to Balanced Growth
Box 10.1. Relative Prices in the Growth Process
The Speed Limit
10.4.2 The Solow-Swan Growth Model
A Model with Labor-Augmenting Technological Progress
Balanced Growth and Convergence
Is the United States on a Balanced Growth Path?
How Does the Steady State Shift?
10.5 What Accounts for Differences in the Growth of Nations?
10.5.1 Catching Up
The Importance of Technology
The Speed of Convergence
Do Countries Converge?
10.5.2 Which Factors Promote Growth?
10.5.3 Endogenous Growth
10.6 Economic Growth: Achievements and Prospects
11.1 Labor Demand
11.1.1 The Firm's Demand for Labor
Deriving the Firm's Labor-Demand Curve
Factors That Shift the Labor-Demand Curve
11.1.2 The Aggregate Demand for Labor
11.2 Labor Supply
11.2.1 The Worker: Choosing Hours of Work
The Price of Leisure
The Labor-Leisure Choice
The Labor-Supply Curve
Adding Realism: Taxes
Adding Realism: A Standard Workweek
The Individual Labor-Supply Curve in Practice
11.2.2 The Worker: Choosing to Participate
11.2.3 Aggregate Labor Supply
The Aggregate Labor-Supply Curve
The Participation Rate and Average Hours
Is the Labor Supply Stable over Time?
11.3 Labor Market Equilibrium
11.3.1 Market Clearing
11.3.2 Analyzing Ideal Labor Markets
Issue 1. Tax Cuts
Issue 2. Technological Progress and Worker Welfare
Issue 3. Immigration, Jobs, and Real Wages
11.3.3 The Labor Market in Practice
12.1 The Concepts of Employment and Unemployment
12.2 Measuring the Labor Market in Theory and Practice
12.2.1 Labor Market Data
12.2.2 The Unemployment Rate
Mismatched Definitions
Box 12.1. A Jobless Recovery?
Transitional Unemployment
A Real-Wage Floor
Frictional Unemployment
12.2.3 Other Dimensions of Unemployment
Part-Time Employment
Overtime Employment
Loosely Attached Workers
Underemployment
International Comparisons of Underutilization of Labor
12.3 The Labor-Market Process
12.3.1 Why Do Wages Not Fall?
The Unemployment Puzzle
Cutting Wages or Raising Prices
Efficiency Wages
Unions
Government Actions
12.3.2 The Labor-Supply Process
Job Search
Employment Status and Job Flows
The Duration of Unemployment
12.3.3 The Labor-Demand Process
Job Creation and Destruction
Technological Progress and the Reallocation of Labor
Employment Policy
Part VI: Aggregate Demand
13.1 A Simple Model of Aggregate Demand
13.1.1 Consumption Behavior
The Consumption Function
The Shape of the Consumption Function
The Savings Function
13.1.2 Tax Behavior
Net Taxes
The Tax Function
The Shape of the Tax Function
13.1.3 What Determines the Level of Aggregate Demand?
The Model
Equilibrium and Convergence to Equilibrium
The Effect of Changes in Autonomous Expenditure on Aggregate Demand
13.1.4 The Multiplier
The Static Multiplier
A Numerical Example
The Size of the Multiplier
The Multiplier Process
13.2 Fiscal Policy
13.2.1 Discretionary Fiscal Policy
Choosing the Level of Government Spending
Setting Tax Rates
The Balanced-Budget Multiplier
13.2.2 Automatic Stabilizers
13.3 Investment and Aggregate Demand
13.3.1 What Determines the Level of Investment?
The Opportunity Cost of Investment
Investment and Risk
Investment and Finance (and Other Factors)
13.3.2 The Investment Function in Practice
13.3.3 The IS Curve
Deriving the IS Curve
An Increase in Autonomous Spending Shifts the IS Curve to the Right
An Increase in the Rate of Return on Investment Shifts the IS Curve to the Right
An Increase in Marginal Tax Rates Pivots the IS Curve Downward
An Increase in the Marginal Propensity to Save
The IS Curve and the Multipliers
Numerical Examples
13.4 Aggregate Demand and the Current Account
13.4.1 Some Pitfalls
13.4.2 The Behavior of Imports and Exports
13.5 The Limits to Aggregate Demand Management
13.5.1 The Paradox of Thrift
13.5.2 Resource Constraints
Appendix: The IS-LM Model
13.A.1 The LM Curve and Expected Inflation
13.A.2 Working with the IS-LM Model
An Increase in Government Expenditure
An Increase in the Money Supply
An Increase in the Rate of Inflation
13.A.3 The IS-LM Model at Full Employment
PART A. CONSUMPTION
14.1 Simple Consumption Functions and the Real World
14.2 The Permanent-Income/Life-Cycle Hypothesis
14.2.1 Consumption Smoothing
14.2.2 Consumption, Income, and Wealth
14.2.3 The Aggregate Permanent-Income Hypothesis
From the Individual to the Economy as a Whole
How the Permanent-Income Hypothesis Explains the Data
14.2.4 The Permanent-Income Hypothesis and Fiscal Policy
14.3 Borrowing Constraints, Rules of Thumb, and Consumption
Box 14.1. Testing the Permanent-Income Hypothesis:A Natural Experiment
PART B. INVESTMENT
14.4 An Asset-Based View of Capital and Investment
14.4.1 Evaluating an Investment Project
The Present Value of an Investment Project
Internal Rate of Return
Investment and Risk
14.4.2 The Rate of Investment
14.4.3 Investment and the Stock Market
14.5 Aggregate Investment
14.5.1 Factors Governing Aggregate Investment
1. Opportunity Cost
2. Expected Future Profits
3. Risk
4. The Relative Price of Capital Goods
5. The Level of the Capital Stock
14.5.2 The Accelerator
14.5.3 Investment and Fiscal Policy
Part VII: Macroeconomic Dynamics
15.1 The Interaction of Aggregate Supply and Aggregate Demand
15.1.1 Supply Fluctuations
Adjustments to Supply Factors When Wages Are Flexible
Adjustments to Supply Factors When Wages Are Inflexible
Technological Progress and Capital Obsolescence
Cost-Push Inflation
15.1.2 Demand Fluctuations
When Aggregate Demand Falls Short of Aggregate Supply
When Aggregate Demand Exceeds Aggregate Supply
Distinguishing the Types of Inflation
15.2 Unemployment and Output Fluctuations
15.2.1 What Changes the Unemployment Rate?
15.2.2 The Modified Balanced Growth Path
15.2.3 Okun's Law
15.2.4 The Dynamics of Resource Utilization
15.3 Inflation and Unemployment
15.3.1 Pricing Behavior
15.3.2 The Phillips Curve
15.3.3 The Natural Rate of Unemployment and NAIRU
The Concept of the Natural Rate
An Estimate of the Natural Rate of Unemployment
NAIRU and the Formation of Expectations
An Estimate of NAIRU
The Phillips Curve and Resource Utilization
NAIRU and Full Employment
15.3.4 Inflation and Supply Factors
Wage Inflation and Labor Productivity
Supply Shocks
15.3.5 Stagflation and Credibility
15.4 Another Look at the Limits of Demand Management
15.5 Aggregate Supply and Demand: Putting It Together
15.5.1 A Steady State
15.5.2 Shifts in Aggregate Demand
15.5.3 Shifts in Aggregate Supply
Part VIII: Macroeconomic Policy
16.1 Monetary and Fiscal Policy
16.1.1 The Government Budget Constraint
16.1.2 Monetary Policy and the Real Economy
16.2 The Federal Reserve and the Banking System
16.2.1 The Central Bank
Some History
The Structure of the Federal Reserve System
16.2.2 Bank Balance Sheets
The Fed's Balance Sheet
Commercial Bank Balance Sheets
16.2.3 The Mechanics of Monetary Policy
The Classic Federal Funds Market
Open-Market Operations
Open-Mouth Operations
Interest-Bearing Reserves
Discount-Window Policy
Reserve Requirements
16.3 The Opportunity-Cost or Interest-Rate Channel of Monetary Policy
16.3.1 Using Short Rates to Control Long Rates
Scenario 1: A Credible Permanent Change in the Federal-Funds Rate
Scenario 2: The Public Believes the Change in the Federal-Funds Rate Is Temporary
Credibility
16.3.2 Long Rates, Real Rates, Output, and Inflation
A Stable Inflation Rate
A Cumulative Process
The Effective State of Monetary Policy Depends on the State of the Economy
16.4 The Credit Channel
16.4.1 The Narrow Credit Channel
16.4.2 The Broad Credit Channel
16.4.3 The Operation of the Credit Channel
Box 16.1. The Monetary Policy Response to the Financial Crisis of 2008
16.5 The Conduct and Limits of Monetary Policy
16.5.1 The Goals of Monetary Policy
Inflation and Employment
Hot or Cold Monetary Policy
Balancing the Risks
16.5.2 Rules versus Discretion
(i) Ignorance
(ii) Policy Lags
(iii) A Stable Economic Environment
(iv) Time Consistency
16.5.3 How the Federal Reserve Behaves
Discretion or Rules?
The Taylor Rule
Box 16.2. Concepts of Potential Output
Does the Fed Follow a Taylor Rule?
The Limits of the Taylor Rule
16.6 Monetary Policy and International Finance
16.6.1 Controlling the Exchange Rate
Direct Intervention
Foreign-Exchange and Monetary Policy
16.6.2 Exchange-Rate Regimes
Fixed versus Floating Exchange Rates
Varieties of Exchange-Rate Management
Fixed versus Floating: Advantages and Disadvantages
Currency Areas
Appendix: The Monetarist Experiment of the 1980s: An Application of IS-LM Analysis
16.A.1 The Situation in 1979
The Problem and Paul Volcker
Monetarism and the Fed
16.A.2 Implementation
An IS-LM Analysis
Reserve Targeting
16.A.3 Post-Mortem
Expectations and Outcomes
What Went Wrong?
17.1 Countercyclical Fiscal Policy
17.1.1 Fiscal Responses to Aggregate Demand and Supply Shocks
Active and Passive Fiscal Policy
Aggregate-Demand Shocks
Aggregate-Supply Shocks
Mixed Shocks
The Cost of Misperception
17.1.2 The Limits of Countercyclical Fiscal Policy
The Lag in Fiscal Policy
Permanent versus Temporary Policies
State and Local Budgets
17.2 Fiscal Policy in the Long Run
17.2.1 Monetary Policy as Fiscal Policy
Seigniorage
Risks of Hyperinflation
17.2.2 Deficits and the Debt through Time
17.2.3 Crowding Out
Functional Finance
Zero-Sum Crowding Out
Crowding Out or Crowding In?
Displacement of Private Expenditure
Deficits and Interest Rates
17.2.4 Wealth Effects
Are Government Bonds Net Worth?
The Limits of Ricardian Equivalence
17.2.5 Taxes and Incentives
Average and Marginal Tax Rates
Supply-Side Economics
Costs of Complexity
17.3 The Burden of the Debt
17.3.1 Debt and Growth
Debt and Income
Outgrowing Debt
Inflation and the Debt
17.3.2 Capital and Consumption Spending
17.3.3 Domestic and Foreign Debt
17.4 Summing Up: Functional Finance Again
Part IX: Macroeconomic Data
G.1 Economic Data
G.1.1 Variables
G.1.2 The Dimensions of Data
Keeping Track of Units
Stocks and Flows
Annualization and Aggregation
Percentages and Percentage Points
G.1.3 Seasonal Adjustment
G.2 Graphs
G.2.1 Cross-Sectional Graphs
Univariate Cross-Sectional Graphs
Multivariate Cross-Sectional Graphs
G.2.2 Time-Series Graphs
Time-Series Plots
Time-Series Scatterplots
G.2.3 Guide to Good Graphics
A Good Graph Is Informationally Rich
A Good Graph Is Clear and Self-Contained
A Good Graph Is Aesthetically Pleasing
The Golden Rule of Graphics
G.3 A Guide to Good Tables
G.4 Descriptive Statistics
G.4.1 Histograms and Frequency Distributions
G.4.2 Measures of Central Tendency
The (Arithmetic) Mean
The Weighted Mean
The Median
The Geometric Mean
G.4.3 Measures of Variation
Variance
Standard Deviation
Coefficient of Variation
G.5 Making Inferences from Descriptive Statistics
G.5.1 Homogeneity
G.5.2 Stationarity
G.6 The Normal Distribution
G.7 Type I and Type II Error
G.8 Using Index Numbers
G.8.1 Index Numbers
G.8.2 Price Indices
Laspeyres (or Base-Weighted) Index
Paasche (or Current-Weighted) Index
The Fisher-Ideal Index
G.9 Real and Nominal Magnitudes
G.9.1 Conversions between Real and Nominal Magnitudes
Converting Nominal Data to Real
Converting Real Data to Nominal
Converting Real Data of One Reference Period to That of Another Period
G.9.2 Real Values Using Chain-Weighted Indices
G.10 Growth Rates
G.10.1 The Essentials of Growth Rates
Simple Growth Rates
Compound Annualization
Annual Growth Rates
Average Growth Rates
G.10.2 When Should Growth Rates Be Compounded?
G.10.3 Extrapolation
G.10.4 The Algebra of Growth Rates
G.11 Logarithms
G.11.1 What Are Logarithms?
The Concept of the Logarithm
The Antilogarithm
The Natural Logarithm
G.11.2 Calculating with Logarithms
G.11.3 Logarithms and Growth
Logarithmic Derivatives and Percentage Changes
Logarithms and Growth Rates
Continuous Compounding
Further Examples
The Rule of 72
G.11.4 Logarithmic Graphs
G.12 Detrending
G.12.1 Constant Trends
Using Constant Trends
Linear Trends
Exponential and Other Constant Trends
G.12.2 Moving-Average Trends
The Moving-Average Trend
Calculating Moving-Average Trends
Dealing with the Endpoint Problem
G.12.3 Differences or Growth Rates
G.13 Correlation and Causation
G.13.1 The Nature of Correlation
G.13.2 Covariance
G.13.3 The Correlation Coefficient
G.13.4 Two Important Properties of Correlations
Correlation Is Symmetrical
Correlation Is Not Transitive
G.13.5 Causation versus Correlation
The Nature of Causation
Properties of Causation
G.13.6 Causal Structure
Mutual and Cyclical Causes
Direct and Indirect Causes
Common Causes
G.13.7 Causal Inference
Time Order
Economic Theory and Common Sense
G.14 Relationships between Stationary and NonstationaryTime Series
G.14.1 Nonsense Correlations
G.14.2 Genuine Relationships between NonstationaryTime Series
Short-Run Relationships
Long-Run Relationships
G.14.3 Do Not Mix Stationary and NonstationaryTime Series
G.15 Regression
G.15.1 Linear Regression
The Regression Line
Goodness of Fit
G.15.2 Nonlinear Regression
G.15.3 The Direction of Regression
G.15.4 Nonsense Regression
G.16 The Cobb-Douglas Production Function
G.16.1 The Properties of the Cobb-Douglas ProductionFunction: An Example
G.16.2 The Mathematics of the Cobb-DouglasProduction Function
No Free Lunch
More Inputs, More Output
Diminishing Returns to Factors of Production
Increasing Returns to Scale
G.16.3 Estimating Labor's Share (α) of Output from Data
Symbols
Glossary
Guide to Online Resources

1 Macroeconomics and the Real World

2 The National Accounts and the Structure of the Economy

3 Understanding Gross Domestic Product

4 Measuring Prices and Inflation

5 Trends and Cycles

6 The Financial System

7 The Behavior of Interest Rates

8 The International Financial System and the Balance of Payments

9 Aggregate Production

10 Economic Growth

11 The Ideal Labor Market

12 Unemployment and the Labor-Market Process

13 An Introduction to Aggregate Demand

14 Consumption and Investment: A Deeper Look

15 The Dynamics of Output, Unemployment, and Inflation

16 Monetary Policy

17 Fiscal Policy

A Guide to Working with Economic Data

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