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    Lecture 1 Macroeconomics

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    niovaley
    This document provides an introduction to macroeconomics, including definitions, key variables, goals, and the development of macroeconomic theory. It defines macroeconomics as the study of an economy as a whole, including factors like GDP, employment, inflation. The main goals are full employment, price stability, economic growth. Markets like goods, labor, money, and capital are also introduced. The development of macroeconomics is summarized as the classical view of minimal government intervention versus the Keynesian view that active policy can improve outcomes.

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    Lecture 1 Macroeconomics

    Uploaded by

    niovaley
    316 views12 pages
    This document provides an introduction to macroeconomics, including definitions, key variables, goals, and the development of macroeconomic theory. It defines macroeconomics as the study of an economy as a whole, including factors like GDP, employment, inflation. The main goals are full employment, price stability, economic growth. Markets like goods, labor, money, and capital are also introduced. The development of macroeconomics is summarized as the classical view of minimal government intervention versus the Keynesian view that active policy can improve outcomes.

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    it is an introduction to macroeconomics. Very comprehensive notes.

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    This document provides an introduction to macroeconomics, including definitions, key variables, goals, and the development of macroeconomic theory. It defines macroeconomics as the study of an economy as a whole, including factors like GDP, employment, inflation. The main goals are full employment, price stability, economic growth. Markets like goods, labor, money, and capital are also introduced. The development of macroeconomics is summarized as the classical view of minimal government intervention versus the Keynesian view that active policy can improve outcomes.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    316 views12 pages

    Lecture 1 Macroeconomics

    Uploaded by

    niovaley
    This document provides an introduction to macroeconomics, including definitions, key variables, goals, and the development of macroeconomic theory. It defines macroeconomics as the study of an economy as a whole, including factors like GDP, employment, inflation. The main goals are full employment, price stability, economic growth. Markets like goods, labor, money, and capital are also introduced. The development of macroeconomics is summarized as the classical view of minimal government intervention versus the Keynesian view that active policy can improve outcomes.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 12

    Lecture 1 Introduction to Macroeconomics

    Definition and Scope of Macroeconomics Important Macroeconomic Variables The Goals of Macroeconomics/Main Economic Goals of a Nation Markets in Macroeconomics The Development of Macroeconomics

    Learning Outcomes/Objectives
    1. Define Macroeconomics 2. Identify Macroeconomic Variables 3. Identify and Explain the Main Economic Goals of a Nation 4. Differeciate between the Two Main Traditions in Macroeconomics (Classical & Keynesian) including the New Classical and New Keynesian

    Preamble
    Why have some countries experienced rapid growth in incomes over the past century while others are battling with poverty? Why do some countries have high rates of inflation while others maintain stable prices? Why the high interest rate and graduate unemployment rate in Ghana as compared to other countries? Why should the debt crisis in Europe and other difficulties that other countries face be a source of concern to Ghana? Do macroeconomic issues play important role in political debate and influence voting in Ghana? Should the government intervene to improve water, petroleum & electricity supplies in Ghana?

    Definition and Scope of Macroeconomics


    Macroeconomics is the study of the economy as a whole. Macroeconomics deals with the structure, performance and behaviour of the economy as a whole.

    It is concerned with the determination of broad aggregates of the economy with respect to total income or output of goods & services, employment/unemployment, inflation, government expenditure, consumption, exchange rates and the balance of payments. In the international scene, it is concerned with the interaction of the domestic economy with the rest of the world.

    Definition and Scope of Macroeconomics


    Fluctuations in output, employment, inflation, exchange rates and other aggregate variables are among the most regular and persistent facts of macroeconomics. The focus of macroeconomics is both the long-run economic growth and short-run fluctuations in GDP (that constitute the business cycle). Macroeconomics, therefore, deals with the major economic issues and problems of today. Macroeconomics seeks to explain why the fluctuations happen and to investigate policies that can mitigate them.

    Major Macroeconomic Variables


    The important macroeconomic variables that we deal with in macroeconomics are: The general price level, employment, output, inflation, interest rates, consumption level, investment level etc.

    The Goals of Macroeconomics


    The goals of macroeconomics are: Full Employment Price Stability Balance of Payments Stability Economic Growth

    Main Economic Goals of a Nation


    The most important economic goals or objectives of a nation are achievement of the ff: a) Internal Balance - Price Stability - High Level of Employment b) External Balance - Stable Exchange Rate - Favourable Balance of Payments - Favourable Terms of Trade - Balance between Exports and Imports c) A reasonable rate of economic growth (GDP growth) d) An equitable distribution of income Reduction of income inequality; Increased standard of living; Poverty Reduction

    Markets in Macroeconomics
    Every economy consists of markets and each market is controlled by the supply of and demand for the products that are sold and purchased in the market. The markets are: Goods & Services (Commodity/Product) market Labour market Money market Capital (Bonds) market Money, Capital/Bonds markets fall under assets market.

    A diagrammatic Representation of Markets

    The Development of Macroeconomics


    The Two Traditions in Macroeconomics
    How do we explain the periods of persistent high unemployment and inflation rates that were recorded in various parts of the world, both past and recent times? (1930s, 1970s, 1980s, 1990s and the past five years). What should be the right policy direction in addressing these economic challenges/problems? Should there be an active government or minimal government intervention in the wake of such problems? Attempt to respond to these pertinent macroeconomic issues have divided macroeconomists along diverging lines of debates or arguments.

    The Development of Macroeconomics


    The Two Traditions in Macroeconomics
    One school of thought believes that markets work best if left to themselves; the other is of the view that government intervention can significantly improve the operation of the economy. The two main intellectual traditions in macroeconomics are: the Classical Macroeconomics or School Keynesian Macroeconomics or School. We shall also like at the New Classical School and New Keynesian School.

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