Macroeconomics: A European Perspective with MyEconLab
2nd Edition
Olivier Blanchard, Francesco Giavazzi, Alessia Amighini, Blanchard
Jun 2013, Book with Online Course Access
ISBN13: 9780273771821
ISBN10: 0273771825
£57.99





Description

This package includes a physical copy of Macroeconomics: A European Perspective as well as access to the eText and MyEconLab.

Macroeconomics: A European Perspective will give students a fuller understanding of the subject and has been fully updated to provide broad coverage of the ongoing economic turmoil in Europe. It's unified view of macroeconomics helps students to make the connections between the short, medium, and long run.


Features

    Updated chapters on the financial crisis, European economic and monetary integration, the Euro, and sovereign debt
    Graphs and tables
    Focus boxes expand on macroeconomic events
    Margin notes provide extended definitions and give students additional context


Table of Contents

List of figures xi

List of tables xv

List of Focus boxes xvi

About the authors xvii

Publisher’s acknowledgements xviii

Guided tour xx

Preface xxii

Author acknowledgements xxiii

INTRODUCTION 1

Chapter 1

A tour of the world 2

1.1 Europe and the euro 3

1.2 The economic outlook in the USA 6

1.3 The largest emerging economies 10

1.4 Looking ahead 11

Key terms 12

Questions and problems 12

Further reading 13

Appendix Where to find the numbers? 14

Chapter 2

A tour of the book 15

2.1 Aggregate output 16

2.2 Other major macroeconomic variables 21

2.3 Output, unemployment and the inflation rate,

Okun’s law and the Philips curve 27

2.4 The short run, the medium run and the long run 29

2.5 A tour of the book 30

Summary 32

Key terms 33

Questions and problems 33

Further reading 35

Appendix The construction of real GDP and

chain-type indexes 36

THE SHORT RUN 41

Chapter 3

The goods market 42

3.1 The composition of GDP 43

3.2 The demand for goods 44

3.3 The determination of equilibrium output 47

3.4 Investment equals saving: an alternative way of

thinking about the goods–market equilibrium 54

3.5 Is the government omnipotent? A warning 57

Summary 58

Key terms 58

Questions and problems 59

Chapter 4

Financial markets 61

4.1 The demand for money 62

4.2 Determining the interest rate: part 1 66

4.3 Determining the interest rate: part 2 70

4.4 Two alternative ways of looking at the

equilibrium 76

Summary 79

Key terms 79

Questions and problems 80

Further reading 81

Chapter 5

Goods and financial markets:

the IS–LM model 82

5.1 The goods market and the IS relation 83

5.2 Financial markets and the LM relation 87

5.3 Putting the IS and the LM relations together 90

5.4 Using a policy mix 95

5.5 IS–LM and the liquidity trap 96

5.6 How does the IS–LM model fit the facts? 99

Summary 101

Key terms 101

Questions and problems 102

Further reading 103

Appendix An analytical version of the IS–LM model 104

Chapter 6

The IS–LM model in an open economy 108

6.1 Openness in goods markets 109

6.2 Openness in financial markets 116

6.3 The IS relation in an open economy 122

6.4 The LM relation in an open economy 128

6.5 Putting goods and financial markets together

in an open economy 131

Summary 133

Key terms 133

Questions and problems 134

Further reading 134

Chapter 7

Output, the interest rate and

the exchange rate 136

7.1 Increases in demand, domestic or foreign 137

7.2 Depreciation, the trade balance and output 143

7.3 Looking at dynamics: the J-curve 145

7.4 Saving, investment and the trade balance 147

7.5 The effects of policy in an open economy 151

7.6 Fixed exchange rates 152

Summary 157

Key terms 157

Questions and problems 157

Further reading 160

Appendix Derivation of the Marshall–Lerner

condition 161

THE MEDIUM RUN 163

Chapter 8

The labour market 164

8.1 A tour of the labour market 165

8.2 Wage determination 170

8.3 Price determination 177

8.4 The natural rate of unemployment 178

8.5 Where we go from here 182

Summary 183

Key terms 184

Questions and problems 184

Further reading 186

Appendix Wage and price setting relations versus

labour supply and labour demand 187

Chapter 9

Putting all markets together:

the AS–AD model 189

9.1 Aggregate supply 190

9.2 Aggregate demand 192

9.3 Equilibrium in the short run and in

the medium run 194

9.4 The effects of a monetary expansion 197

9.5 A decrease in the budget deficit 200

9.6 An increase in the price of oil 204

9.7 Conclusions 210

Summary 211

Key terms 212

Questions and problems 212

Chapter 10

The Phillips curve, the natural rate

of unemployment and inflation 215

10.1 Inflation, expected inflation and

unemployment 216

10.2 The Phillips curve 217

10.3 The Phillips curve and the natural rate of

unemployment in Europe 224

Summary 232

Key terms 232

Questions and problems 233

Further reading 234

Appendix From the aggregate supply relation to

a relation between inflation, expected

inflation and unemployment 235

Chapter 11

Inflation, money growth and

the real rate of interest 236

11.1 Output, unemployment and inflation 237

11.2 Nominal versus real interest rates 241

11.3 Nominal and real interest rates and

the IS–LM model 244

11.4 The effects of money growth 245

11.5 Money growth, inflation and nominal and

real interest rates 252

11.6 Disinflation 254

Summary 260

Key terms 261

Questions and problems 261

Chapter 12

The medium run in an open

economy 264

12.1 The medium run 265

12.2 Exchange rate crises under fixed

exchange rates 270

12.3 Exchange rate movements under flexible

exchange rates 274

12.4 Choosing between exchange rate

regimes 277

Summary 280

Key terms 280

Questions and problems 281

THE LONG RUN 285

Chapter 13

The facts of growth 286

13.1 Measuring the standard of living 287

13.2 Growth in rich countries since 1950 290

13.3 A broader look across time and space 293

13.4 Thinking about growth: a primer 296

Summary 301

Key terms 301

Questions and problems 302

Further reading 303

Chapter 14

Saving, capital accumulation and

output 304

14.1 Interactions between output and capital 305

14.2 The implications of alternative saving rates 308

14.3 Getting a sense of magnitudes 317

14.4 Physical versus human capital 320

Summary 323

Key terms 323

Questions and problems 323

Further reading 325

Appendix The Cobb–Douglas production function

and the steady state 326

Chapter 15

Technological progress and growth 327

15.1 Technological progress and the rate

of growth 328

15.2 The determinants of technological progress 334

15.3 The facts of growth revisited 337

Summary 342

Key terms 343

Questions and problems 343

Further reading 345

Appendix Constructing a measure of technological

progress 346

EXPECTATIONS 351

Chapter 16

Financial markets and expectations 352

16.1 Expected present discounted values 353

16.2 Bond prices and bond yields 359

16.3 The stock market and movements in stock

prices 367

16.4 Risk, bubbles, fads and asset prices 374

Summary 378

Key terms 379

Questions and problems 379

Further reading 381

Chapter 17

Expectations, consumption and

investment 382

17.1 Consumption theory and the role of

expectations 383

17.2 Toward a more realistic description 387

17.3 Investment 391

17.4 The volatility of consumption and investment 398

Summary 400

Key terms 401

Questions and problems 401

Appendix Derivation of the expected present

value of profits under static

expectations 404

Chapter 18

Expectations, output and policy 405

18.1 Expectations and decisions: taking stock 406

18.2 Monetary policy, expectations and output 409

18.3 Deficit reduction, expectations and output 415

Summary 420

Key terms 421

Questions and problems 421

EUROPE: PAST, PRESENT AND FUTURE

Chapter 19

The euro at fourteen: was it a

good idea and why is it in trouble? 424

19.1 The monetary history of Europe from post-war

to the present day 425

19.2 Is Europe an optimal currency area? 431

19.3 The European system of central banks:

structure and objectives 434

19.4 The first thirteen years of the euro (1999–2011) 439

19.5 Should the outs join? 443

Summary 445

Key terms 446

Questions and problems 446

Further reading 447

Chapter 20

The crisis 448

20.1 From a housing problem to a financial crisis 449

20.2 The use and limits of policy 454

20.3 The slow recovery 464

Summary 469

Key terms 469

Questions and problems 469

Further reading 470

Chapter 21

High debt 471

21.1 The government’s budget constraint 472

21.2 The evolution of the debt-to-GDP ratio 476

21.3 The return from a high debt 486

Summary 490

Key terms 490

Questions and problems 490

Further reading 491

SHOULD POLICY MAKERS BE

RESTRAINED?

Chapter 22

Policy and policy makers: what do

we know? 494

22.1 Uncertainty and policy 495

22.2 Expectations and policy 498

22.3 Politics and policy 503

Summary 505

Key terms 506

Questions and problems 506

Further reading 508

Chapter 23

Monetary and fiscal policy rules and

constraints 509

23.1 The optimal inflation rate 510

23.2 Monetary policy rules 514

23.3 Fiscal policy rules and constraints 523

Summary 532

Key terms 533

Questions and problems 533

Further reading 536

Appendix The time inconsistency problem:

Barro and Gordon model 537

EPILOGUE 539

Chapter 24 540

The story of macroeconomics 541

24.1 Keynes and the Great Depression 541

24.2 The neoclassical synthesis 541

24.3 The rational expectations critique 544

24.4 Recent developments up to the crisis 547

24.5 First lessons from the crisis 550

Summary 552

Key terms 552

Further reading 553

Appendix 1 A maths refresher 554

Appendix 2 An introduction to econometrics 559

Glossary 564

Symbols used in this book 575

Index 577