ECON 602 Macroeconomic theory and policy: TEXTBOOK

Transcript:ECON 602 Macroeconomic theory and policy: TEXTBOOK:
ECON 602 Macroeconomic theory and policy: TEXTBOOK SLIDES FOR Introduction Sep. 1, 2022 Sep. 8, 2022 Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Macroeconomics Eighth Edition Chapter 1 A Tour of the World Copyright © 2021, 2017, 2013 Pearson Education, Inc. All Rights Reserved A Tour of the World What is macroeconomics? The best way to answer this question is to take you on an economic tour of the world. The goal of this chapter is to give you a sense of these recent events and of some of the macroeconomic issues confronting different countries today. 1.1 The Crisis (1 of 3) From 2000 to 2007, the world economy had a sustained expansion. In 2007, U.S. housing prices started declining, leading to a major financial crisis. The financial crisis turned into a major economic crisis with falling stock prices. In the third quarter of 2008, U.S. output growth turned negative and remained so in 2009. Through the trade and financial channels, the U.S. crisis quickly became a world crisis. 1.1 The Crisis (2 of 3) Figure 1.1 Output Growth Rates for the World Economy, for Advanced Economies, and for Emerging and Developing Economies, 2000–2018 Source: IMF. World Economic Outlook Database, July 2018. N G D P_R P C H.A. 1.1 The Crisis (3 of 3) Figure 1.2 Stock prices in the United States, the Euro area, and emerging economies, 2007–2010 Source: IMF. World Economic Outlook Database, July 2018. N G D P_R P C H.A. 1.2 The United States (1 of 6) The United States is big With an output of $20.5 trillion in 2018, it accounted for 24% of world output. The U.S. standard of living is high Output per capita is $62,500, close to the highest in the world. Economists also look at: Output growth Unemployment rate Inflation rate