Macroeconomics: An Integrated Approach / Edition 1 available in Paperback
Many undergraduate texts treat macroeconomics as a set of distinct topics rather than as a unified body of theory and empirical findings. In contrast, this text by Alan Auerbach and Laurence Kotlikoff uses a single analytic framework--the two-period life-cycle model--to explore and connect each of the major issues in contemporary macroeconomics. The model describes the evolution of the economy over time in terms of the behavior of overlapping generations of individuals, each of whom lives for two periods: youth and old age. This versatile framework can encompass most macroeconomic schools of thought through the alteration of key assumptions. The use of one basic model also allows the authors to explore important topics not always addressed adequately in other texts; these include credit constraints, real business cycles, generational accounting, and international capital flows markets.
Written in a clear, accessible style, this shortened and simplified second edition provides a systematic way to interpret macroeconomic outcomes, to understand various policy proposals, and to appreciate how individuals and firms fit into the big picture.
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Table of ContentsList of Figures
List of Tables
Prologue: The Questions of Macroeconomics
PART ONE From Micro to Macro: Modeling
Income Determination and Growth
1 Output, Inputs, and Growth
2 The Dynamic Supply of Inputs
3 The Dynamic Demand for Inputs and the Evolution of Output
4 Economic Fluctuations
5 The Measurement of Output and Prices
PART TWO Fiscal and Monetary Policy
6 Fiscal Policy, Saving, Growth
7 Money and Prices in the Closed Economy
PART THREE Economic Fluctuations
8 The Keynesian Model of Price and Wage Rigidity
9 Understanding Recessions
10 The Nature and Costs of Unemployment
11 Countercyclical Policy
PART FOUR The International Economy
12 Saving and Growth in the International Economy
13 Money, EXchange Rates, and Policy in the Open Economy
PART FIVE Enriching the Model
14 The Banking System, the Federal Reserve, and the Money
15 Saving Behavior and Credit Markets
16 Financial Markets and the Investment Decision
What People are Saying About This
Auerbach and Kotlikoff put first things first in Macroeconomics highlighting long-term growth in output, productivity, and labor and captial input. They integrate a superb treatment of life-cycle consumption and saving into the neoclassical model of long-term growth.
Auerbach and Kotlikoff tackle the most difficult (though necessary) aspect of teaching macro at the intermediate level, general equilibrium analysis, with an easy dexterity. Their book exhibits the rigor required of modern macroeconomic analysis, covers the most pressing issues of macro policy, and does both with clarity and grace. It's an excellent book.
As one would expect, Auerbach and Kotlikoff offers a comprehensive, innovative, and logically consistent synthesis of the major questions of macroeconomics. Particularly impressive is their attention to the long-run determines of saving and growth in open as well as closed economies.