Principles of Macroeconomics

About our authors Karl E. Case (1946 to 2016) was a Professor of Economics Emeritus at Wellesley College where he taught for 34 years, serving several tours of duty as Department Chair. He was a Senior Fellow at the Joint Center for Housing Studies at Harvard University and a founding partner in the real estate research firm of Fiserv Case Shiller Weiss, which produces the S&P Case-Shiller Index of home prices. He served as a member of the Index Advisory Committee of Standard and Poor's, and on the Academic Advisory Board of the Federal Reserve Bank of Boston. Professor Case received his BA from Miami University in 1968, spent 3 years on active duty in the Army, and received his PhD in Economics from Harvard University in 1976. Professor Case's research was in the areas of real estate, housing, and public finance. He authored or coauthored five books, including Principles of Economics, Economics and Tax Policy, and Property Taxation: The Need for Reform, and published numerous articles in professional journals, focused on real estate markets and prices. Chip, as he was known to his many friends and colleagues, contributed to this textbook throughout its many editions. In his honor and with respect for his substantial contributions to the text and the discipline of economics, his co-authors plan to keep his name on the text for all future editions. Ray C. Fair is Professor of Economics at Yale University. He is a member of the Cowles Foundation at Yale and a Fellow of the Econometric Society. He received a BA in Economics from Fresno State College in 1964 and a PhD in Economics from MIT in 1968. He taught at Princeton University from 1968 to 1974. Professor Fair has taught introductory and intermediate macroeconomics at Yale since 1974. He has also taught graduate courses in macroeconomic theory and macroeconometrics. Professor Fair's research has primarily been in the areas of macroeconomics and econometrics, with particular emphasis on macroeconometric model building. He has also done work in the areas of finance, voting behavior, and aging in sports. His publications include Specification, Estimation, and Analysis of Macroeconometric Models (Harvard Press, 1984); Testing Macroeconometric Models (Harvard Press, 1994); Estimating How the Macroeconomy Works (Harvard Press, 2004), and Predicting Presidential Elections and Other Things (Stanford University Press, 2012). Professor Fair's US and multicountry models are available for use at fairmodel.econ.yale.edu, free of charge. Many teachers have found that having students work with the US model on the internet is a useful complement to an introductory macroeconomics course. Sharon M. Oster is the Frederic Wolfe Professor of Economics and Management and former Dean of the Yale School of Management. Professor Oster joined Case and Fair as a coauthor in the 9th edition of this book. Professor Oster has a BA in Economics from Hofstra University and a PhD in Economics from Harvard University. Professor Oster's research is in the area of industrial organization. She has worked on problems of diffusion of innovation in a number of different industries, on the effect of regulations on business, and on competitive strategy. She has published a number of articles in these areas and is the author of several books, including Modern Competitive Analysis and The Strategic Management of Nonprofits. Prior to joining the School of Management at Yale, Professor Oster taught for a number of years in Yale's Department of Economics. In the department, Professor Oster taught introductory and intermediate microeconomics to undergraduates as well as several graduate courses in industrial organization. Since 1982, Professor Oster has taught primarily in the Management School, where she teaches the core microeconomics class for MBA students and a course in the area of competitive strategy. Professor Oster also consults widely for businesses and nonprofit organizations and has served on the boards of several publicly traded companies and nonprofit organizations.

PART 1: INTRODUCTION TO ECONOMICS

The Scope and Method of Economics
The Economic Problem: Scarcity and Choice
Demand, Supply, and Market Equilibrium
Demand and Supply Applications

PART 2: CONCEPTS AND PROBLEMS IN MACROECONOMICS

Introduction to Macroeconomics
Measuring National Output and National Income
Unemployment, Inflation, and Long-Run Growth

PART 3: THE CORE OF MACROECONOMIC THEORY

Aggregate Expenditure and Equilibrium Output
The Government and Fiscal Policy
Money, the Federal Reserve, and the Interest Rate
The Determination of Aggregate Output, the Price Level, and the Interest Rate
Policy Effects and Cost Shocks in the AS/AD Model
The Labor Market in the Macroeconomy

PART 4: FURTHER MACROECONOMICS ISSUES

Financial Crises, Stabilization, and Deficits
Household and Firm Behavior in the Macroeconomy: A Further Look
Long-Run Growth
Alternative Views in Macroeconomics

PART 5: THE WORLD ECONOMY

International Trade, Comparative Advantage, and Protectionism
Open-Economy Macroeconomics: The Balance of Payments and Exchange Rates
Economic Growth in Developing Economies

PART 6: METHODOLOGY

Critical Thinking about Research