Macroeconomics is the study of how economies perform over short and long periods of time.
The performance of an economy is directly related to living standards.
The more our economy produces, the more we can consume and the higher is our standard of living.
Oppositely, if our economy produces less output this year than it did last year,
we will consume less than we did last year. And there will be more unemployed workers
than there were last year.
Macroeconomics examines the impact that government policy can have on the rate of unemployment,
the level of output that our economy produces and the prices that we pay for the goods and services.
Of particular importance is our time frame. Some policies which boost our consumption in the short run
might reduce our living standards in the long run. Some policies that reduce the unemployment rate in the
short run might increase the rate of inflation in the long run. Macroeconomics explores these trade-offs.
what you will learn
This course emphasizes the difference between the short-run and long-run performance
of the economy and stresses the fiscal and monetary tradeoffs that policymakers face.
Politicians do not like to raise taxes or cut government spending.
But the US federal budget is in deficit and the US federal goverment must repay its debts from the past.
Will that require tax hikes or spending cuts? Or can the US economy grow so fast that the debt
shrinks relative to GDP?
The US Federal Reserve has "dual mandate" that requires it to maximize employment,
while also keeping prices stable and long-term interest rates moderate.
But there is usually a trade-off between inflation and unemployment in the short run,
so the US Federal Reserve must carefully balance both objectives.
The growth macro course explores these questions
in greater detail. The health macro course
applies the theory of economic growth to the study of drug addiction. It also explores
the relationship between consumer price inflation and medical price inflation.