Macroeconomics 101

1. Introduction to Economics
2. Measuring an Economy's Output and Income
3. Unemployment and the Labor Market
4. Income Distribution
5. Money and the Money Supply
6. Inflation

7. Interest Rates
8. Exchange Rates
9. Business Cycles
10. Fiscal Policy and Spending
11. Monetary Policy
12. The Financial System

Introduction to Economics

This section provides a very basic introduction to the field of economics and prepares students and readers to move on to the other sections of the site.

• What Is Economics?
• Microeconomics vs. Macroeconomics
• Economics as the "Dismal Science?"
• Positive Versus Normative Analysis in Economics

Measuring an Economy's Output and Income

How do we measure the size of the economy? And why do economies grow... or fail to grow?

• The Production Possibilities Frontier
• Gross Domestic Product as a Measure of Output and Income
• The Expenditure Categories of Gross Domestic Product
• What's the Difference Between Nominal and Real?
• The GDP Deflator
• Other Measures of Economic Output and Income

• The Broken Window Fallacy
• Will Hurricane Katrina increase GDP?
• Does the Superbowl Predict Economic Growth?
• The Effect of Income Taxes on Economic Growth
• The Baby Boom and the Future of the Economy
• The Economic Effect of Tariffs

Unemployment and the Labor Market

An examination of unemployment, the unemployment rate and jobs. How are jobs created and destroyed in an economy? Why do we have unemployment?

• Measuring Unemployment
• Types of Unemployment
• Would 0% Unemployment Be a Good Thing?
• Globalization, Unemployment and Recessions

• Why Do We Use the Unemployment Rate?
• Has Employment Decreased Over The Last 25 Years?
• Unemployment Insurance in the United States
• The Phillips Curve

Income Distribution

How is income distribution calculated in a society?

• The Lorenz Curve
• The Gini Coefficient

Money and the Money Supply

What is money, what counts as money, and how is money measured?

• What Is Money?
• Types of Money
• What Was the Gold Standard?

Inflation

What causes the overall level of prices in an economy to rise... or fall?

• What Is Inflation?
• The Consumer Price Index
• The GDP Deflator
• Should We Adjust Prices For Inflation?
• The Costs of Inflation
• Cost-Push Inflation vs. Demand-Pull Inflation

• Introduction to Chained CPI
• The Quantity Theory of Money
• Why Not Just Print More Money?
• Purchasing Power Parity: Link Between Exchange Rates and Inflation
• What Is Deflation and How Can it Be Prevented?
• Why Don't Prices Decline During A Recession?

Interest Rates

Interest Rates play an important role in economics, as they affect purchasing and consumption decisions made by consumers, firms and governments.

• Introduction to Interest Rates
• What's the Difference Between all the Interest Rates in the Newspaper?
• What Happens if Interest Rates Go To Zero?
• What's the Difference Between Nominal and Real?

• Calculating and Understanding Real Interest Rates
• What Happens if Nominal Interest Rates Go To Zero?
• The Fisher Effect

Exchange Rates

Another concept introduced early in economics is exchange rates - particularly exchange rates between currencies. But where do these values come from? Why is the U.S. dollar worth what it is?

• Introduction to Exchange Rates
• What Determines an Exchange Rate
• Exchange Rates - What to Use as the Base
• Real Exchange Rates
• Introduction to Purchasing-Power Parity
• Purchasing Power Parity: Link Between Exchange Rates and Inflation

• What Is the Difference Between Relative PPP and Absolute PPP?
• Exchange Rates and Commodity Prices
• The Trade Deficit and Exchange Rates
• Is the Canadian Dollar Going Up in Value, or Is the U.S. Dollar Going Down?
• What Is Arbitrage?
• How Markets Use Information To Set Prices

Business Cycles

This section introduces how economists view and measure the positive and negative short-term fluctuations in the economy.

• What is the Business Cycle?
• A Beginner's Guide to Economic Indicators
• Recession? Depression? What's the difference?
• Okun's Law
• Presidential Elections and the Economy
• What do the Economic Indicators Say About Dubya's Chances?

• Do Changes in Stock Prices Cause Recessions?
• Why Do Government Budget Deficits Grow During Recessions?
• Why Don't Prices Decline During A Recession?
• Are recessions good for the economy?
• Globalization, Unemployment and Recessions. What is the Link?

Fiscal Policy and Spending

How does government spending impact the economy? Can fiscal policy be used as a mechanism to promote economic growth?

• Fiscal Policy: Budget and Taxes
• Why Do Government Budget Deficits Grow During Recessions?
• Will Higher Taxes on Gasoline Lead to Higher Government Spending?

• What Are The Key Ingredients of Fiscal Stimulus
• Fiscal Stimulus - Unlikely To Work in the Real World
• The Reinhart-Rogoff Austerity Controversy

Monetary Policy

How does the government conduct monetary policy? What effect does it have on the economy?

• The Phillips Curve
• The Quantity Theory of Money
• The Federal Reserve System
• Quantitative Easing
• The Cyprus Financial Crisis

The Financial System

How does the banking system work? What are capital markets?

• Introduction to Financial Markets
• The Efficient-Markets Hypothesis
• A Field Guide to Bond Ratings Agencies