Intermediate Macroeconomics: Output, Inflation, and Growth

Intermediate Macroeconomics: Output, Inflation, and Growth

Intermediate Macroeconomics: Output, Inflation, and Growth

Intermediate Macroeconomics: Output, Inflation, and Growth

Excerpt

The approach of this book emphasizes that economics is a social science which aims to develop testable predictions in terms of measurable concepts. Though it contains a good deal of theory, we have tried consistently to develop the view that theory is meant to be tested. To this end, each chapter is supplemented by questions and exercises, many of which require the use of data from published sources to make simple tests of economic predictions or hypotheses. This means that the student is asked not only to read through the book but also to work through it. It also gives the student the opportunity to learn economics in the best of all possible ways--by actually working out problems. By this approach, we hope not only to encourage an appropriate methodological outlook but also to discourage students from thinking, as many do, that economic theory is empty and and and applied economics mainly unstructured description only loosely related to theory.

Many students are drawn to economics initially by an entirely natural and creditable concern with social problems. Unfortunately many courses, in their anxiety to give an adequate grounding in theory, devote little time to the application of theory to policy issues. The result is sometimes disenchantment. We have tried to avoid this problem by stressing the application of macroeconomic theory to policy problems. In doing so, we have examined issues at the center of the continuing debate between essentially Keynesian economists and the monetarist school.

Perhaps the most awkward problem facing the writer of an intermediate theory text is to decide what use to make of mathematics. The decision taken here is to assume no knowledge of mathematics beyond algebra and, in particular, no knowledge of the differential calculus. This point is im-

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