Macroeconomics Imperfections, Institutions, and Policies

The distinctive feature of this book is that it provides a unified framework for the analysis of short- and medium-run macroeconomics. This gives students a model that they can use themselves to understand a wide range of real-world macroeconomic behaviour and policy issues. The authors introduce a new graphical model (IS/PC/MR) based on the 3-equation New Keynesian model used in modern macroeconomics. The three equations are BL the IS curve BL the Phillips curve and BL an interest rate-based monetary policy rule. The use of a common framework throughout for closed and open economies helps readers develop the economic intuition with which to address a diversity of macroeconomic problems. Applied chapters show how the models can be used to analyse performance in OECD economies over the past twenty-five years. The chapters on growth present an in-depth coverage of the Solow-Swan, endogenous and Schumpeterian models that allow the reader to understand how these approaches can be used to answer the big questions of growth: why some countries are rich and others, poor; why some catch up and others do not. Since the book is based on the mainstream 3-equation model used at the research frontier, the book gives students the economics background necessary for accessing advanced macroeconomics. It is also designed to appeal to graduate students, non-specialists in macroeconomics, professional economists and those from related disciplines who want a guide to the complexities of modern macroeconomics and to understand contemporary policy debates. Online Resource Centre For lecturers: password-protected solutions and diagrams from the text. For students: exercises and checklist questions.

1 - Motivation for Macroeconomic Models
2 - Aggregate Demand, Aggregate Supply and Business Cycles
3 - Inflation, Unemployment and Monetary Rules
4 - Labour Markets and Supply-Side Policies
5 - Monetary Policy
6 - Fiscal Policy
7 - Consumption and Investment
8 - Money and Finance
9 - The open economy in the short run
10 - Inflation and Unemployment in the Open Economy
11 - Shocks and Policy Responses in the Open Economy
12 - Interdependent Economies
13 - Exogenous Growth Theory
14 - Endogenous and Schumpeterian Growth
15 - New Keynesian Micro-foundations
16 - Political Economy
17 - Performance and Policy in Europe, the USA and Japan
18 - Unemployment: institutions, shocks and policies

Wendy Carlin is Professor of Economics at University College London and is a Research Fellow of the Centre for Economic Policy Research. She is managing editor of the Economics of Transition and has published widely on macroeconomics, institutions, and transition. David Soskice is Research Professor at Duke University and at the Wissenschaftszentrum Berlin. He is Centennial Professor in the European Institute at the London School of Economics. He is Emeritus Fellow in Economics at University College, Oxford and has held visiting positions at the Australian National University and the universities of Berkeley, Johns Hopkins Bologna, Cornell, Pisa, Trento and Yale. He has published widely in economics, industrial relations, and political science.