Économie+

Macroeconomics studies the economy as a whole: the major aggregates of output, prices and employment, the monetary and fiscal policies that steer them, the role of money and the financial system, and the international dimension of trade. It also addresses the dynamics of growth and crises, and the theoretical models that account for them. A command of these broad balances provides an essential framework for interpreting economic news and understanding the factors that durably influence markets. The sheets in this discipline set out its foundations progressively, from elementary notions to the most advanced developments.

The 17 sheets in this discipline

  1. 1What is GDP?GDP (Gross Domestic Product) is the central indicator of national accounting. It measures the monetary value of all final goods and services produced within a country's borders over a given period. Mankiw presents it as the most closely watched economic statistic in the world, as it summarizes an entire nation's economic activity in a single figure.
  2. 2Understanding InflationInflation is the general, sustained and self-reinforcing rise in the price level within an economy. Mankiw presents it as one of the most important macroeconomic phenomena to master, as it directly affects purchasing power, interest rates, wages, and all economic decisions made by agents.
  3. 3Unemployment and the Labor MarketThe unemployment rate measures the share of the labor force without a job and actively seeking one — one of the indicators most closely watched by markets. It is a lagging indicator of the business cycle (firms shed jobs after the downturn starts and rehire once recovery takes hold), and it directly influences monetary and fiscal policy decisions.
  4. 4Financial MarketsFinancial markets connect agents who need financing (firms, States) with those who have savings to invest. Together with financial intermediaries (banks, funds), they form what Mankiw calls the financial system, ensuring the efficient allocation of capital and the pricing of risk through the mechanisms of supply and demand.
  5. 5Monetary PolicyMonetary policy refers to a central bank's actions on interest rates and the money supply to ensure price stability. Its decisions pass through to financial markets immediately, but only reach the real economy — credit, investment, consumption — after a lag of 12 to 18 months.
  6. 6Fiscal PolicyFiscal policy is the government's use of public spending and taxation to steer activity—stimulus, multiplier, deficit and debt. Mankiw presents it as the second major lever of macroeconomic policy, complementary to monetary policy, with potentially more direct effects on aggregate demand but also long-term sustainability constraints.
  7. 7International TradeInternational trade refers to all exchanges of goods and services between national economies. Mankiw devotes foundational chapters to it, demonstrating that the principle of comparative advantage — each country benefits from specializing in the goods for which its opportunity cost is lowest — is one of the most robust propositions in economics.
  8. 8Aggregate Supply and DemandThe aggregate supply and demand (AD-AS) model constitutes the central analytical framework of macroeconomics. Mankiw presents it as the fundamental tool for understanding short-run economic fluctuations: how the general price level and total output are determined, and how economic shocks and policies affect them.
  9. 9Savings and InvestmentSavings and investment determine an economy's long-run level of wealth. Mankiw devotes an entire chapter to the market for loanable funds in each of his editions, showing that national savings finance productive investment and that the real interest rate is the equilibrium price between the supply of funds (savings) and the demand for funds (investment).
  10. 10Money and the Banking SystemMoney is the most liquid asset in the economy, serving as a medium of exchange, a unit of account, and a store of value. This explanation shows how money is created, how the banking system multiplies it, and why controlling the money supply lies at the heart of macroeconomic policy.
  11. 11Business Cycles and CrisesThe economy moves in cycles, alternating between expansions and contractions. The literature shows that short-run fluctuations are inherent to the functioning of market economies and that understanding them is essential to anticipate turning points, adapt public policies, and manage financial risks.
  12. 12The Solow Model and Long-Run GrowthThe Solow model constitutes the reference framework for understanding long-run economic growth. Mankiw devotes two full chapters to it (ch. 8 and 9, 9th ed.) and considers it one of the most important contributions of 20th-century macroeconomics. It explains why some countries are rich and others poor, and why standards of living differ so much across the world.
  13. 13The IS-LM Model and Macroeconomic EquilibriumThe IS-LM model is the central analytical framework for understanding the interactions between the market for goods and services and the money market in the short run. Mankiw devotes two full chapters to it (ch. 11-12, 9th ed.) and presents it as the most influential interpretation of Keynesian thought, indispensable for analyzing the effects of monetary and fiscal policy.
  14. 14Rational Expectations and the New Classical MacroeconomicsRational expectations theory, developed by John Muth (1961) and popularized by Robert Lucas (Nobel Prize 1995), holds that economic agents make optimal use of all available information to form their forecasts. Mankiw presents it in Chapter 14 (9th ed., "Aggregate Supply and the Short-Run Tradeoff") as one of the major intellectual revolutions in macroeconomics, having called into question the effectiveness of stabilization policies.
  15. 15The Political Economy of Public DebtThe political economy of public debt analyzes the political determinants of state borrowing, the mechanisms of debt sustainability, and the strategic interactions between governments, creditors, and voters. Mankiw devotes the chapter "Government Debt and Budget Deficits" of his macroeconomics textbook to this topic, presenting the foundational debates about debt: burden on future generations, Ricardian neutrality, and accumulation dynamics.
  16. 16Advanced Labor Market and Job Search TheoriesThe labor market does not function like an ordinary goods market: matches between workers and jobs take time, information is imperfect, and institutional frictions create persistent unemployment. Mankiw covers the fundamentals of the labor market in Chapter 7 (9th ed., "Unemployment") and its links with the business cycle in Chapters 10 and 14.
  17. 17Behavioral Economics and Cognitive BiasesBehavioral economics incorporates insights from psychology to understand real-world economic decisions, which are often irrational. Mankiw devotes growing boxes to it, acknowledging that economic agents do not always match the rational homo economicus of classical models.
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