321LecNote01Ch1

321LecNote01Ch1 - Instructor : Kim, H.H. Fall 2009...

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Instructor : Kim, H.H. Intermediate Macro Analysis Fall 2009 Economics 01:220:321 1 Chapter 1 Science of Macroeconomics Important issues in macroeconomics ± What causes recessions? What is “government stimulus” and why might it help? ± How can problems in the housing market spread to the rest of the economy? ± What is the government budget deficit? How does it affect workers, consumers, businesses, and taxpayers? Important issues in macroeconomics ± Why does the cost of living keep rising? ± Why are so many countries poor? What policies might help them grow out of poverty? ± What is the trade deficit? How does it affect the country’s well-being? U.S. Real GDP per capita (2000 dollars) U.S. Inflation Rate (% per year)
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Instructor : Kim, H.H. Intermediate Macro Analysis Fall 2009 Economics 01:220:321 2 U.S. Unemployment Rate (% of labor force) Why learn macroeconomics? 1. The macroeconomy affects society’s well-being.
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Instructor : Kim, H.H. Intermediate Macro Analysis Fall 2009 Economics 01:220:321 3 2. The macroeconomy affects your well-being. 3. The macroeconomy affects election outcomes. perc ent of labo r forc e crim es per 100, 000 pop ulati on U.S. Unemployment and Property Crime Rates Unemployment (left scale) Property crimes (right scale) -3 -2 -1 0 1 2 3 4 1965 1970 1975 1980 1985 1990 1995 2000 2005 -7 -5 -3 -1 1 3 unemployment rate inflation-adjusted mean wage (right scale) ch an ge fro m 12 m os ea rli er pe rc en t ch an ge fro m 12 m os ea rli er In most years, wage growth falls when unemployment is rising.
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Instructor : Kim, H.H.
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321LecNote01Ch1 - Instructor : Kim, H.H. Fall 2009...

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