Preface -- Part -- 1 Introduction and National Income Accounting -- 1. Introduction -- 1 1 Macroeconomics Encapsulated in Three Models -- 1 2 To Reiterate ... -- 1 3 Outline and Preview of the Text -- 1 4 Prerequisites and Recipes -- 2. National Income Accounting -- 2 1 The Production of Output and Payments to Factors of Production -- 2 2 Outlays and Components of Demand -- 2 3 Some Important Identities -- 2 4 Measuring Gross Domestic Product -- 2 5 Inflation and Price Indexes -- 2 6 Unemployment -- 2 7 Interest Rates and Real Interest Rates -- 2 8 Exchange Rates -- 2 9 Where to Grab a Look at the Data -- Part -- 2 Growth, Aggregate Supply and Demand, and Policy -- 3. Growth and Accumulation -- 3 1 Growth Accounting -- 3 2 Empirical Estimates of Growth -- 3 3 Growth Theory: The Neoclassical Model -- 4. Growth and Policy -- 4 1 Growth Theory: Endogenous Growth -- 4 2 Growth Policy -- 5. Aggregate Supply and Demand -- 5 1 The Aggregate Supply Curve -- 5 2 The Aggregate Demand Curve -- 5 3 Aggregate Demand Policy under Alternative Supply -- Assumptions -- 5 4 Supply-Side Economics -- 5 5 Putting Aggregate Supply and Demand Together in the Long Run -- 6. Aggregate Supply: Wages, Prices, and Unemployment -- 6 1 The Aggregate Supply Curve and the Price Adjustment Mechanism -- 6 2 Inflation and Unemployment -- 6 3 Stagflation, Expected Inflation, and the Inflation-Expectations-Augmented Phillips Curve -- 6 4 The Rational Expectations Revolution.

6 5 The Wage-Unemployment Relationship: Why Are Wages Sticky? -- 6 6 From Phillips Curve to the Aggregate Supply Curve -- 6 7 Supply Shocks -- 7. The Anatomy of Inflation and Unemployment -- 7 1 Unemployment -- 7 2 Inflation -- 7 3 The Anatomy of Unemployment -- 7 4 Full Employment -- 7 5 The Costs of Unemployment -- 7 6 The Costs of Inflation -- 7 7 Inflation and Indexation: Inflation-Proofing the Economy -- 7 8 Is a Little Inflation Good for the Economy? -- 7 9 Political Business Cycle Theory -- 8. Policy Preview -- 8 1 A Media Level View of Practical Policy -- 8 2 Policy as a Rule -- 8 3 Interest Rates and Aggregate Demand -- Part -- 3 First Models -- 9. Income and Spending -- 9 1 Aggregate Demand and Equilibrium Output -- 9 2 The Consumption Function and Aggregate Demand -- 9 3 The Multiplier -- 9 4 The Government Sector -- 9 5 The Budget -- 9 6 The Full-Employment Budget Surplus -- 10. Money, Interest, and Income -- 10 1 The Goods Market and the IS Curve -- 10 2 The Money Market and the LM Curve -- 10 3 Equilibrium in the Goods and Money Markets -- 10 4 Deriving the Aggregate Demand Schedule -- 10 5 A Formal Treatment of the IS-LM Model -- 11. Monetary and Fiscal Policy -- 11 1 Monetary Policy -- 11 2 Fiscal Policy and Crowding Out -- 11 3 The Composition of Output and the Policy Mix -- 11 4 The Policy Mix in Action -- 12. International Linkages -- 12 1 The Balance of Payments and Exchange Rates -- 12 2 The Exchange Rate in the Long Run.

12 3 Trade in Goods, Market Equilibrium, and the Balance of Trade -- 12 4 Capital Mobility -- 12 5 The Mundell-Fleming Model: Perfect Capital Mobility under Fixed -- Exchange Rates -- 12 6 Perfect Capital Mobility and Flexible Exchange Rates -- Part -- 4 Behavioral Foundations -- 13. Consumption and Saving -- 13 1 The Life-Cycle / Permanent-Income Theory of Consumption and Saving -- 13 2 Consumption under Uncertainty: The Modern Approach -- 13 3 Further Aspects of Consumption Behavior -- 14. Investment Spending -- 14 1 The Stock Demand for Capital and the Flow of Investment -- 14 2 Investment Subsectors / Business Fixed, Residential, and Inventory -- 14 3 Investment and Aggregate Supply -- 15. The Demand for Money -- 15 1 Components of the Money Stock -- 15 2 The Functions of Money -- 15 3 The Demand for Money: Theory -- 15 4 Empirical Evidence -- 15 5 The Income Velocity of Money -- 16. The Fed, Money, and Credit -- 16 1 Money Stock Determination: The Money Multiplier -- 16 2 The Instruments of Monetary Control -- 16 3 The Money Multiplier and Bank Loans -- 16 4 Control of the Money Stock and Control of the Interest Rate -- 16 5 Money Stock and Interest Rate Targets -- 16 6 Money, Credit, and Interest Rates -- 16 7 Which Targets for the Fed? -- 17. Policy -- 17 1 Lags in the Effects of Policy -- 17 2 Expectations and Reactions -- 17 3 Uncertainty and Economic Policy -- 17 4 Targets, Instruments, and Indicators: A Taxonomy -- 17 5 Activist Policy.

17 6 Which Target? / A Practical Application -- 17 7 Dynamic Inconsistency and Rules Versus Discretion -- 18. Financial Markets and Asset Prices -- 18 1 Interest Rates: Long and Short Term -- 18 2 The Random Walk of Stock Prices -- 18 3 Exchange Rates and Interest Rates -- Part -- 5 Big Events, International Adjustments, and Advanced Topics -- 19. Big Events: the Economics of Depression, Hyperinflation, and Deficits -- 19 1 The Great Depression: The Facts -- 19 2 The Great Depression: The Issues and Ideas -- 19 3 Money and Inflation in Ordinary Business Cycles -- 19 4 Hyperinflation -- 19 5 Deficits, Money Growth, and the Inflation Tax -- 19 6 Budget Deficits: Facts and Issues -- 19 7 Social Security -- 20. International Adjustment and Interdependence -- 20 1 Adjustment under Fixed Exchange Rates -- 20 2 Exchange Rate Changes and Trade Adjustment: Empirical Issues -- 20 3 The Monetary Approach to the Balance of Payments -- 20 4 Flexible Exchange Rates, Money, and Prices -- 20 5 Interest Differentials and Exchange Rate Expectations -- 20 6 Exchange Rate Fluctuations and Interdependence -- 20 7 The Choice of Exchange Rate Regimes -- 21. Advanced Topics -- 21 1 An Overview of the New Macroeconomics -- 21 2 The Rational Expectations Revolution -- 21 3 The Microeconomics of the Imperfect Information Aggregate Supply -- Curve -- 21 4 The Random Walk of GDP: Does Aggregate Demand Matter, or Is It All -- Aggregate Supply? -- 21 5 Real Business Cycle Theory.

21 6 A New Keynesian Model of Sticky Nominal Prices -- 21 7 Bringing It All Together -- Glossary -- Index.