Macroeconomics

This textbook introduces definitions and measures of macroeconomic concepts along with stylised facts, with a focus on European countries. The reader is guided step by step through the analytical and graphical development of simple macroeconomic models, starting with the (Classical) long run and then moving to the (Keynesian) short run, the (Neo Keynesian) medium run and to endogenous and exogenous growth. Special attention is paid to the impact of market power, to government regulation and competition policy, and to the effectiveness of monetary and fiscal policies in closed and open economies. Growth theory is complemented with growth and environmental accounting, the production of technological progress and the role of unemployment. Considerable space is devoted to issues that take centre stage in the economic policy debate: from income inequality to international competitiveness, from the role of leverage and risk taking in financial crises to austerity and government debt dynamics, from the economic impact of the Covid pandemic to the zero-lower-bound, from the persistence of unemployment to the inflationary impacts of shocks to the price of oil and gas. Elementary mathematics and statistics are employed throughout the book without apologies.