Macroeconomics: An Introduction by Paul Krugman and Robin Wells
Our goal in Macroeconomics is simple: to give students a macro principles textbook they will find relevant to the world around them—a textbook that will allow them to read page 1 of The Wall Street Journal or page C1 of The New York Times with enhanced understanding.
As in our Microeconomics text, we accomplish this goal by integrating the models closely with real-world examples, so that the relevance of the theoretical concepts is clear throughout. Our examples cover a wide range of macroeconomic experience, turning not just to recent U.S. macroeconomic history but also to the interwar period (we emphasize the role of the Great Depression in giving rise to macroeconomics as a field) and to international experience, such as Japan’s use of public works spending to support its economy in the 1990s and Brazil’s deficit-driven inflation from 1985 to 1995.
Sequence of Topics
The table of contents for Macroeconomics appears on the facing page. Our sequence runs as follows: introductory material (Parts 1 and 2) followed by macroeconomic concepts and measurement (Part 3), long-run macroeconomics (Part 4), short-run fluctuations (Part 5), medium-run aggregate supply and inflation (Part 6), and the open economy (Part 8). We also include a special part on events and ideas (Part 7).
This structure reverses a recent tendency in textbooks to emphasize the long run over the short run. Long-run growth is an important topic; so is long-run inflation. But in our view, it’s a disservice to students to deemphasize short-run issues in favor of “safer” long-run topics: Short-run fluctuations should have a central, though not dominant, place in a macro principles text. After all, recent economic events make it clear that traditional concerns about recession and recovery remain as important as ever; the same goes for traditional debates about monetary and fiscal policy. So, unlike some textbooks that truncate discussion of these topics, we place them at the center of the exposition.
This is not to say that we give short shrift to the long run. A good discussion of the long run is essential, among other reasons to set the context for the short-run discussion. Discussions of long-run growth can be revelatory to students who do not have a sense of how much the
U.S. economy has grown, and how stark the differences between nations remain. But we still have relatively little to say about how economic policy can promote growth.
In short-run macroeconomics, on the other hand, insights about policy—about how governments and central banks can act to reverse slumps—are revelatory to students. In addition, the theoretical controversies that probably deterred some textbook authors from covering short-run policy issues extensively have eased in recent years: Although the Lucas critique and other challenges to traditional analyses of macroeconomic policy have left a deep mark on the field, a broad professional consensus has emerged that monetary and fiscal policy do indeed matter.
The medium-run issues of inflation and stagflation also seem due for some de-emphasis, mainly because they have become more historical issues than the subjects of current controversy. This could change by the second edition of our textbook! But at least for now, the problems of inflation and disinflation that were so central to macroeconomic discussion in the 1980s seem rather remote.
Finally, we believe that open-economy issues deserve more attention than they usually get but must be approached in the right spirit. The time is not yet ripe, we believe, to emphasize open-economy issues from the beginning: Despite the growing importance of capital flows to the
U.S. economy, a textbook written for the U.S. market can and, we believe, should put the open-economy aspects of macroeconomics to one side while developing the basic framework.
International Examples Throughout
In developing that framework, we believe that we should avail ourselves freely of international examples. Rather than rely solely or even primarily on U.S. experience for real-world illustrations of economic principles, we draw heavily on the experiences of other countries. In writing a macroeconomics text with a strong international flavor throughout, we have listened to the encouragement of reviewers and focus-group participants.
Although we do not integrate international issues into macroeconomics from the beginning, we do offer a thorough discussion of the special issues associated with international macroeconomics. The dilemmas of choosing an exchange-rate regime, or the risk of economic crisis due to capital flight, are not (yet?) major issues for the United States, but they preoccupy much of the world, and we believe that they deserve to be covered even in a U.S.-centric principles text.
If you have any questions about Macroeconomics, please write to us at PaulKrugmanAndRobinWells@worthpub.com
