Exam (elaborations)
Solution Manual For Macroeconomics, 8th Edition by Olivier Blanchard Chapter 1-24
- Course
- Institution
Solution Manual For Macroeconomics, 8th Edition by Olivier Blanchard Chapter 1-24
[Show more]
Content preview
Macroeconomics Eigh th Edition Olivier Blanchard Table of Contents Part 1 – Introduction 1: A Tour of the Worl d 01 2: A Tour of the Book 07 Part 2 – The Short Run 3: The Goods Market 12 4: Financial Markets Solution Resource Manual For Revised by Michael Casey 17 5: Goods and Financial Markets: The IS -LM Model 23 6: Financial Markets II: The Extended IS -LM Model 28 Part 3 – The Medium Run 7: The Labor Market 34 8: The Phillips Curve, the Natural Rate of Unemployment, and Inflation 39 9: From the Short to the Medium Run: The IS -LM-PC Model 44 Part 4 – The Long Run 10: The Facts of Growth 48 11: Saving, Capital Accumulation, and Output 51 12: Technological Progress and Growth 57 13: The Challenges of Growth 61 Part 5 – Expectations 14: Financial Markets and Expectations 64 15: Expectations, Consumption, and Investment 67 16: Expectations, Output, and Policy 72 Part 6 – The Open Economy 17: Openness in Goods and Financial Markets 75 18: The Goods Market in an Open Economy 80 19: Output, the Interest Rate, and the Exchange Rate 85 20: Exchange Rate Regimes 90 Part 7 – Back to Policy 21: Should Policymakers Be Restrained? 95 22: Fiscal Policy: A Summing Up 99 23: Monetary Policy: A Summing Up 103 24: Epilogue: The Story of Macroeconomics 107 Answers to End -of-Chapter Problems 111 Chapter 1. A Tour of the World I. MOTIVATING QUESTION What is macroeconomics? The chapter does not provide an explicit or formal answer. Instead, it takes you on an economic tour of the world and then describes the 2008 global macroeconomic crisis , the deepest decline since the Great Depression. This major decline in global output is known as the Great Financial Crisis. The chapter also provides an overview of t he three main economic powers of the world: the United States, the Euro area, and China. The chapter concludes with a list of other regions of the world and macroeconomic issues of growing importance. A working definition of macroeconomics at this point is the study of output, unemployment, and inflation, terms that will be defined precisely in Chapter 2. II. Why the Answer Matters This chapter attempts to provide students an incentive to master the theoretical material that follows in the remainder of the text. The implicit pro mise is that the theoretical model developed in the text will allow students to make sense of the various macroeconomic issues that continue to impact countries around the world. III. Key Tools, Concepts, and Assumptions 1. Tools and Concepts Chapter 1 does not provide any analytical tools. However, it does force students to confront some basic data and introduces data sources for various regions of the world. In addition, the chapter introduces and defines the concepts of output , growth , the unemployment rate , and the inflation rate . A more precise definition of these terms follows in Chapter 2. Chapter 1 mentions in passing the terms standard of living , productivity , and purchasing power parity . All of these terms and concepts will be explor ed in later chapters in the text. 2. Assumptions Implicit in the Tour of the World is the assumption that the same basic macroeconomic tools can be used to analyze economies throughout the world. It might be worth making this point explicitly. The macroe conomic framework developed in the text would be neither terribly useful, nor compelling as a theory, if it applied only to the United States, and not to the other market economies. IV. Summary of the Material 1. The Crisis Included in the 8th edition of the textbook is a discussion around the major macroeconomic crisis that occurred in 2008. Figure 1-1 outlines the output growth rates for the world economy, the advanced economics and for the other countries separately since 2000. From 2000 to 2 007 the world economy had a sustained expansion. Annual average world output growth was 4.5%, with advanced economies growing at 2. 7% per year, and emerging and developing economies growing at an even faster 6. 6% per year. By 2008, the world, advanced and emerging economy output growth rate began to decline marking the beginning of the macroeconomic crisis. In 2010, growth in advanced economies turned positive and has remained positive as of 2019. Highlights of the Macroeconomic Crisis: U.S. h ousing prices, which had doubled since 2000, started to decline in 2007. A number of m ortgage loans originated during the earlier expansion were to high-risk borrowers which were increasingly unable to make mortgage payments.The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller solutions. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62555 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now