The main focus of this book, first published in 1977, is the construction and analysis of an integrated macroeconomic model. In this exercise, four main aspects are stressed that has not previously received adequate textbook attention. The 'intrinsic dynamics' of the macroeconomic system are emphasized, as well as developments in inflation theory, particularly pertaining to the role of inflationary expectations. In addition, several chapters are devoted to the international aspects of macroeconomics, and their thorough coverage makes this book especially relevant to countries that are heavily dependant on international trade. Several aspects of stabilization policy are also discussed in detail, and an introduction to optimal stabilization theory is also provided. The book is appropriate to advanced undergraduate and postgraduate courses in macroeconomics.
Preface; 1. introduction and overview; Part I. The Closed Economy: 2. Review of basic macroeconomic model; 3. The formulation of a consistent macroeconomic model; 4. the dynamics of the government budget constraint; 5. The wage-price sector; 6. A short-run integrated macroeconomic model; 7. An intermediate ruin macroeconomic model; 8. A long run model; Part III. The Open Economy: 9. Review of static macroeconomic models of a small open economy; 10. Imported inflation and government policies in a short-run open macroeconomic model; 11. The dynamics of an open economy with fixed exchange rate and fixed prices; 12. Imported inflation and government policies in a dynamic open macroeconomic model; Part III. Stabilization Policies: 13. An introduction to stabilization theory and policy; 14. Optimal stabilization theory; Notes; References; Index.