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• Contents
• List of Figures
• List of Tables
• List of Boxes
• About the Authors
• About the Book
• Tour of the book
• Preface
• Acknowledgements
• Website Materials
• 1 Introduction
• 1.1 What is Economics? Two Views
• 1.2 Economics and the Public Purpose
• 1.3 What is Macroeconomics?
• Conclusion
• References
• 2 How to Think and Do Macroeconomics
• 2.1 Introduction
• 2.2 Thinking in a Macroeconomic Way
• 2.3 What Should a Macroeconomic Theory be Able to Explain?
• 2.4 Why is it so Difficult to Come to an Agreement on Policy? The Minimum Wage Debate
• 2.5 The Structure of Scientific Revolutions
• Conclusion
• References
• Chapter 2 Appendix: The Buckaroos model
• 3 A Brief Overview of Economic History and the Rise of Capitalism
• 3.1 Introduction
• 3.2 An Introduction to Monetary Capitalism
• 3.3 Tribal Society
• 3.4 Slavery
• 3.5 Feudalism
• 3.6 Revolts and the Transition to Capitalism
• 3.7 Capitalism
• 3.8 Monetary Capitalism
• 3.9 Global Capitalism
• 3.10 Economic Systems of the Future?
• Conclusion
• References
• 4 The System of National Income and Product ­Accounts
• 4.1 Measuring National Output
• 4.2 Components of GDP
• 4.3 Equivalence of Three Measures of GDP
• 4.4 GDP versus GNP
• 4.5 Measuring Gross and Net National Income
• 4.6 GDP Growth and the Price Deflator
• 4.7 Measuring Chain Weighted Real GDP
• 4.8 Measuring CPI Inflation
• 4.9 Measuring National Inequality
• Conclusion
• References
• 5 Labour Market Concepts and Measurement
• 5.1 Introduction
• 5.2 Measurement
• 5.3 Categories of Unemployment
• 5.4 Broader Measures of Labour Underutilisation
• 5.5 Flow Measures of Unemployment
• 5.6 Duration of Unemployment
• 5.7 Hysteresis
• Conclusion
• References
• 6 Sectoral Accounting and the Flow of Funds
• 6.1 Introduction
• 6.2 The Sectoral Balances View of the National Accounts
• 6.3 Revisiting Stocks and Flows
• 6.4 Integrating NIPA, Stocks, Flows and the Flow of Funds Accounts
• 6.5 Balance Sheets
• 6.6 The Flow of Funds Matrix
• Conclusion
• References
• 7 Methods, Tools and Techniques
• 7.1 Overview
• 7.2 Basic Rules of Algebra
• 7.3 A Simple Macroeconomic Model
• 7.4 Graphical Depiction of a Macroeconomic Model
• 7.5 Power Series Algebra and the Expenditure Multiplier
• 7.6 Index Numbers
• 7.7 Annual Average Growth Rates
• 7.8 Textbook Policy Regarding Formalism
• Conclusion
• 8 The Use of Framing and Language in Macroeconomics
• 8.1 Introduction
• 8.2 MMT and Public Discourse
• 8.3 Two Visions of the Economy
• 8.4 Cognitive Frames and Economic Commentary
• 8.5 Dominant Metaphors in Economic Commentary
• 8.6 Face to Face: Mainstream Macro and MMT
• 8.7 Framing a Macroeconomics Narrative
• Conclusion
• References
• 9 Introduction to Sovereign Currency: The Government and its Money
• 9.1 Introduction
• 9.2 The National Currency (Unit of Account)
• 9.3 Floating versus Fixed Exchange Rate Regimes
• 9.4 IOUs Denominated in National Currency: Government and Non-Government
• 9.5 Use of the Term ‘Money’: Confusion and Precision
• Conclusion
• References
• 10 Money and Banking
• 10.1 Introduction
• 10.2 Some Definitions
• 10.3 Financial Assets
• 10.4 What Do Banks Do?
• Conclusion
• References
• 11 The Classical System
• 11.1 Introduction
• 11.2 The Classical Theory of Employment
• 11.3 Unemployment in the Classical Labour Market
• 11.4 What is the Equilibrium Output Level in the Classical Model?
• 11.5 The Loanable Funds Market, Classical Interest Rate Determination
• 11.6 Classical Price Level Determination
• 11.7 Summary of the Classical System
• 11.8 Pre-Keynesian Criticisms of the Classical Denial of Involuntary Unemployment
• Conclusion
• References
• 12 Mr. Keynes and the ‘Classics’
• 12.1 Introduction
• 12.2 The Existence of Mass Unemployment as an Equilibrium Phenomenon
• 12.3 Keynes’ Critique of Classical Employment Theory
• 12.4 Involuntary Unemployment
• 12.5 Keynes’ Rejection of Say’s Law: The Possibility of General Overproduction
• Conclusion
• References
• 13 The Theory of Effective Demand
• 13.1 Introduction
• 13.2 The D-Z Approach to Effective Demand
• 13.3 Introducing Two Components of Aggregate Demand: D1 and D2
• 13.4 Advantages of the D-Z Framework
• 13.5 The Role of Saving and Liquidity Preference
• 13.6 The Demand Gap Arguments and Policy Implications
• Conclusion
• Reference
• 14 The Macroeconomic Demand for Labour
• 14.1 Introduction
• 14.2 The Macroeconomic Demand for Labour Curve
• 14.3 The Determination of Employment and the Existence of Involuntary Unemployment
• 14.4 A Classical Resurgence Thwarted
• Conclusion
• References
• 15 The Aggregate Expenditure Model
• 15.1 Introduction
• 15.2 A Simple Aggregate Supply Depiction
• 15.3 Aggregate Demand
• 15.4 Private Consumption Expenditure
• 15.5 Private Investment
• 15.6 Government Spending
• 15.7 Net Exports
• 15.8 Total Aggregate Expenditure
• 15.9 Equilibrium National Income
• 15.10 The Expenditure Multiplier
• Conclusion
• References
• 16 Aggregate Supply
• 16.1 Introduction
• 16.2 Some Important Concepts
• 16.3 Price Determination
• 16.4 The Aggregate Supply Function (AS)
• 16.5 What Determines the Level of Employment?
• 16.6 Factors Affecting Aggregate Output per Hour
• Conclusion
• Reference
• 17 Unemployment and Inflation
• 17.1 Introduction
• 17.2 What is Inflation?
• 17.3 Inflation as a Conflictual Process
• 17.4 The Quantity Theory of Money
• 17.5 Incomes Policies
• Conclusion
• References
• 18 The Phillips Curve and Beyond
• 18.1 Introduction
• 18.2 The Phillips Curve
• Econometric misspecification
• 18.3 The Accelerationist Hypothesis and the Expectations Augmented Phillips Curve
• 18.4 Hysteresis and the Phillips Curve Trade-off
• 18.5 Underemployment and the Phillips Curve
• Conclusion
• References
• 19 Full Employment Policy
• 19.1 Introduction
• 19.2 Full Employment as the Policy Goal
• 19.3 Policies for the Promotion of Employment
• 19.4 Unemployment Buffer Stocks and Price Stability
• 19.5 Employment Buffer Stocks and Price Stability
• 19.6 Impact on the Phillips Curve
• Conclusion
• References
• 20 Introduction to Monetary and Fiscal Policy Operations
• 20.1 Introduction
• 20.2 The Central Bank
• 20.3 The Treasury
• 20.4 Coordination of Monetary and Fiscal Operations
• 20.5 Taxes and Sovereign Spending
• 20.6 Currency Sovereignty and Policy Independence
• Conclusion
• References
• Chapter 20 Appendix: Advanced Material
• 21 Fiscal Policy in Sovereign Nations
• 21.1 Introduction
• 21.2 Functional Finance versus Sound Finance
• 21.3 Fiscal Policy Debates: Crowding Out and (Hyper) Inflation
• Conclusion
• References
• 22 Fiscal Space and Fiscal Sustainability
• 22.1 Introduction
• 22.2 The Full Employment Fiscal Deficit Condition
• 22.3 Fiscal Space and Fiscal Sustainability
• 22.4 The Debt Sustainability Debate
• Conclusion
• References
• 23 Monetary Policy in Sovereign Nations
• 23.1 Introduction
• 23.2 Modern Banking Operations
• 23.3 Interest Rate Targets versus Monetary Targets
• 23.4 Liquidity Management
• 23.5 Implementation of Monetary Policy
• 23.6 Unconventional Forms of Monetary Policy
• 23.7 Monetary Policy in Practice
• 23.8 The Advantages and Disadvantages of Monetary Policy
• 23.9 Central Bank Independence
• 23.10 Horizontal and Vertical Operations: An Integration
• Conclusion
• References
• 24 Policy in an Open Economy: Exchange Rates, Balance of Payments and Competitiveness
• 24.1 Introduction
• 24.2 The Balance of Payments
• 24.3 Essential Concepts
• 24.4 Aggregate Demand and the External Sector Revisited
• 24.5 Trade in Goods and Services, Product Market Equilibrium and the Trade Balance
• 24.6 Capital Controls
• Conclusion
• References
• 25 The Role of Investment in Profit Generation
• 25.1 Investment in a Capitalist Monetary Economy
• 25.2 The Accelerator Model of Investment
• 25.3 The Flexible Accelerator Model
• 25.4 Expectations and Interest Rate Impacts on Investment Demand
• 25.5 Introduction to Cash Flow Discounting and Present Value
• 25.6 Keynes and the Marginal Efficiency of Investment
• 25.7 Minsky’s Model of the Investment Decision
• 25.8 Investment and Profits
• 25.9 Business Cycles: Fluctuations in Economic Activity
• Conclusion
• References
• 26 Stabilising the Unstable Economy
• 26.1 Introduction
• 26.2 Economic Cycles and Crises
• 26.3 Marxist Theory of Crisis
• 26.4 Keynesian and Post-Keynesian Theories of Crisis
• 26.5 Minsky’s Financial Instability Hypothesis
• Conclusion
• References
• 27 Overview of the History of Economic Thought
• 27.1 Introduction
• 27.2 History of Neoclassical Theory
• 27.3 History of Heterodox Thought
• 27.4 Institutional Economics
• 27.5 Modern Orthodox Schools of Thought
• 27.6 Post-War Economic History and History of Thought
• Conclusion
• References
• 28 The IS-LM Framework
• 28.1 Introduction and the Concept of General Equilibrium
• 28.2 The Money Market: Demand, Supply and Equilibrium
• 28.3 Derivation of the LM Curve
• 28.4 The Product (Goods) Market: Equilibrium Output
• 28.5 Derivation of the IS Curve
• 28.6 Equilibrium and Policy Analysis in the IS-LM Framework
• 28.7 Introducing the Price Level: The Keynes and Pigou Effects
• 28.8 Limitations of the IS-LM Framework
• Conclusion
• References
• Chapter 28 Appendix: The IS-LM Algebra
• 29 Modern Schools of Economic Thought
• 29.1 Introduction
• 29.2 The Rise of New Classical Economics
• 29.3 Real Business Cycle Theory
• 29.4 New Keynesian Economics
• 29.5 Modern Heterodox Schools of Thought
• Conclusion
• References
• 30 The New Monetary Consensus in Macroeconomics
• 30.1 Introduction
• 30.2 Components of the NMC theory
• 30.3 Weaknesses of the NMC
• Conclusion
• References
• Chapter 30 Appendix:The New Monetary Consensus model
• 31 Recent Policy Debates
• 31.1 Introduction
• 31.2 Ageing, Social Security, and the Intergenerational Debate
• 31.3 The Twin Deficits Hypothesis
• 31.4 Balance of Payments Constraints and Currency Crises
• 31.5 Fixed versus Flexible rates: Optimal Currency Areas, the Bancor, or Floating Rates?
• Conclusion
• 31.6 Environmental Sustainability and Economic Growth
• References
• Chapter 31 Appendix 1: Case Study 1 – Economic Growth: Demand or Supply Constrained? The US, 1975
• Chapter 31 Appendix 2: Case Study 2 – The Return of Secular Stagnation? US Labour Markets after th
• Chapter 31 Appendix 3: The US Social Security and Medicare Systems
• 32 Macroeconomics in the Light of the Global Financial Crisis
• 32.1 Introduction
• 32.2 Why Didn’t Mainstream Macroeconomics Foresee the GFC?
• 32.3 Who Did Foresee the GFC and Why?
• 32.4 Lessons That Can be Learned About Sovereign Currency From the Eurozone Crisis
• Conclusion
• References
• 33 Macroeconomics for the Future
• 33.1 Introduction
• 33.2 Modelling Framework
• 33.3 Government and the Monetary System
• 33.4 Monetary Policy
• 33.5 Private Banks
• 33.6 Trade and Exchange Rates
• Conclusion
• Further Reading
• Index