This ebook, Macroeconomics: A European Perspective 3rd edition (PDF) gives economics students a thorough understanding of macroeconomics by taking a unified view of the subject, allowing connections to be made between the long, medium and the short run. Re-written by best-selling authors almost from scratch in light of the experience of the Great Recession, this etextbook is essential reading for anyone studying macroeconomics in the aftermath of the financial crisis.
The ebook has been re-written almost from scratch after a thorough re-think of how macroeconomics should be taught after the financial crisis.
Among the new features:
- The textbook recognizes that modern central banks set interest rates, not the quantity of money: this gets rid of the LM curve greatly simplifying the discussion of financial markets
- The yield curve now incorporates a risk premium, whose fluctuations have been central to the crisis, especially since Quantitative Easing policies have shown that monetary policy can affect this premium
- It presents the Medium Run starting directly from the Phillips curve, thus avoiding the intermediate AS-AD step which was clunky, and, for good reasons, undergraduate students find it very difficult to understand. Output above potential, or unemployment below the natural rate put upward pressure on inflation. The nature of the pressure depends on the formation of expectations, an issue central to current developments
“This is a truly outstanding textbook that beautifully marries theory, empirics and policy. It is surely destined to become the gold standard against which all other textbooks must be measured” Charles Bean, Deputy Governor, Bank of England.