John Jackson,
RMIT University Ron McIver,
University of South Australia
ISBN: 007471323x Copyright year: 2004
About this Book
ORGANISATION AND CONTENT
The material in the Macroeconomics volume is also organised under five basic topics:
Part 1
Part 2
Part 3
Part 4
Part 5
Introduction to economics
Macroeconomic activity and fiscal policy
Monetary policy and economic stability
Growth and development
Exchange rates and the international monetary system
Part 1 of Macroeconomics is designed to introduce the method and subject matter of economics, and also the ideological framework of the Australian economy. Chapters 1 to 3 are, as already mentioned, substantively the same in both books. However, each establishes a foundation and context for different material in the later chapters. The subject of Chapter 1 is the methodology of economics, while Chapter 2 is devoted to defining and explaining the economising problem. Chapter 2 also examines the economic basis for trade and provides a brief examination of Australia's pattern of trade. Chapter 3 provides an introduction to the most fundamental institution of capitalism-the market, or price, system-through its introduction to the supply-demand model. This is designed to contribute to an understanding of employment theory in Part 2-specifically, the topics of inflation and deflation.
Part 2 of Macroeconomics introduces the student to mainstream macroeconomic theory and fiscal policy. Chapter 4 is on national income accounting and the Australian balance of payments. Some lecturers may choose to truncate this discussion by omitting the income approach to GDP, which some may consider to be less relevant to the following chapters than the expenditures approach. Chapter 5 reviews the characteristics, causes and consequences of cyclical fluctuations and Australia's current account problems. There is also a related discussion of national saving. Chapters 6 and 7 present the aggregate expenditures model. Chapters 8 and 9 provide a detailed examination of macroeconomic employment theory-fiscal policy and the public debt within the AD-AS format. The presentation of the key 'determinants' of each of the aggregate demand and aggregate supply curves is an important feature of these chapters. The impact of the foreign sector on both aggregate demand and the effectiveness of fiscal policy introduces the student to some of the complexities facing the modern policy-maker.
Part 3 of Macroeconomics initially emphasises the balance-sheet approach to money and banking in Chapters 10 and 11. This approach seems most in accord with the goal of providing the student with an analytical tool needed to reason through, as opposed to memorising, the economic impact of the various basic banking transactions. Just as fiscal policy is linked directly to income theory in Part 2, monetary policy immediately follows the discussion of money and banking. Chapter 12 on monetary policy provides a presentation and discussion of monetary policy that is consistent with the approach stated by the Reserve Bank of Australia. As with fiscal policy, the impact of the foreign sector on the effectiveness of monetary policy is discussed in detail. In Chapters 13, 14 and 15 there is considerable discussion of some of the alternative schools of economic thought, followed by a rather detailed look at the relationship between inflation and unemployment, incomes policies, the history of wage setting in Australia, and related policy issues.
Part 4 provides a brief introduction to economic growth and development, and to related problems and controversies.
The two chapters of Part 5 survey international trade and finance, providing coverage of elementary models of the determination of exchange rates, and a broad but brief review of the international monetary system and its history.
2004
McGraw-Hill Australia