Feature Summary

The new edition has been comprehensively revised to bring the text right up-to-date. Here are some of the key content changes that you will see in the new seventh edition:

Macroeconomics: New coverage of monetary policy from a fresh, up-to-date perspective
In response to changes in real-world monetary policy, the macroeconomics coverage of the new edition moves from a traditional nominal money supply target model to the use of flexible inflation targets. Economics is the first European text to take this fresh new approach, which more accurately reflects current monetary policy in the UK and beyond. The new approach involves the following key changes:

• Expanded and improved exchange rate coverage in 2 chapters
  Chapter 28 covers the balance of payments, internal and external balance, fixed and floating regimes, and features new and expanded coverage of equilibrium long run exchange rate and the relation to foreign debt. Chapter 29 deals with issues integral to open economy macroeconomics, such as devaluation and monetary and fiscal policy under fixed and floating exchange rates. Restructured chapters bring the text fully up-to-date and to improve the coverage of open economy macroeconomics, aligned to the way economies function in the real world.
• Streamlined coverage of banks, money creation, and the money supply
  Chapter 22 pares down the coverage of money and banking to the important concepts that students need to know and understand. The chapter also integrates the discussion of money demand and pulls together related topics to make the relationships of money and banking clearer and easier for students to follow and digest.
• Integration of Interest Rates and Money Transmission
  Chapter 23 has been revised and restructured, maintaining the discussion of central bank roles but adding interest rates and the transmission mechanism of monetary policy.
• Increased coverage of key models and theories
  Including IS/LM, and in particular, LM, dealing with different intermediate targets for guiding interest rate policy. Introduces the Taylor rule as a unifying principle, a model that can be used for fixed prices and adjustable prices to illustrate flexible inflation targeting. The Taylor Rule is carried through into Chapter 25 and 26, offering students a useful economic tool that is consistently developed for clarity and integration between chapters.

Microeconomics: Comprehensive revision and updates throughout
The Microeconomics coverage has been comprehensibly revised, restructured and updated.

• Restructuring of microeconomics coverage
  The full section of microeconomics has undergone full revisions, including new boxes, data, tables and figures. The introductory section of Chapters 1-3 has been revised and reworked to streamline the coverage and to focus on key topics from the outset, giving students clear direction on what is to follow.
• New and expanded coverage of game theory
  The text covers the important and expanding hot topic of game theory in comprehensive depth. Chapter 9 focuses on the aspects of game theory that are of interest to students and make microeconomics thought provoking and fun. This includes expanded coverage and new figures featuring the Prisoner's Dilemma, and the Nash equilibrium. Also, new coverage in this chapter of Cournot behaviour and Joseph Bertrand's model of oligopoly.