DOCSLIB.ORG

Principles of Macroeconomics the Pearson Series in Economics

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Principles of Macroeconomics the Pearson Series in Economics TENTH EDITION Principles of Macroeconomics The Pearson Series in Economics Abel/Bernanke/Croushore Hartwick/Olewiler Parkin Macroeconomics* The Economics of Natural Resource Use Economics* Bade/Parkin Heilbroner/Milberg Perloff Foundations of Economics* The Making of the Economic Society Microeconomics* Berck/Helfand Heyne/Boettke/Prychitko Microeconomics: Theory and Applications The Economics of the Environment The Economic Way of Thinking with Calculus* Bierman/Fernandez Hoffman/Averett Perman/Common/McGilvray/Ma Game Theory with Economic Applications Women and the Economy: Family, Work, Natural Resources and Environmental Blanchard and Pay Economics Macroeconomics* Holt Phelps Blau/Ferber/Winkler Markets, Games and Strategic Behavior Health Economics The Economics of Women, Men and Work Hubbard/O’Brien Pindyck/Rubinfeld Boardman/Greenberg/Vining/ Economics* Microeconomics* Weimer Money, Banking, and the Financial System* Riddell/Shackelford/Stamos/ Cost-Benefit Analysis Hughes/Cain Schneider Boyer American Economic History Economics: A Tool for Critically Understanding Society Principles of Transportation Economics Husted/Melvin Branson International Economics Ritter/Silber/Udell Macroeconomic Theory and Policy Principles of Money, Banking & Financial Jehle/Reny Markets* Brock/Adams Advanced Microeconomic Theory The Structure of American Industry Roberts Johnson-Lans The Choice: A Fable of Free Trade and Bruce A Health Economics Primer Protection Public Finance and the American Economy Keat/Young Rohlf Carlton/Perloff Managerial Economics Introduction to Economic Reasoning Modern Industrial Organization Klein Ruffin/Gregory Case/Fair/Oster Mathematical Methods for Economics Principles of Economics Principles of Economics* Krugman/Obstfeld/Melitz Sargent Caves/Frankel/Jones International Economics: Theory & Policy* Rational Expectations and Inflation World Trade and Payments: An Introduction Laidler Sawyer/Sprinkle Chapman The Demand for Money International Economics Environmental Economics: Theory, Leeds/von Allmen Application, and Policy Scherer The Economics of Sports Industry Structure, Strategy, and Public Cooter/Ulen Leeds/von Allmen/Schiming Policy Law & Economics Economics* Schiller Downs Lipsey/Ragan/Storer The Economics of Poverty and An Economic Theory of Democracy Economics* Discrimination Ehrenberg/Smith Lynn Sherman Modern Labor Economics Economic Development: Theory and Practice Market Regulation Ekelund/Ressler/Tollison for a Divided World Silberberg Economics* Miller Principles of Microeconomics Farnham Economics Today* Stock/Watson Economics for Managers Understanding Modern Economics Introduction to Econometrics Folland/Goodman/Stano Miller/Benjamin Introduction to Econometrics, Brief Edition The Economics of Health and Health Care The Economics of Macro Issues Studenmund Fort Miller/Benjamin/North Using Econometrics: A Practical Guide Sports Economics The Economics of Public Issues Tietenberg/Lewis Froyen Mills/Hamilton Environmental and Natural Resource Macroeconomics Urban Economics Economics Fusfeld Mishkin Environmental Economics and Policy The Age of the Economist The Economics of Money, Banking, and Todaro/Smith Gerber Financial Markets* Economic Development International Economics* The Economics of Money, Banking, and Waldman Gordon Financial Markets, Business School Edition* Microeconomics Macroeconomics* Macroeconomics: Policy and Practice* Waldman/Jensen Greene Murray Industrial Organization: Theory and Econometric Analysis Econometrics: A Modern Introduction Practice Gregory Nafziger Weil Essentials of Economics The Economics of Developing Countries Economic Growth Gregory/Stuart O’Sullivan/Sheffrin/Perez Williamson Russian and Soviet Economic Performance Economics: Principles, Applications Macroeconomics and Structure and Tools* * denotes titles Log onto www.myeconlab.com to learn more. TENTH EDITION Principles of Macroeconomics Karl E. Case Wellesley College Ray C. Fair Yale University Sharon M. Oster Yale University Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Dedicated To Professor Richard A. Musgrave and Professor Robert M. Solow and Professor Richard Caves Editor in Chief: Donna Battista Image Manager: Rachel Youdelman AVP/Executive Editor: David Alexander Photo Researcher: Diahanne Lucas Dowridge Editorial Project Managers: Melissa Pellerano, Lindsey Full-Service Project Management/Composition: GEX Sloan Publishing Services Editorial Assistant: Megan Cadigan Typeface: 10/12 Minion AVP/Executive Marketing Manager: Lori DeShazo Text Permission Project Supervisor: Michael Joyce Marketing Assistant: Kimberly Lovato Director of Media: Susan Schoenberg Managing Editor: Nancy Fenton Content Lead, MyEconLab: Noel Lotz Senior Production Project Manager: Nancy Freihofer Senior Media Producer: Melissa Honig Senior Manufacturing Buyer: Carol Melville Supplements Production Coordinator: Alison Eusden Senior Art Director: Jonathan Boylan Printer/Binder: Courier, Kendallville Cover Design: Jonathan Boylan Cover Printer: Lehigh Phoenix Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on appropriate page within text. Copyright © 2012, 2009, 2007, 2004, 2003, Pearson Education, Inc. All rights reserved. Manufactured in the United States of America. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Rights and Contracts Department, 501 Boylston Street, Suite 900, Boston, MA 02116, fax your request to 617 671-3447, or e-mail at www.pearsoned.com/legal/permission.htm. Many of the designations by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps. Library of Congress Cataloging-in-Publication Data Case, Karl E. Principles of macroeconomics / Karl E. Case, Ray C. Fair, Sharon M. Oster.—10th ed. p. cm. Includes index. ISBN-13: 978-0-13-139140-6 1. Macroeconomics. I. Fair, Ray C. II. Oster, Sharon M. III. Title. HB172.5.C375 2012 339—dc22 2010049926 10 9 8 7 6 5 4 3 2 1 ISBN 13: 978-0-13-139140-6 ISBN 10: 0-13-139140-2 About the Authors Karl E. Case is Professor of Economics Emeritus at Wellesley College where he has taught for 34 years and served several tours of duty as Department Chair. He is a Senior Fellow at the Joint Center for Housing Studies at Harvard University and a founding partner in the real estate research firm of Fiserv Case Shiller Weiss, which produces the S&P Case-Shiller Index of home prices. He serves as a member of the Index Advisory Committee of Standard and Poor’s, and along with Ray Fair he serves on the Academic Advisory Board of the Federal Reserve Bank of Boston. Before coming to Wellesley, he served as Head Tutor in Economics (director of undergradu- ate studies) at Harvard, where he won the Allyn Young Teaching Prize. He was Associate Editor of the Journal of Economic Perspectives and the Journal of Economic Education, and he was a member of the AEA’s Committee on Economic Education. Professor Case received his B.A. from Miami University in 1968; spent three years on active duty in the Army, and received his Ph.D. in Economics from Harvard University in 1976. Professor Case’s research has been in the areas of real estate, housing, and public finance. He is author or coauthor of five books, including Principles of Economics, Economics and Tax Policy, and Property Taxation: The Need for Reform, and he has published numerous articles in profes- sional journals. For the last 25 years, his research has focused on real estate markets and prices. He has authored numerous professional articles, many of which attempt to isolate the causes and consequences of boom and bust cycles and their relationship to regional and national economic performance. Ray C. Fair is Professor of Economics at Yale University. He is a member of the Cowles Foundation at Yale and a Fellow of the Econometric Society. He received a B.A. in Economics from Fresno State College in 1964 and a Ph.D. in Economics from MIT in 1968. He taught at Princeton University from 1968 to 1974 and has been at Yale since 1974. Professor Fair’s research has primarily been in the areas of macroeconomics and econometrics, with particular emphasis on macroeconometric model building. He also has done work in the areas of finance, voting behavior, and aging in sports. His publications include Specification, Estimation, and Analysis of Macroeconometric Models (Harvard Press, 1984); Testing Macroeconometric Models (Harvard Press, 1994); and Estimating How the Macroeconomy Works (Harvard Press, 2004). Professor Fair has taught introductory and intermediate macroeconomics at Yale. He has also taught graduate courses in macroeconomic theory and macroeconometrics. Professor Fair’s U.S. and multicountry models are available for use on the Internet free of charge. The address is http://fairmodel.econ.yale.edu. Many teachers have found that having stu- dents work with the U.S. model on
Load more

Recommended publications
  • Cross-Country Trends in Affective Polarization
    Cross-Country Trends in Affective Polarization Levi Boxell, Stanford University∗ Matthew Gentzkow, Stanford University and NBER Jesse M. Shapiro, Brown University and NBER August 2021 Abstract We measure trends in affective polarization in twelve OECD countries over the past four decades. According to our baseline estimates, the US experienced the largest increase in po- larization over this period. Five countries experienced a smaller increase in polarization. Six countries experienced a decrease in polarization. We relate trends in polarization to trends in potential explanatory factors concerning the economy, technology, demography, and politics. keywords: comparative politics, mass polarization, news media, ethnic fractionalization JEL codes: D72, O57 ∗E-mail: [email protected], [email protected], jesse shapiro [email protected]. We thank James Adams, Klaus Desmet, John Duca, Ray Fair, Morris Fiorina, Greg Huber, Shanto Iyengar, Emir Kamenica, Rishi Kishore, Yphtach Lelkes, Matthew Levendusky, Neil Malhotra, Greg Martin, Eoin McGuirk, Pippa Norris, Carlo Schwarz, Sean Westwood, and seminar participants at the DC Political Economy Center Webinar, Stanford University, the Brown Data Science Initiative, the CREST Reading Group on Political Economy, and the American Economic Association for their comments and suggestions. We thank Lenka Drazanova and Philipp Rehm for sharing data, Dina Smeltz for sharing survey questionnaires, Rune Stubager for providing questionnaire translations, Will Horne for assistance with the CSES data, and Marc Swyngedouw for answering inquiries about the Belgium National Election Study. We also thank our many dedicated research assistants for their contributions to this project. We acknowledge funding from the Population Studies and Training Center, the Eastman Professorship, and the JP Morgan Chase Research Assistant Program at Brown University, the Stanford Institute for Economic Policy Research (SIEPR), the Institute for Humane Studies, the John S.
    [Show full text]
  • C Ow Les Q U Ar Ter Ly
    2017 / Volume 1 / Issue 1 Cowles Q uarterly N ew sl e t t e r PREDICTING THE NEXT PRESIDENT THE RAY FAIR FORMULA Features JOHANNES HÖRNER Faculty Profile MARK ROSENZWEIG Q & A Cow les Quarterly Volume 1, Number 1 CONTENTS A NOTE FROM THE EDITOR .................................................................................... 3 FA CULTY FOCUS JOHANNES HÖRNER .................................................................................................. 4 FROM THE A RCHIVES COWLES COMES TO YALE ....................................................................................... 5 FEA TURE PREDICTING THE NEXT PRESIDENT THE RAY FAIR MODEL .............................................................................................. 6 ECONOMICS FALL RECEPTION ............................................................................. 7 Q&A MARK ROSENZWEIG STUDYING GROWTH IN LOW-INCOME NATIONS Q& A ................................... 8 COWLES FOUNDA TION DISCUSSION PA PERS 2016 FOURTH QUARTER ........................................................................................... 10 On the cover: 30 Hillhouse Ave. Table of contents: Faculty Lounge, 30 Hillhouse Ave. 2 Cowles Quarterly A NOTE FROM THE EDITOR Welcome to our first quarterly newsletter When I was first tasked to produce a quarterly newsletter for the Cowles Foundation, I was honored. My flattery, however, soon turned to optimistic angst as I began to think of all the things that go into the publication. How will I format the pages? Will the pieces interest readers? Will I have enough content? And, of course, will I catch all those dreaded typos. Low and behold, the issue came together; I have a format, content, and pictures. For now, I can breath a sigh of relief (at least until the next issue). I would like to thank Cowles research staff members, Professor Ray Fair and Johannes Horner, who volunteered their time to answers questions for the pieces on the following pages. I would also like to thank Mike Cummings for his contributing article on Mark Rosenzweig.
    [Show full text]
  • Anthony K. Lima Resume
    Tony Lima Dept. of Economics [email protected] California State University, East Bay 510-885-3889 25800 Carlos Bee Blvd. VBT 434 Hayward, CA 94542-3068 http://www.GonzoEcon.com (economics blog) http://www.cbe.csueastbay.edu/~alima http://www.ProfLima.com (wine economics blog) http://TonyLimaAssociates.posterous.com (technology blog) EDUCATION 1973-1980 Stanford University, Stanford, CA Ph.D., Economics, March, 1980; M.A., Economics, January, 1977 Dissertation: Inflation and the Demand for Life Insurance Areas of Specialization: Macroeconomics, international economics, monetary theory, econometrics, finance 1969-1971 Harvard Business School, Cambridge, MA M.B.A., June, 1971 Areas of Specialization: Managerial economics, finance, quantitative methods 1965-1969 Massachusetts Institute of Technology, Cambridge, MA B.S., Chemical Engineering, June, 1969 EMPLOYMENT 1980 – present Professor of Economics, California State University, East Bay (formerly CSU Hayward) 1978 – present Principal, Tony Lima Associates, Los Altos, CA 1978-1979 Brandeis University, Waltham, MA Lecturer, Department of Economics 1976-1978 Stanford University, Stanford, CA Lecturer, Department of Economics 1971-1972 Data Resources, Inc., Lexington, MA Marketing Consultant, New York City office. PUBLICATIONS: ECONOMICS BOOKS “Instructor’s Manual” to accompany Alan Taylor, International Macroeconomcs (2e). Worth Publisher, New York (2011). “Instructor’s Manual” to accompany Karl Case, Ray Fair, and Sharon Oster, Principles of Microeconomics (10e). Prentice-Hall Publishing, Upper Saddle River, NJ, 2011. Also wrote the IM for the 7th, 8th and 9th editions. “Instructor’s Manual” to accompany Karl Case, Ray Fair, and Sharon Oster, Principles of Macroeconomics (10e). Prentice-Hall Publishing, Upper Saddle River, NJ, 2011. Also wrote the IM for the 7th, 8th and 9th editions.
    [Show full text]
  • Modeling a Presidential Prediction Market∗
    Modeling a Presidential Prediction Market∗ M. Keith Chen† Yale School of Management and the Cowles Foundation Jonathan E. Ingersoll, Jr. Yale School of Management Edward H. Kaplan Yale School of Management, Yale School of Medicine, Yale Faculty of Engineering May 2007 First Revision: December 2007 Second Revision: January 2008 Forthcoming: Management Science, Vol. 54, No. 8, Aug 2008, pp.1381-1394 Abstract Prediction markets now cover many important political events. The 2004 presi- dential election featured an active prediction market at Intrade.com where securities addressing many different election-related outcomes were traded. Using the 2004 data from this market, we examined three alternative models for these security prices with special focus on the electoral college rules that govern US presidential elections to see which models are more (or less) consistent with the data. The data reveal dependen- cies in the evolution of the security prices across states over time. We show that a simple diffusion model provides a good description of the overall probability distribu- tion of electoral college votes, while an even simpler ranking model provides excellent predictions of the probability of winning the presidency. Ignoring dependencies in the evolution of security prices across states leads to considerable underestimation of the variance of the number of electoral college votes received by a candidate, which in turn leads to overconfidence in predicting whether or not that candidate wins the election. Overall, the security prices in the Intrade presidential election prediction market appear jointly consistent with probability models that satisfy the rules of the electoral college. ∗We wish to acknowledge Dominic Soon for invaluable research assistance, Ray Fair for his helpful com- ments on earlier versions of this work, and the associate editor and two anonymous reviewers for suggestions that greatly improved the paper.
    [Show full text]
  • Principles of Microeconomics 10Th Edition the Pearson Series In
    TENTH EDITION Principles of Economics The Pearson Series in Economics Abel/Bernanke/Croushore Hartwick/Olewiler Parkin Macroeconomics* The Economics of Natural Resource Use Economics* Bade/Parkin Heilbroner/Milberg Perloff Foundations of Economics* The Making of the Economic Society Microeconomics* Berck/Helfand Heyne/Boettke/Prychitko Microeconomics: Theory and Applications The Economics of the Environment The Economic Way of Thinking with Calculus* Bierman/Fernandez Hoffman/Averett Perman/Common/McGilvray/Ma Game Theory with Economic Applications Women and the Economy: Family, Work, Natural Resources and Environmental Blanchard and Pay Economics Macroeconomics* Holt Phelps Blau/Ferber/Winkler Markets, Games and Strategic Behavior Health Economics The Economics of Women, Men and Work Hubbard/O’Brien Pindyck/Rubinfeld Boardman/Greenberg/Vining/ Economics* Microeconomics* Weimer Money, Banking, and the Financial System* Riddell/Shackelford/Stamos/ Cost-Benefit Analysis Hughes/Cain Schneider Boyer American Economic History Economics: A Tool for Critically Understanding Society Principles of Transportation Economics Husted/Melvin Branson International Economics Ritter/Silber/Udell Macroeconomic Theory and Policy Principles of Money, Banking & Financial Jehle/Reny Markets* Brock/Adams Advanced Microeconomic Theory The Structure of American Industry Roberts Johnson-Lans The Choice: A Fable of Free Trade and Bruce A Health Economics Primer Protection Public Finance and the American Economy Keat/Young Rohlf Carlton/Perloff Managerial Economics
    [Show full text]
  • What Do Price Equations Say About Future Inflation?
    WHAT DO PRICE EQUATIONS SAY ABOUT FUTURE INFLATION? By Ray Fair May 2021 COWLES FOUNDATION DISCUSSION PAPER NO. 2287 COWLES FOUNDATION FOR RESEARCH IN ECONOMICS YALE UNIVERSITY Box 208281 New Haven, Connecticut 06520-8281 http://cowles.yale.edu/ What Do Price Equations Say About Future Inflation? Ray C. Fair∗ May 2021 Abstract This paper uses an econometric approach to examine the inflation con- sequences of the American Rescue Plan Act of 2021. Price equations are estimated and used to forecast future inflatin. The main results are: 1) The data suggest that price equations should be specified in level form rather than in first or second difference form. 2) There is some slight evidence of nonlinear demand effects on prices. 3) There is no evidence that demand effects have gotten smaller over time. 4) The stimulus from the act combined with large wealth effects from past household saving, rising stock prices, and rising housing prices is large and is forecast to drive the unemployment rate down to below 3.5 percent by the middle of 2022. 5) Given this stimulus, the inflation rate is forecast to rise to slightly under 5 percent by the middle of 2022 and then comes down slowly. 6) There is considerable uncertainty in the point forecasts, especially two years out. The probability that inflation will be larger than 6 percent next year is estimated to be 31.6 percent. 7) If the Fed were behaving as historically estimated, it would raise the interest rate to about 3 percent by the end of 2021 and 3.5 percent by the end of 2022 according to the forecast.
    [Show full text]
  • Some Important Macro Points
    SOME IMPORTANT MACRO POINTS By Ray Fair February 2019 COWLES FOUNDATION DISCUSSION PAPER NO. 2165 COWLES FOUNDATION FOR RESEARCH IN ECONOMICS YALE UNIVERSITY Box 208281 New Haven, Connecticut 06520-8281 http://cowles.yale.edu/ Some Important Macro Points Ray C. Fair∗ February 2019 Abstract This paper lists 19 points that follow from results I have obtained using a structural macroeconomic model (SEM). Such models are more closely tied to the aggregate data than are DSGE models, and I argue that DSGE models and similar models should have properties that are consistent with these points. The aim is to try to bring macro back to its empirical roots. 1 Introduction It is perhaps an understatement to say that there is currently a wide range of views about the state of macroeconomic research, mostly centered around views about the dynamic stochastic general equilibrium (DSGE) methodology and models. Some view DSGE models as the only game in town. For example, Christiano, Eichen- baum, and Trabandt (2018, p. 136) state: “But we do know that DSGE models will remain central to how macroeconomists think about aggregate phenomena and policy. There is simply no credible alternative to policy analysis in a world of competing economic forces operating on different parts of the economy.” Kehoe, Midrigan, and Pastorino (2018, p. 164) state: “[Macroeconomists] agree that a disciplined debate rests on communication in the language of dynamic general equilibrium theory.” Chari (2010, p. 32) states: “If you have an interesting and ∗Cowles Foundation, Department of Economics, Yale University, New Haven, CT 06520-8281. e-mail: [email protected]; website: fairmodel.econ.yale.edu.
    [Show full text]