Wholly Macro!: Macroeconomics Fundamentals: How and why the levels of employment, output, prices and interest rates change

David Ashby

Wholly Macro!: Macroeconomics Fundamentals: How and why the levels of employment, output, prices and interest rates change
Format
Paperback
Publisher
Independently Published
Published
4 June 2019
Pages
288
ISBN
9781072099734

Wholly Macro!: Macroeconomics Fundamentals: How and why the levels of employment, output, prices and interest rates change

David Ashby

This introductory-level book provides a unique approach to modern macroeconomic analysis. The focus is upon the disequilibrium interplay among three key aggregative concepts: the gross domestic product (GDP), aggregate planned expenditures (APE), and the aggregate supply of funding (ASF). The disequilibrium interplay operates automatically (without awareness, intent, or oversight) to move the levels of employment, output, interest rates, and prices in sometimes unpopular ways that eventually equate GDP, APE, and ASF following any of the six possible shocks that can knock them out of balance.This macroeconomic coordination process (the MCP) is stable and loops repeatedly through funding adjustments that determine the level of interest rates and output-price adjustments that determine the levels of employment, output, and prices. Each of the six possible shocks results in its own distinct sequence of changes in employment, output, interest rates, and prices, thereby facilitating inference of what was the initiating shock. Arrival at a new equilibrium (GDP = APE = ASF) and shutdown of the MCP may be hastened or delayed by intervening shocks.The funding adjustments are driven by the relative magnitudes of the combined actions taken by members of two groups of money users interacting individually with money suppliers. The output-price adjustments are driven by the relative magnitudes of the combined actions taken by members of two groups of output suppliers interacting individually with customers. The group members are reacting to their own individual situations and typically have no awareness of the macro-level situation or of the roles that they are playing in the operation of the MCP. Opportunities for outcome variations abound, and these are problematic for monetary and fiscal policy efforts administered at the macro level.

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