ECON 402 Lecture Notes - Lecture 1: Real Business-Cycle Theory, Price Ceiling, Aggregate Demand
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It includes topics and concepts such as inflation, unemployment, and economic growth. Macroeconomics also talks about individual entities such as household and firms. It exams how they interact with each other as a whole and how their choices can be affected. All variables in macroeconomics are endogenous (i. e. everything is flexible) Some variables in microeconomics can be taken as parameters (i. e. they are fixed) We study the essentials with the simplest model possible. Simplicity is the final achievement -- f. chopin. Analyze data: statistical method such as linear regression (not this course"s concern) Macro-level variable: gdp, inflation, unemployment, investment, consumption, exports, imports, the corresponding growth rate. The variables that can be measured are not precise enough. It is impossible to describe the exact reality with every variable. Business cycles occurs in a high frequency while economic growth does not. Business cycles describe short fluctuation in gdp and employment. We want a positive economic growth in a long run.
