|Macroeconomics is primarily concerned with the behavior
of just three variables -- national income, unemployment,
and inflation. In this section, we review how these variables are
measured, and how they have behaved in the United States over the last
fifty years or so. Our aim in so doing is to highlight some features of
the data that are of particular importance in the model building that we
intend to carry out.
|For each of these variables, we will address the following
|1. What would we like these variables to measure?
|2. How, in fact, are they measured?
|3. How have they performed historically.
|4. Why do we care about these data?
|Note: In addition, macroeconomics spends a considerable
amount of time dealing with what might be called secondary variables: data
that are frequently studied by macroeconomists but which, for various reasons,
play something of a lesser or more specialized role. These include the
market index, interest rates, exchange rates, the government deficit, the
money supply, and the balance of trade. In order not to overload
you with too many facts and too little context at this stage, we will study
how these additional variables have performed at appropriate moments in
Download the transparencies for this section here.
|A guide to data sources can be found here.
|Review questions can be found here.