Applications In Touch with Data and Research
The Federal Reserve’s Preferred Inflation Measures 49 Developing and Testing an Economic Theory 13
The Production Function of the U.S. Economy and U.S. The National Income and Product Accounts 24
Productivity Growth 62 Natural Resources, the Environment, and the National
Output, Employment, and the Real Wage During Income Accounts 29
Oil Price Shocks 85 The Computer Revolution and
Unemployment Duration and the 2007-2009 Chain-Weighted GDP 45
Recession 91 Does CPI Inflation Overstate Increases
Consumer Sentiment and Forecasts of Consumer in the Cost of Living? 47
Spending 110 Labor Market Data 88
How Consumers Respond to Tax Rebates 120 Interest Rates 116
Measuring the Effects of Taxes on Investment 129 Investment and the Stock Market 133
Macroeconomic Consequences of the Boom and Bust The Balance of Payments Accounts 171
in Stock Prices 140 Money in a Prisoner-of-War Camp 243
The United States as International Debtor 177 The Monetary Aggregates 246
The Impact of Globalization on the U.S. Economy 189 Where Have All the Dollars Gone? 247
Recent Trends in the U.S. Current Account Deficit 191 The Housing Crisis That Began in 2007 254
The Twin Deficits 196 Coincident and Leading Indexes 302
The Post–1973 Slowdown in Productivity Growth 213 The Seasonal Cycle and the Business Cycle 307
The Recent Surge in U.S. Productivity Growth 215 Econometric Models and Macroeconomic Forecasts
The Growth of China 231 for Monetary Policy Analysis 335
Money Growth and Inflation in European Countries Are Price Forecasts Rational? 396
in Transition 269 Henry Ford’s Efficiency Wage 415
Measuring Inflation Expectations 272 DSGE Models and the Classical–Keynesian Debate 435
The Job Finding Rate and the Job Loss Rate 295 The Lucas Critique 461
Oil Price Shocks Revisited 334 Indexed Contracts 469
Calibrating the Business Cycle 371 The Sacrifice Ratio 473
The Value of the Dollar and U.S. Net Exports 491 Exchange Rates 483
European Monetary Unification 517 McParity 487
Crisis in Argentina 519 Measuring the Impact of Government Purchases
The Money Multiplier During Severe Financial on the Economy 604
Crises 542
The Financial Crisis of 2008 564
Inflation Targeting 574
Labor Supply and Tax Reform in the 1980s 593
Social Security: How Can It Be Fixed? 597
, Symbols Used in This Book
A productivity V velocity
B government debt W nominal wage
BASE monetary base Y total income or output
C consumption Y full-employment output
CA current account balance
CU currency held by nonbank
public
a individual wealth or assets
DEP bank deposits
c individual consumption;
E worker effort consumption per worker
G government purchases cu currency–deposit ratio
I investment d depreciation rate
INT net interest payments e real exchange rate
K capital stock enom nominal exchange rate
KFA capital and financial account enom official value of nominal
balance exchange rate
M money supply i nominal interest rate
MC marginal cost i m
nominal interest rate on money
MPK marginal product of capital k capital–labor ratio
MPN marginal product of labor n growth rate of labor force
MRPN marginal revenue product of labor pK price of capital goods
N employment, labor r expected real interest rate
N full-employment level of r w
world real interest rate
employment
ra-t expected after-tax real interest rate
NFP net factor payments
res reserve–deposit ratio
NM nonmonetary assets
s individual saving; saving rate
NX net exports
t income tax rate
P price level
u unemployment rate
e
P expected price level
u natural unemployment rate
Psr short-run price level
uc user cost of capital
R real seignorage revenue
w real wage
RES bank reserves
y individual labor income; output
S national saving per worker
Spvt private saving p inflation rate
Sgovt government saving p e
expected inflation rate
T taxes hY income elasticity of money demand
TR transfers t tax rate on firm revenues
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, Macroeconomics
Eighth Edition
Andrew B. Abel
The Wharton School of the
University of Pennsylvania
Ben S. Bernanke
Dean Croushore
Robins School of Business
University of Richmond
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