Economics. Introduction. But the honest truth is that what drives me as an economist is that economics is fun. Paul Krugman Princeton, USA. Expectations. What can you expect from me ? Decent quality of material & my lectures Subject-orientated support & assistance Fair treatment
F. Girod – PLA 12 (2012)
But the honest truth is that what drives me as an economist is that economics is fun.
What I expectfromyou:
What I ve learned today
I didn’t learn today
Please note down the last 2 minutes what you got or what the muddiest point was
At the end of this course you should be able
…to apply the principles from economics on most problems / situations you will phase in your work life e.g. judging the effect of a price policy on your business
to critically analyse (&judge personally for yourself) discussions about economic topics in business and politics
What we will be talking about
Objectives of this course
Why learn macroeconomics?
F. Girod – PLA 12 (2010)
…and the end of the semester…
…you will know about…
…basic theories, principles & tools of economics as well as institutions…
…to understand and manage external
developments in your future career…
Feel free to use any appropriate books! Ask me whether a book is suitable or not
Basic readings & supporting your learning
Mankiw, N. G. (2010), Macroeconomics, 7thEdition
Krugman, P., Wells, R., Graddy, K. (2009), Economics, 2nd Edition
Use full links and sources:
What is macro- or/and microeconomics?
What is money and why is it important to define?
What is GDP and how do we measure it?
The meaning of inflation & deflation and why price stability is preferred
What is special about the macroeconomics of an open economy, an economy that trades goods, services and assets with other countries
referring to the idea of "principles of economic life". Mankiw's list of 10 principles (below) is a good example of this notion. These are principles of how the economy works (or should work), hence, they refer to the economy or economic actors.
Principles of Economics:
referring to the basic methods &concepts economists use when doing economics, hence to economic analysis. In this view the term "economics" refers to the discipline, not to the economy. This type of principles is often interwoven with the first type in the textbooks. Lists of principles of doing economics are harder to find.
How People Make Decisions
To get one thing, you have to give up something else. Making decisions requires trading off one goal against another.
Decision-makers have to consider both the obvious and implicit costs of their actions.
A rational decision-maker takes action if and only if the marginal benefit of the action exceeds the marginal cost.
Behavior changes when costs or benefits change.
How the Economy Works as A Whole
Trade allows each person to specialize in the activities he or she does best. By trading with others, people can buy a greater variety of goods or services.
When a market fails to allocate resources efficiently, the government can change the outcome through public policy. Examples are regulations against monopolies and pollution.
How People Interact
Countries whose workers produce a large quantity of goods and services per unit of time enjoy a high standard of living. Similarly, as a nation's productivity grows, so does its average income.
Reducing inflation often causes a temporary rise in unemployment. This tradeoff is crucial for understanding the short-run effects of changes in taxes, government spending and monetary policy.