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Macroeconomics: an Introduction

macroeconomics : an IntroductionJes us Fern andez-VillaverdeUniversity of Pennsylvania1 The Scope of macroeconomics Microeconomics: Object of interest is a single (or small number of)household orfirm. macroeconomics : Object of interest is the entire economy. We caremostly about:1. between Macro and Micro Micro and Macro are consistent applications of standard neoclassicaltheory. Unifying theme, EQUILIBRIUM APPROACH:1. Agents optimize given preferences and Agents actions are compatible with each other. This requires:1. Explicit about Models as are the Requirements of Theory?

The Scope of Macroeconomics • Microeconomics: Object of interest is a single (or small number of) household or firm. • Macroeconomics: Object of interest is the entire economy. We care mostly about: 1. Growth. 2. Fluctuations. 2

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