The new edition of the worlds most popular macroeconomic textbook
I N T E R N A T I O N A L
E D I T I O N
macroeconomics N. Gregory Mankiw 'An excellent book that I will use in my 2nd year Principles course later in the year...A wonderful achievement.' Dr A. Piggins, Queens University of Belfast
'A clear, user-friendly presentation of modern macroeconomic analysis...the international coverage makes it suitable for a European, as well as a US audience.' Dr Martin Tait, University of Newcastle
'Excellent clear exposition. Good coverage of range of material. The market leader. Excellent aids for lecturers.' Dr. S W Proce, Department of Economics, University of Leicester
macroeconomics fifth edition
N. Gregory Mankiw Published June 2002 608 Pages 260mm x 210mm Hardback £34.99 0-716-75479-7
new in the fifth edition
about the author
New Organization. The chapters on economic growth are now separated in their own part, both to highlight the importance of this topic and to prevent this material from complicating the development of the classical model. The new organization first presents the classical theory of income, prices, trade and unemployment. The classical model is the starting point for the growth theory and business cycle theory that follow.
N. Gregory Mankiw is Professor of Economics at Harvard University. After earning a Ph.D. in economics from MIT, he began teaching at Harvard in 1985 and was promoted to full professor in 1987. Today, he regularly teaches both undergraduate and graduate courses in macroeconomics.
Updated Coverage. The new edition incorporates coverage of a number of recent events, including: ■ The introduction of the Euro ■ The continuing recession in Japan ■ The collapse of the dot.coms ■ The economic impact of the World Trade Centre disaster ■ The end of the longest “boom” ■ The 2001 Bush tax cut ■ The temporary U.S. budget surplus New and Revised Case Studies, including: ■ The Secrets to Happiness [showing how people’s reported life satisfaction is tied to inflation and unemployment] ■ Information Technology and the New Economy ■ Cutting Taxes to Stimulate the Economy ■ The Remarkable Stability of the 1990s ■ The Fiscal Future: Good News and Bad News ■ Case Study on Credit Crunches New and Revised FYI Boxes, including: ■ International Flows of Goods and Capital: An Example ■ The Liquidity Trap ■ How Precise Are Estimates of the Natural Rate of Unemployment? New Internet-based problems, within the end-of-chapter problem sets which require students to do online research
Professor Mankiw is a prolific writer and a regular participant in academic and policy debates. His research ranges across many fields within economics and includes work on price adjustment, consumer behaviour, financial markets, monetary and fiscal policy, and economic growth. In addition to his duties at Harvard, he is a research associate of the National Bureau of Economic Research, a member of the Brookings Panel on Economic Activity, and an adviser to the Federal Reserve Bank of Boston and the Congressional Budget Office.
contents Part 1 Introduction: The Science of Macroeconomics - The Data of Macroeconomics Part 2 Classical Theory: The Economy in the Long Run: National Income: Where It Comes From and Where It Goes - Money and Inflation The Open Economy - Unemployment Part 3 Growth Theory: The Economy in the Very Long Run: Economic Growth I - Economic Growth II Part 4 Business Cycle Theory: The Economy in the Short Run: Introduction to Economic Fluctuations - Aggregate Demand I - Aggregate Demand II - Aggregate Demand in the Open Economy Aggregate Supply Part 5 Macroeconomic Policy Debates: Stabilization Policy Government Debt and Budget Deficits Part 6 More on the Microeconomics Behind Macroeconomics: Consumption - Investment - Money Supply and Money Demand Advances in Business Cycle Theory Epilogue: What We Know, What We Don't Glossary
Comments on the Fourth Edition ‘Excellent. Great textbook. Concise, direct. Concepts exposed in coherent and easy understanding sequence, a work from someone who knows how the undergraduate thinks. Good examples help comprehension of theory and links it to real world.' Amazon Customer Comment '...still my favourite text.' Professor Landmann, Albert-Ludwig University, Freiberg
Reserve your free lecturers’ inspection copies today* *See order form for details
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the mankiw approach 1 ■
Case Studies Economics comes to life when applied to actual events. The numerous case studies in this book [many new or revised] occur frequently so students don’t have to grapple with an overdose of theory before seeing the theory applied.
FYI Boxes [many new or revised for this edition] clarify difficult concepts, provide additional information about the tools of economics, and show how economics relates to our daily lives.
Graphs Understanding graphical analysis is a key to learning macroeconomics. The graphs in the Fifth Edition are easy to follow and often include comment boxes on important points. Mathematical Notes make an argument more rigorous or present a proof of a mathematical result. They give instructors flexibility by moving the more difficult mathematical coverage out of the main body of the text. Chapter Summaries, brief and gives students an opportunity to see material in perspective and prepare for exams. Key Concepts are highlighted in boldface when introduced and listed for review at the end of the chapter.
Questions for Review let students test their understanding of the chapter’s basic lessons.
Problems and Applications Some of these problems are numerical applications of the theory. Others encourage the student to go beyond this material in the chapter by addressing new issues that are closely related to the chapter topics. Specific new problems require students to do online research.
Chapter Appendixes Several chapters include appendixes that offer additional material, sometimes at a higher level of mathematical sophistication. These are designed so that professors can cover certain topics in greater depth if they wish. The appendixes can be skipped altogether without loss of continuity. Glossary of more that 250 terms helps students become familiar with the language of macroeconomics.
supplements FOR STUDENTS Student Guide and Workbook, Roger Kaufman, Smith College, £19.99 0-7167-5397-9 This guide offers various ways for students to learn the material in the new edition and assess their understanding: ■ Fill-In Questions give students the opportunity to review and check their knowledge of the key terms and concepts in the chapter. ■ Multiple-Choice Questions allow students to test themselves on the chapter material. ■ Exercises guide students step by step through the various models using graphs and numerical examples. ■ Problems ask students to apply the models on their own. ■ Questions to Think About require critical thinking as well as economic analysis. ■ Data Questions ask students to obtain and learn about readily available economic data.
FOR INSTRUCTORS Instructor’s Resource Manual, Robert G. Murphy, Boston College, 0-7167-5398-7 For each chapter of this book, the revised manual contains notes to the instructor, a detailed lecture outline, additional case studies, and coverage of advanced topics. Instructors can use the manual to prepare their lectures, and they can reproduce whatever pages they choose as handouts for students. Solutions Manual, John Fernald, Federal Reserve Board, 0-7167-5399-5 The manual also contains answers for all of the “Questions for Review” and “Problems and Applications” in text, all of the MacroBytes exercises, and selected questions from the Student Guide and Workbook.
at www.palgrave.com/economics/mankiw featuring:
MacroBytes, David Weil, Brown University and Murat Iyigun, University of Colorado David Weill and Murat Iyigun have updated this innovative software package for students, which is now available over the internet. MacroBytes provides a range of activities to aid and motivate the student throughout the course. Self-Tests. Students can test their knowledge of the material in the book by taking multiple-choice tests on any chapter or combination of chapters. After the student responds, the program explains the answer and directs the student to specific sections in the book for additional study. Data Plotter. Students can explore macroeconomic data with time-series graphs and scatterplots.
Macro Models. These modules provide simulations of the models presented in the book. Students can change the exogenous variables and see the outcomes in terms of shifting curves and recalculated numerical values of the endogenous variables. Each module contains exercises that instructors can assign as homework. 2009: A Game for Macroeconomists. The game allows students to become President of the United States in the year 2009 and to make macroeconomic policy decisions based on news events, economic statistics, and approval ratings. It gives students a sense of the complex interconnections that influence the economy. It is also fun to play. Student PowerPoint® Tutorials, Mannig Simidian, Harvard University A dynamic new learning tool, Mannig Simidian’s original animated PowerPoint tutorials help students learn basic concepts and models in a practical, yet lively way.
PRESENTATION PowerPoint® Slides, Ron Cronovich, University of Nevada at Las Vegas These completely new PowerPoint presentations for each chapter feature graphs with effective animation, careful explanations of the core material, additional case studies and data, helpful notes to the instructor, and innovative pedagogical features. Designed to be customized or used as is, they include easy instructions for professors who have little to no experience with PowerPoint.
ASSESSMENT Test Bank, Nancy Jianakoplos, Colorado State University, 0-7167-5400-2 The test bank now includes over 1000 multiple-choice questions, including several short numerical problems are also provided for each chapter. Test Bank CD-ROM [Windows and Mac versions on one disc], 0-7167-5402-9 The easy-to-use CD version includes Windows and Mac versions on a single disc, in a format that lets you to add, edit, and resequence questions. The CD is also the access point for Diploma Online Testing. Diploma Online Testing, from the Brownstone Research Group With Diploma, instructors can easily create and administer secure exams over a network and over the Internet, with questions that incorporate multimedia and interactive exercises. The program lets you restrict tests to specific computers or time blocks, and includes an impressive suite of gradebook and result-analysis features. Online Quizzing, powered by Questionmark Now instructors can easily and securely quiz students online using prewritten, multiple-choice questions for each text chapter [not from the test bank]. Students receive instant feedback and can take the quizzes multiple times. Instructors can go into a protected web site to view results by quiz, student, or question, or can get weekly results via email.
the acclaimed mankiw pedigree To provide an accurate portrait of the state of contemporary macroeconomics, each new edition of Mankiw’s textbook incorporates the most recent developments in theory and applications – while adhering to the objectives that have defined the book since the first edition by:
■ Balancing coverage of short-run and long-run issues, to give students a richer introduction to public policy ■ Integrating Keynesian and classical ideas to familiarize students with the importance of each approach ■ Using a variety of simple models to clarify complex concepts, because no one model can shed light on all facets of the field
N. Gregory Mankiw
■ Incorporating real-world data and events to show students the relevance of the material
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To provide an accurate portrait of the state of contemporary macroeconomics, each new edition of Mankiw’s textbook incorporates the most recent developments in theory and applications – while adhering to the objectives that have defined the book since the first edition by: ■ Balancing coverage of short-run and long-run issues, to give students a richer introduction to public policy ■ Integrating Keynesian and classical ideas to familiarize students with the importance of each approach ■ Using a variety of simple models to clarify complex concepts, because no one model can shed light on all facets of the field ■ Incorporating real-world data and events to show students the relevance of the material
the acclaimed mankiw pedigree
macroeconomics fifth edition
N. Gregory Mankiw