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Measuring Macroeconomic Variables and Reading Macroeconomic Forecasts

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Teaching Topics in Fiscal, Monetary and Tax Policy 

Measuring Macroeconomic Variables and Reading Macroeconomic Forecasts

This topic will introduce students with fundamental macroeconomic concepts by familiarizing them with measuring sticks for macroeconomic activity such as the price level, gross domestic product, employment, unemployment, and interest rates. It is also designed to provide students of public policy/administration with the analytical tools neccessary to understand and analyze macroeconomic forecasts. 

Topic Learning Outcome: Upon mastering this topic, students will be able to identify and define major indicators of macroeconomic performance. Further, students will be able to analyze and interpret macroeconomic forecasts.

Core Concepts associated with this Topic: Fixed Exchange Rate; Floating Exchange Rate; Net Exports; Open Economy; Trade Deficit; Trade Surplus; Net Capital Outflow (NCO); Tariff; Capital Spending; Expenditure Estimate of GDP; Gross Domestic Product (GDP); Gross National Product; Income Estimate of Gross Domestic Product; Macroeconomics; Tax Expenditure; Self-Financing; Econometrics.

Recommended Readings:

University of Toronto: PPG-1003 (Macroeconomics for Policy Analysis)

Mankiw, N. Gregory, Ronald Kneebone, and Kenneth McKenzie. 2014. Principles of Macroeconomics, Sixth Canadian Edition.  South-Western Cengage Learning. Chapter 5 (Measuring a Nation's Income) - Chapter 6 (Measuring the Cost of Living)

Supplementary Required Readings
• "Boundary Problems"
• "New GDP Measures for Europe"
• "Does Money Matter – Summary"
• "British National Well-Being"
• "Core Principles (CPI Reporting)"
• "Cuts to Stats Can" Stabile & Bednar
• "Review of Karabell’s Leading Indicators”

New York University: PADM-GP 2138 (Macroeconomics, Global Markets, and Policy)

International Monetary Fund (2013) World Economic Outlook, October.

Blanchard O., Leigh D. (2013) “Growth Forecast Errors and Fiscal Multipliers,” IMF Working Paper 13/1, January.

International Monetary Fund (2013) “The Dog That Didn’t Bark,” World Economic Outlook - April, Chapter 3.

University of Michigan: PubPol 556 (Macroeconomics)

Mankiw, N. Gregory. 2013. Macroeconomics, Eighth Edition, New York: Worth Publishers. Chapter 1 (Science of Macroeconomics), Chapter 2 (The Data of Macroeconomics), Chapter 3 (National Income: Where it comes from and Where it Goes).

Rutgers University (New Brunswick, NJ): 34:833:610 (Macroeconomics for Public Policy)

William J. Baumol and Alan S. Blinder, Macroeconomics Principles and Policy, 12th Edition, Thomson, Southwestern, 2012. Chapter 5 (An Introduction to Macroeconomics), Chapter 6 (The Goals of Macroeconomic Policy) & Chapter 7 (Economic Growth: Theory and Policy)

Sample Assessment Questions:

1.) What is gross domestic product? Why is this an important measure of macroeconomic performance? What is the difference between the income-based and expenditure-based estimate of a jurisdiction's GDP?

2.) What is meant when we refer to a country's trade balance? How does the concept of a trade deficit differ from the concept of a budget deficit?

Page created by Sean Goertzen and Ben Eisen on 20 May 2015, last updated by James Ban 19 August 2015.


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© University of Toronto 2008
School of Public Policy and Governance