Curriculum Econ 101, Part 4: Macroeconomics Basics
Econ 101, Part 4: Macroeconomics Basics
Zooming out to the whole economy - how we measure its size and health, and why growth, jobs, and prices move together the way they do.
- What GDP Measures (and What It Misses) Gross domestic product is the standard yardstick for an economy's size - a genuinely useful number that still leaves out a great deal about well-being. 📄 Read-aloud
- Nominal vs. Real GDP Comparing GDP across years is misleading unless you strip out the effect of rising prices - which is exactly what separates nominal GDP from real GDP. 📄 Read-aloud
- Unemployment: How It's Measured and What the Types Mean The unemployment rate is more precisely defined than it sounds, and economists distinguish several distinct types of unemployment with very different causes. 📄 Read-aloud
- Inflation: Why Prices Rise and How We Measure It Inflation is a sustained rise in the general price level across the economy, and it can come from a few genuinely different underlying causes. 📄 Read-aloud
- The Business Cycle: Booms, Recessions, and Recoveries Economic activity doesn't grow smoothly - it moves through recurring phases of expansion and contraction known as the business cycle. 📄 Read-aloud
- Aggregate Supply and Aggregate Demand The whole-economy version of supply and demand explains how output, prices, and the business cycle all move together. 📄 Read-aloud
- The Consumer Price Index Explained The Consumer Price Index is the most widely cited way of tracking inflation - a running measure of how much a fixed basket of everyday goods costs over time. 📄 Read-aloud
- Stagflation: When Growth Stalls and Prices Rise Together Stagflation combines stagnant growth and high unemployment with high inflation at the same time - a combination that breaks the usual policy playbook. 📄 Read-aloud
- Economic Indicators: Leading, Lagging, and Coincident Economists track dozens of statistics to gauge the economy's health - and sorting them by timing, into leading, lagging, and coincident indicators, is key to reading them correctly. 📄 Read-aloud
- GDP Per Capita and Standards of Living Dividing GDP by population gives a better sense of average prosperity than total GDP alone - though it still leaves out how evenly that prosperity is shared. 📄 Read-aloud
- The Multiplier Effect An initial burst of spending can raise total income by more than its own size, because each person's spending becomes someone else's income. 📄 Read-aloud
- The Labor Force Participation Rate The participation rate measures what share of working-age people are working or looking for work, filling in what the unemployment rate leaves out. 📄 Read-aloud
- Potential Output and the Output Gap Potential output is what an economy can sustainably produce; the output gap measures how far actual output is running above or below it. 📄 Read-aloud
- Okun's Law: Output and Unemployment The relationship between economic growth and unemployment first observed by Arthur Okun, and why it is a rule of thumb rather than a law. 📄 Read-aloud
- The Phillips Curve: Inflation and Unemployment The famous trade-off between inflation and unemployment, how it broke down in the 1970s, and how economists think about it today. 📄 Read-aloud
- The Parts of GDP: Consumption, Investment, Government and Trade How GDP is broken into spending by households, businesses, government and foreigners, and what each part tells us about the economy. 📄 Read-aloud
- GDP Deflator vs CPI: Two Ways to Measure Inflation How the GDP deflator and the consumer price index measure price changes differently, and why they sometimes tell different stories. 📄 Read-aloud