MACROECONOMIC THEORY - Tapa dura

In this new text, designed for first year graduate students, Jean-Pascal Benassy conducts a review of every important development in macroeconomic theory since the 1950s. Each topic is viewed through explicit models, designed to reveal its central issues as simply and directly as possible, but without giving up either rigor or substance. There are 590 references, from Abel to Zabel. An encyclopedic achievement! (Robert E. Lucas, Jr., University of Chicago and 1995 Nobel Laureate in Economics)

This graduate textbook is a "primer" in macroeconomics. It starts with essential undergraduate macroeconomics and develops in a simple and rigorous manner the central topics of modern macroeconomic theory including rational expectations, growth, business cycles, money, unemployment, government policy, and the macroeconomics of nonclearing markets. The emphasis throughout the book is on both foundations and presenting the simplest model for each topic that will deliver the relevant answers.

The first two chapters recall the main workhorses of undergraduate macroeconomics: the Solow-Swan growth model, the Keynesian IS-LM model, and the Phillips curve. The next chapters present four fundamental "building blocks" of modern macroeconomics: rational expectations, intertemporal dynamic models, nonclearing markets and imperfect competition, and uncertainty. Later the book deals with growth, notably the Ramsey model, overlapping generations, and endogenous growth. Chapter 10 moves to the famous "real business cycles" (RBC), which integrate in a unified framework growth and fluctuations. The final chapters look at the issue of stabilization, how best to guard the economy from shocks, and the connections between politics and the macroeconomy. To make the book self contained, a mathematical appendix gives a number of simple technical results that are sufficient to follow the formal developments of the book.