Published on September 1, 2020

Microeconomics


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What is Macroeconomics

Macroeconomics is the study of large size interwoven economies, such as nation-states, regions, trade blocs up to world economics. The focus hereby is not to focus on individual entities of an economy, but to statistically view those as a wholistic system. Macroeconomy of a country measured by the country’s Gross Domestic Production or GDP It generally focuses on the following factors –

  • Business cycle,
  • Economic growth
  • Interest rates,
  • Inflation,
  • Major economic aggregates like the government, household, and business sectors.

Importance of Macroeconomics

Macroeconomic analysis is mostly used to predict future events such as:

  1. Forecasting changes in national economic products
  2. Trade patterns
  3. Employment indicators
  4. National budget surplus or deficits
  5. National borrowing requirements
  6. Currency values
  7. Purchasing Power Parity
  8. Investment statistics
  9. Consumption levels
  10. Production efficiency of a nation-state or region

Production efficiency of a nation-state or region Macroeconomics is thus heavily Big Data centred and can be modelled using computing and Artificial Intelligence methods, such as Deep Learning or reinforced learning to also incorporate outliers in the data.

Main Problems of Macroeconomics

  1. Inflation: Inflation occurs when there is a rapid rise in the price of goods and services in a country.
  2. Unemployment: Unemployment is a major issue with macroeconomy when people are capable to work but cannot find jobs.
  3. Business cycle: Downward phase of the business cycle occurs, i.e, called recession.
  4. Macroeconomic Policy: Macroeconomics policies such as fiscal and monetary policies do more harm to the nation’s economy than good.

Bibliographical Sources:

  • PRINCIPLES OF MACROECONOMICS, SECOND EDITION, COPYRIGHT © 2018 DIRK MATEER & LEE COPPOCK, NORTON & COMPANY, INC.
  • THE ECONOMICS OF MONEY, BANKING, AND FINANCIAL MARKETS, ELEVENTH EDITION, COPYRIGHT © 2016 FREDERIC S. MISHKIN, PEARSON
  • MACROECONOMICS, GLOBAL EDITION, 7TH EDITION, BY OLIVIER BLANCHARD, COPYRIGHT 2017, ISBN 9781292160504
  • MACROECONOMICS, 9TH EDITION, ISBN 978-0-13-416739-8, BY ANDREW B. ABEL, BEN S. BERNANKE, AND DEAN CROUSHORE, PUBLISHED BY PEARSON EDUCATION © 2017.

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