2025 Macroeconomic Policy: How Graphs Will Predict the Future of the Economy!

Welcome to the world of macroeconomic policy! In this introductory lecture, let’s delve into some essential graphs that lay the foundation for understanding the macroeconomic landscape. With content exclusively accessible to our students, we embark on a journey to explore key economic indicators and policy implications.

1. Where we are: GDP – Dive into the heart of the economy with a close look at Gross Domestic Product (GDP), a vital measure of a country’s economic health.
2. Where we are: Inflation – Delve into the intricate world of inflation and its impact on the economy, shedding light on the significance of price stability.
3. Where we are: Implications of the static Taylor rule – Unravel the implications and applications of the static Taylor rule in shaping monetary policy decisions.
4. Unconventional monetary policy: Credit easing, credit tightening – Explore the unconventional strategies of credit easing and credit tightening and their role in influencing economic conditions.
5. Unconventional monetary policy: Forward guidance – Delve deep into the world of forward guidance, a strategic tool used by central banks to communicate policy intentions.
6. The (bivariate) Phillips curve – Unpack the complexities of the Phillips curve, shedding light on the relationship between inflation and unemployment.
7. The dollar and the trade balance – Explore the dynamics between the dollar and trade balance, highlighting the interplay of currency value and international trade.
8. Trade war implications – Analyze the potential impact of trade wars, from 10% tariffs to escalating tensions with countries like China, on GDP and inflation.
9. Federal debt and real interest rates – Gain insight into the intricate relationship between federal debt levels and real interest rates, essential factors influencing economic stability.

As we embark on this academic journey, it is essential to acknowledge the wealth of knowledge encapsulated in our textbook, Blanchard’s Macroeconomics 9th edition. For those curious about the methodology underpinning our course, look no further than Olivier Blanchard’s distinguished career.

A celebrated economist, Olivier Blanchard is the Robert M. Solow Professor of Economics emeritus at MIT and the C. Fred Bergsten Senior Fellow at the Peterson Institute for International Economics. With a rich background in academia, policy advising, and international collaboration, Blanchard’s expertise spans a wide array of macroeconomic issues. From monetary and fiscal policy to navigating economic crises, his contributions have left an indelible mark on the field.

Now armed with Blanchard’s insights and our analytical toolkit, let’s embark on a journey to unravel the complexities of macroeconomic policy and its far-reaching implications. Embrace the challenges, engage with the material, and let curiosity be your compass as we navigate the fascinating world of macroeconomics.