A branch of economics that studies the global aspects of the economy, such as cycles, growth, inflation, or employment. That is, it studies the economy as a whole and analyzes different aggregates. The variables it takes into account include the level of national income, consumption, savings, investment, inflation, and exchange rates. It contrasts with microeconomics, which studies the behavior of consumers and firms, focusing on supply, demand, prices, and costs. Keynes’s General Theory of Employment, Interest, and Money, written in 1936, is considered the starting point for this branch. Keynes argued that market adjustment, which microeconomics studies, did not occur on a large scale, which meant that markets did not function, and macroeconomic policy was necessary to solve the problem of unemployment through measures that stimulated global demand.
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