Intermediate Macroeconomics

Notes & simulations

The course follows the classical, long-run (flexible-price) model: how output and incomes are determined, how saving funds investment, what money and inflation are, and how it all works in an economy open to trade and capital flows.

Foundations

• How a Macro Model Works — exogenous vs endogenous variables; supply, demand, and equilibrium
• Measuring the Economy — GDP, real vs nominal, the GDP deflator, CPI, and unemployment

The Real Economy

• Production & Factor Prices — Cobb–Douglas, marginal products, and how income splits between labor and capital
• Income Distribution & Inequality — human capital, the skill premium, and the labor share
• Loanable Funds & Crowding Out — saving, investment, the real interest rate, and government deficits

Money

• What Is Money? — functions and types of money, monetary aggregates, and the central bank

Inflation

• Quantity Theory & Inflation — MV = PY, velocity, and money growth as the source of inflation
• The Fisher Effect & the Money Market — nominal vs real interest rates and money-market equilibrium
• The Costs of Inflation — shoeleather, menu costs, redistribution, and hyperinflation

The Open Economy

• Small Open Economy & the Exchange Rate — net exports, net capital outflow, and the real exchange rate
• Large Open Economy & PPP — the world interest rate and purchasing-power parity