INSEAD Library

Digitized

Common Confusions in Macroeconomics Table of Contents PREFACE .............................................................................. y 1. THE COUNTRY AND THE WORLD................................... 1 2. SMALL GOVERNMENT AND BIG GOVERNMENT, BALANCED BUDGETS AND DEFICITS.........................5 3. INCREASE IN DESIRE TO SAVE...................................... 9 4. "SURPLUS OF SAVINGS"............................................... 11 5. THE INTEREST RATE, MONEY AND SAVINGS.............15 6. HOUSEHOLD SAVINGS AND BUSINESS SAVINGS..... 17 7. EFFECTS OF LIQUIDITY ON CONSUMPTION AND INVESTMENT............................................................... 19 8. PETROLEUM PRICE INCREASES, WORLD INCOME REDISTRIBUTION AND WORLD SAVINGS................ 21 9. FULL EMPLOYMENT NATIONAL OUTPUT AND CAPACITY NATIONAL OUTPUT..................................23 10. PREDICTIONS: TRENDS AND BLIPS........................... 25 11. OF DEFICITS AND DEBT.............................................. 27 12. THE FED, INTEREST RATES AND SIGNALS...............29 13. NOMINAL AND REAL INTEREST RATES..................... 31 14. INFLATION INDEXES.................................................... 33 15. ADJUSTMENT PERIODS: FINANCIAL MARKETS AND REAL MARKETS............................................................ 35 16. CROWDING OUT........................................................... 37 17. STEEP VS. SHALLOW YIELD CURVES........................39 18. THE "TWIN DEFICITS"...................................................43 19. THE EFFECT OF INTEREST RATE DIFFERENTIALS ON CAPITAL MOVEMENTS BETWEEN COUNTRIES.45 20. SMALL COUNTRIES AND LARGE COUNTRIES.......... 49 21. OVERVALUATION OF THE DOLLAR............................ 51 22. TYPES OF EXCHANGE RATES.................................... 53 23. FIXED VS. FLOATING EXCHANGE RATES..................55 24. DIFFERENT GROWTH RATES IN DIFFERENT COUNTRIES.................................................................57 25. CONVERGENCE........................................................... 61 26. ECONOMIC GROWTH, PER CAPITA GROWTH AND GROWTH IN LEISURE.................................................65 27. LABOR PRODUCTIVITY GROWTH...............................67 28. CAPITAL GAINS, INFLATION AND TAXES................... 69 29. BUBBLES....................................................................... 71 30. INCOME DISTRIBUTION............................................... 73 31. WHO PAYS FEDERAL TAXES IN THE US....................77 32. SOME FACTS ON US INFLATION IN THE "COST OF LIVING".........................................................................79 33. SOME FACTS ON US PER CAPITA GROWTH RATES IN REAL GDP............................................................... 81 34. SOME FACTS ON US POPULATION GROWTH RATES. 83 35. BEHAVIOR AND THEORY............................................. 85 36 POLICY: THE SHORT RUN AND THE LONG RUN........87 37. THE ACHILLES HEEL OF THE US ECONOMY.............91 APPENDIX........................................................................... 97