Principles of Economics: Macroeconomics

What you will learn

In this free course, following our Principles of Microeconomics course, you’ll continue to explore the economic way of thinking and the role incentives play in all our lives.

We’ll cover fundamental macroeconomics questions such as: Why do some countries grow rich while others remain poor? How important is a country’s banking system — and what happened during the recent financial crisis? How did Zimbabwe end up with an inflation rate that rose into the quadrillions?

We’ll also cover important topics like the Federal Reserve, monetary policy, fiscal policy, the Solow Growth Model, institutional analysis, the “economics of ideas,” and more.

1. GDP

What Is Gross Domestic Product (GDP)?

Nominal vs. Real GDP

Real GDP Per Capita and the Standard of Living

Splitting GDP

2. The Wealth of Nations and Economic Growth

Basic Facts of Wealth

Growth Rates Are Crucial

An Orgy of Innovation

Growth Miracles and Growth Disasters

The Importance of Institutions

Geography and Economic Growth

The Puzzle of Growth

3. Growth, Capital Accumulation, and the Economics of Ideas

Introduction to the Solow Model

Physical Capital and Diminishing Returns

The Solow Model and the Steady State

Office Hours: The Solow Model

Human Capital and Conditional Convergence

The Solow Model and Ideas

Office Hours: The Solow Model: Investments vs. Ideas

The Economics of Ideas

Patents, Prizes, and Subsidies

The Idea Equation

TED Talk: How Ideas Trump Crises

4. Savings, Investment, and the Financial System

Saving and Borrowing

What Do Banks Do?

Intro to Stock Markets

Intro to the Bond Market

Office Hours: The Bond Market

Four Reasons Financial Intermediaries Fail

The Great Recession

5. Personal Finance

How Expert Are Expert Stock Pickers?

Can You Beat the Market?

Investing: Why You Should Diversify

Who Is More Rational? You or the Market?

Econ Duel: Rent or Buy?

6. Unemployment and Labor Force Participation

The Economics of Choosing the Right Career

Defining the Unemployment Rate

Is Unemployment Undercounted?

Frictional Unemployment

Structural Unemployment

Cyclical Unemployment

Labor Force Participation

Taxing Work

Women Working: What’s the Pill Got to Do With It?

7. Inflation and Quantity Theory of Money

Zimbabwe and Hyperinflation: Who Wants to Be a Trillionaire?

Measuring Inflation

Quantity Theory of Money

Causes of Inflation

Costs of Inflation: Price Confusion and Money Illusion

Costs of Inflation: Financial Intermediation Failure

Office Hours: Costs of Inflation

Why Governments Create Inflation

8. Business Fluctuations

Intro to Business Fluctuations

The Aggregate Demand Curve

The Long-Run Aggregate Supply Curve

Sticky Wages

The Short-Run Aggregate Supply Curve

Changes in Velocity

Understanding the Great Depression

Office Hours: Using the AD-AS Model

Office Hours: Multiple Shocks with the AD-AS Model

9. Business Cycle Theories

Game of Theories: The Keynesians

Game of Theories: The Monetarists

Game of Theories: Real Business Cycle

Game of Theories: The Austrians

Game of Theories: The Great Recession

10. Monetary Policy and the Federal Reserve

Monetary Policy and the Fed

The U.S. Money Supplies

The Money Multiplier

How the Fed Worked: Before the Great Recession

How the Fed Works: After the Great Recession

The Federal Reserve as Lender of Last Resort

Monetary Policy: The Best Case Scenario

Monetary Policy: The Negative Real Shock Dilemma

When the Fed Does Too Much

11. Fiscal Policy

Introduction to Fiscal Policy

Fiscal Policy: The Best Case Scenario

The Limits of Fiscal Policy

The Dangers of Fiscal Policy

Fiscal Policy and Crowding Out