The Nature and Scope of Macroeconomics by Smriti Chand Macro Economics
The Nature and Scope of Macroeconomics!
Introduction:
The term ‘macro’ was first used in economics by Ragner Frisch in 1933. But as a methodological approach to economic problems, it originated with the Mercantilists in the 16th and 17th centuries. They were concerned with the economic system as a whole.
In the 18th century, the Physiocrats adopted it in their Table Economies to show the ‘circulation of wealth’ (i.e., the net product) among the three classes represented by farmers, landowners and the sterile class. Malthus, Sismondi and Marx in the 19th century dealt with macroeconomic problems. Walras, Wicksell and Fisher were the modern contributors to the development of macroeconomic analysis before Keynes.
Certain economists, like Cassel, Marshall, Pigou, Robertson, Hayek and Hawtrey, developed a theory of money and general prices in the decade following the First World War. But credit goes to Keynes who finally developed a general theory of income, output and employment in the wake of the Great Depression.
Contents:
Nature of Macroeconomics
Difference between Microeconomics and Macroeconomics
Dependence of Microeconomic Theory on Macroeconomics
Dependence of Macroeconomics on Microeconomic Theory
Macro Statics, Macro Dynamics and Comparative Statics
Transition from Microeconomics to Macroeconomics
Stock and Flow Concepts
1. Nature of Macroeconomics:________________________________________
Macroeconomics is the study of aggregates or averages covering the entire economy, such as total employment, national income, national output, total investment, total consumption, total savings, aggregate supply, aggregate demand, and general price level, wage level, and cost structure.
In other words, it is aggregative economics which examines the interrelations among the various aggregates,