Do you want an intermediate macroeconomics text that is brief with a core presentation of material? Do your students find detailed discussions of disagreements among economists dull and irrelevant to today''s policy issues? Hubbard, O''Brien, and Rafferty''s text Intermediate Macroeconomics, consists of 12 core chapters and 3 "extension" chapters. Fewer topics covered well is better than many topics covered superficially. Hubbard, O''Brien, and Rafferty achieve brevity in two ways: 1. "Dueling schools of thought" approach no longer represents well the actual views of the profession so it is almost entirely ignored. Plus, students find detailed discussions of disagreements among economists to be dull and irrelevant to today''s policy issues. 2. All nonessential topics will be found in Part 4, "Extensions," at the end of the text. While many of the topics covered in the three chapters in Part 4 are important, they are not essential to the basic macroeconomic story.
Don''t you think it is better to present students with the key ideas in a relatively brief way with minimum distractions and consider additional material during the last few weeks of the course when students have mastered the key ideas! Would you like to shift the emphasis in teaching intermediate macroeconomics and use a more appropriate model for this course? Hubbard, O''Brien, and Rafferty use a modern short-run model (IS-MP) that is appropriate for the intermediate course (Chapters 9-11). The authors believe the IS curve story provides a good account of the sources of fluctuations in real GDP in the short run when prices are fixed. But because the Fed targets interest rates rather than the money stock, they substitute a monetary policy, MP, curve for the LM curve. The result is similar to the IS-MP model. Hubbard, O''Brien, and Rafferty cover the IS-MP model in Chapters 10-11 and a full appendix on the IS-LM model at the end of the chapter for those who wish to cover that model. The IS-MP model is used to analyze monetary policy and fiscal policy. In the first edition, the IS--MP model was covered in a single rather long chapter. To aid student understanding, this edition features a slower development of the model across two briefer chapters.
NEW: In light of feedback, the authors reorganized their discussion of the short-run model as follows: Chapter 9, "Business Cycles," remains largely the same as in the first edition, but the authors added a new section that discusses the basic aggregate demand--aggregate supply ( AD--AS ) model. They added this section in response to feedback that we had not made sufficiently clear that IS--MP is a model of aggregate demand. With a review of aggregate demand in Chapter 9, students are now better equipped to understand the discussion of the IS--MP model in Chapter 10. Chapter 10, "Explaining Aggregate Demand: The IS--MP Model," is devoted to building the basic model with increased discussion of the determinants of the IS curve. Chapter 11, "The IS--MP Model: Adding Inflation and the Open Economy," as the title indicates, adds the Phillips curve and open-economy analysis to complete the discussion of the short-run model. Wouldn''t you like to include significant coverage of financial markets in this course? Hubbard, O''Brien, and Rafferty include significant coverage of financial markets beginning with Chapter 3, "The Financial System. " To understand the link between nominal short-term rates and real long-term rates, students need to be introduced to the role of expectations and the term structure of interest rates. The authors provide a careful, but concise discussion of the term structure and follow-up by analyzing why the Fed''s interest rate targeting may sometimes fail to attain its goals.
They also include an overview of commercial banks and an overview of securitization along with a discussion of the increased importance of investment banks. The events of 2008 have made it clear that an exclusive focus on commercial banks provides too narrow an overview of the financial system. Do your students know the economic explanation of how we got to where we are today? Early discussion of long-run growth. Students need to be able to distinguish the macroeconomic forest - long run growth - from the macroeconomic trees - short run fluctuations in real GDP, employment, and the rate of inflation. Because many macroeconomic principles texts put a heavy emphasis on the short run, many students enter the intermediate macro course thinking that macroeconomics is exclusively concerned with short-run fluctions. Students also need to first understand both a basic model of long-run growth and the determination of GDP in a flexible-price model before moving on to the discussion of short-run fluctuations and short-run policy. Do your students understand the broader reach of Fed policy, in particular the increased importance of investment banking and role of securitization in modern financial markets? Hubbard, O''Brien, and Rafferty discuss modern Fed policy and its broadened emphasis beyond interest rate targeting. The developments of 2007-2009 have demonstrated that the Fed has moved beyond the focus on interest rate targeting that dominated policy since the early 1980s.
To understand the broader reach of Fed policy, students need to be introduced to material, in particular the increased importance of investment banking and role of securitization in modern financial markets, that is largely missing from competing texts. In addition, recent Fed policy initiatives require extended discussion of issues of moral hazard. While these discussions are common in money and banking texts, they have been largely ignored in intermediate macro texts. Special Features that Student and Professor Reviewers indicate as the most successful pedagogical features available in any economics text on the market today! Do your students, even at the intermediate level, think economics is too dry and abstract? A Real-World Approach! At the intermediate level, students will inevitably have to endure a greater amount of model building and algebra than they encountered in their principles course. Nevertheless, a real world approach can keep students interested. Each chapter opens with a real world example drawn from either policy issues in the news or the business world to help students enter the chapter with a greater understanding that the material will be of direct relevance. The example is revisited within the chapter to reinforce the link between macroeconomics and the real world. Do your students need help with being able to apply macroeconomic concepts to a news article? An Inside Look, a two-page feature located at the close of each chapter, shows students how to apply the concepts from the chapter to the analysis of a news article.
This feature presents an excerpt from an article, an analysis of the article, graph(s), and critical thinking questions. Do your students struggle to apply the learned material when solving problems? Solved problems within the chapter. Including solved problems in the text of the chapter may have been the most popular pedagogical innovation in the Hubbard and O''Brien principles of economics text, now in its third edition, and the money and banking book, now in its first edition. Students have only fully learned the material when they are capable of applying it when solving problems. Certainly, instructors expect students to solve problems on examinations. The Hubbard, O''Brien, and Rafferty solved problems highlight important concepts in each chapter and provide students with step-by-step guidance in solving them. Each solved problem is reinforced by a related problem at the end of the chapter. Students can complete related Solved problems on MyEconLab too.
Do your students know how to interpret policy issues they read on the Web and in newspapers? Making the Connection features present real-world reinforcement of key concepts and help students learn how to interpret what they read on the Web and in newspapers. Most Making the Connection features use relevant, stimulating, and provocative news stories, many focused on pressing policy issues. NEW: The second edition includes 10 new Making the Connection features at the end of each chapter. Making the Connections retained from the first edition have been updated with the most recent data. Some topics include: "Does the CPI Provide a Good Measure of Inflation for a Family with College Students?" (Chapter 2, "Measuring the Macroeconomy") "Greece Experiences a ''Bank Jog''" (Chapter 4, "The Global Financial System") "Making a Financial Killing by Buying Brazilian Bonds?" (Chapter 4, "The Global Financial System") "Did the 2007--2009 Recession Break Okun''s Law?" (Chapter 9, "Business Cycles") "Lots of Money but Not Much Inflation Following the Recession of 2007--2009" (Chapter 11, "The IS--MP Model: Adding Inflation and the Open Economy") Do your students struggle to understand the policy debates they hear about on the news? Key Issue-And-Question Approach. Hubbard, O''Brien, and Rafferty present 14 key issues and questions that provide students with a roadmap for the rest of the book and help them to understand that learning macroeconomics will allow them to analyze intelligently the policy debates they hear about on the news. Hubbard, O''Brien, and Rafferty start each chapter with a key issue and key question and end the chapter by using the concepts introduced in the chapter to answer the question. <.