Macroeconomics is the part of economic theory that focuses on the comprehensive study of the economy, with regard to the total amount of goods and services produced, total income, level of employment, productive resources and general behavior of prices. Macroeconomics can be used to analyze what is the best way to influence policy objectives, such as how to make the economy grow, achieve price stability, promote employment and a stable and sustainable balance of payments. For instance, macroeconomics focuses on phenomena that affect the indicator variables of the standard of living of a society. Furthermore, the analyzer mostly focuses on the economic situation of the country in which they live, enabling an understanding of the influential events. In contrast, microeconomics studies the behavior of individual economic agents, such as consumers, firms or workers.


Fiscal Policy

In economics and political science, fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. The two main instruments of fiscal policy are government taxation and expenditure. Changes in the level and composition of taxation and government spending can impact the following variables in the economy:

-          Aggregate demand and the level of economic activity;

-          The pattern of resource allocation;

-          The distribution of income.

Fiscal policy refers to the use of the government budget to influence economic activity.

Monetary Economics


Monetary economics provides a framework for the analysis of money in its function as a medium of change, deposit value and accounting unit. It considers how money, such as fiat money, can only gain acceptance due its suitability as a public good. It examines the effects of monetary systems, including money regulation and those associated with financial institutions, as well as other international issues. The methods of monetary economics involve derivatives and tests of the consequences of the use of money as a substitute for other assets and the basis of explicit frictions.

The areas of research are:

  • Empirical determinants and measures of money supply, either by small, general or aggregate indicators, in relation to economic activity.
  • Theories of debt-deflation and of general balance that represent a change in equity of borrowers, amplifying fluctuations by a credit change in the same direction.
  • Monetary implications of the relationship between asset prices and macroeconomics.
  • The importance and stability of the relationship between money supply and interest rates, as wells as price level and nominal and real product of the economy.
  • Monetary impacts on interest rates and the temporal structure of interest rates.
  • Lessons from finance and/or monetary history
  • Transition mechanisms of monetary policy in terms macroeconomics.
  • Macroeconomic relationships of monetary and fiscal policy
  • Money neutrality versus monetary illusion, such as a change in money supply, price levels or inflation in the production.
  • Tests of the rational expectation theory, such as changes in production or in inflation of monetary policy.
  • Monetary implications of asymmetric and imperfect information and fraudulent finances.
  • Economic policy of financial regulation and monetary policy
  • Possible advantages of following a monetary policy rule for avoiding inefficiencies of time inconsistency of discretional policy.

International Economics


International economics is a fundamentally macroeconomic branch of the economic science. It aims to study the economic movements that a country performs with the rest of the world, which can be of a diverse nature – commercial, financial, technology, tourism, etc. International economics also addresses global monetary issues, commercial policy theory, currency markets, the results of using different currencies in different countries and the adjustment of payment balances. International economic issues have experienced a very important boom since the end of the 20th century, since there exists an increasingly greater interrelation between what happens in international markets and what happens in individual countries.

International economics is an area of economic science that forms part of the social sciences. It is split into two main branches: international trade theory and international finance theory. Economies are interlinked with the rest of the world, firstly due to international trade, that is the buying and selling of products and services that come from abroad, and secondly through finance, as the residents and institutions of a particular country may have financial assets issued in another country. While among citizens financial investments abroad are rare, banks and large companies, on the other hand, maintain financial relations at an international level, resulting in a relationship between the financial markets of different countries.

Economic Growth


Economic growth is defined as the increase in the amount of the goods and services produced by an economy over time. It is conventionally measured as the percent rate of increase in real gross domestic product, or real GDP. Growth is usually calculated in real terms, i.e. inflation adjustment terms, in order to obviate the distorting effect of inflation on the price of the goods and services produced. In economics, "economic growth" or "economic growth theory" typically refers to growth of potential output, i.e., production at "full employment," which is caused by growth in aggregate demand or observed output.

As an area of study, economic growth is generally distinguished from development economics. The former is primarily the study of how countries can advance their economies. The latter is the study of the economic aspects of the development process in low-income countries.

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