Macroeconomics, 3rd Edition

Overall, a little more mathed up than some other intro books. Works if students have the background, a point of issue if not.Pretty good, but lacking Krugman's editorialized voice that is familiar to his work in the Times. Below is further thoughts not as specific to this book, but raised from a semester working with it. There are many interesting concepts that come forth in the study of basic economics. One of the most interesting things is the concept of the opportunity cost. It is easy to think of the accounting cost of an item. How much does that movie cost? Well, a ticket can be had for ten dollars. Nevertheless, the true cost of something is not just the dollar amount. The true cost is what you must give up in order to do something. Therefore, the opportunity cost is not just the ten dollars, but also the cost of the next best thing that you might be doing. Going to that movie is added to the cost of not studying for that exam (Krugman & Wells. p. 7). Most people have an implicit understanding of the concept, but it is not formally codified until the formal study of economics understands. A second interesting thing is the topic of fractional reserve banking. It is easy to take banking institutions for granted when thinking of the economy. They work within the economy, but they have an essential role in expanding the money supply. Banks have money, but to grow their own profits, they have to grow their balance sheets. Through lending, banks create money. For example, a bank starts with $100,000. It can then lend an amount up to the reserve ratio, 10% in this example. That means it lends $90,000 and keeps $10,000 on its books. The amazing thing is that it is not done. In our model, one bank stands in for the whole banking system. So that money that was lent is deposited back into it and they can lend it back out, and so on as long as its assets are 10% of its liabilities (Krugman & Wells. p. 418). In this manner, banks are not just mediators in the financial system, but they help create monetary policy. This can cause issues tough. In the aftermath of the most recent financial crisis, banks were given all sorts of money in hopes that they would then turn around and take advantage of the magic of fractional reserve banking. The problem was that banks were looking for creditworthy individuals, and potential borrowers were skittish. In that manner, the Federal Reserve did not get the sort of reaction it had been hoping for initially. A third interesting part of introductory economics is that it simplifies many complex issues with models. Looking at these models may make people think that there are easy explanations for complex issues when in fact every model is a simplification on the messy real world. For example, the intro econ view is that the labor market is like all efficient markets. There is a labor supply curve, and a labor demand curve, and there is an equilibrium price. There is also a wage floor, the minimum wage. In introductory economics, the problem is the wage floor creates structural unemployment.There is not enough spoken of the simplifications that have taken place to illustrate the concept. All the math makes it sound as if it is all unquestionably true. The example here is the labor market. The labor market supply and demand curve intersection graph assumes five big things that are not true. First is that all workers are the same. Second is that all jobs are the same. Third is that there is no such thing as search and the markets clear. Fourth, they assume that there is no government to act as an agent of redistribution. Finally, they assume perfect information.All these assumption cloud the reality of labor market(s). There are many labor markets, and for most, the equilibrium price is above the wage floor, so the wage floor only sets a standard. Those where the wage floor is above the clearing price, the jobs and the pay are horrible. A government should step in, as ours does to a limited extent, to make better the lives of those workers who work and those who are locked out of the labor market through structural unemployment. The problem is that a certain party has demonized those at the bottom of the wage scale, calling them takers and welfare queens. That means people want to work; there is a cultural and monetary advantage to working where there is not to just relying on benefits.The econ 101 view is also a market with perfect information. The employer has an information asymmetry in that area, in that it knows more about the labor market than the potential employee does; this is helped in some form by sites like Glassdoor, but it is imperfect. There is also the power gradient in that the employer can take someone down to the clearing price, but in some labor markets, it is not possible to live at the clearing price for labor: thus the government-mandated wage floor.The other option is to look at the labor markets that do clear. Here the example is migrant farm workers. They are paid less than the minimum and have no guarantee of employment. When Alabama cracked down on undocumented workers, farmers could not get people to harvest their fields because the national market price of farm labor was too low for people used to some labor protection. The jobs are that bad, and the government protection minimal. That’s why I think a minimum wage is good, because it helps pull those shadow wages up, and there is less poverty overall with transfers even with structural employment.Overall, the question should be about the appropriate level of the minimum wage, and stricter enforcement of wage and labor laws, not less. Because there is such a thing as structural unemployment, but in reality it does not map as easily to a graph as you learn it in introductory economics.Many more concepts spring up that are of interest and worthy of deep study. These are just the tip of the iceberg.Krugman, P. & Wells, R. (2013). Macroeconomics. New York, NY : Worth Publishers

I ordered this book for my college student. I am glad I purchased this item a few days ago and received a great price for my new book. Amazon continues to provide great service in delivering your products on time and in good shape.Once my student begins class I will post an update about the content of the book.April 2013. . .I'm back with an update. My college student found this book to be very helpful in understanding MacroEcon. She indicated the book is easy to follow, the examples help with the understanding of the course material which all support the class subject and what her professor is teaching. It's nice to know the professor assigns classwork that requires the use of the textbook and to see my student actually use the textbook in addition to class notes.

I've read other macro texts and I prefer this one the best. There are a lot of real life examples of economics that relate to today's world (which helps in understanding) and the explanations in the text also serve to be very helpful as well. It's a little long winded, and somewhat repetitive, but believe it or not, I've found that this is very very helpful for one's understanding of the material. Plus it starts out very basic, allowing anyone to learn a basic understanding of how our modern economy, whether it be for a class or on their own.

Shipped quickly and was here sooner than expected. A good book overall, easy to read and understand. I gave it 4 stars as the book is biases toward the liberal side of economics. Stressing how "great" they think government intervention is in our economy.

Had to use this for my Econ 102 class at Michigan. It looks nice, and it's not too bulky, but it has NO example problems, NO equation index, and it's almost useless when trying to understand the mathematics of the problems. If you have to use this book for your class, make sure you buy the study guide (it's like ten bucks used) and make sure you get a tutor!

Great examples and callout boxes, and summations of chapters. A few too many esoteric idealized graphs for me, but I guess that comes with the realm.

I like it. The copy is not bad for the use book. I expedite the shipping and they should it next day I very happy the services.

Came in clutch no need to pay any more than ya need, especially in college.

Krugman is no stranger to clear and amiable writing. The book will appeal to people at different levels

Very "american". A lot of pages, but unfortunately fairly little substance, although what is there is good. Not recommended for self-study.

This modern textbook covers everything needed to understand the discourse on economics, macroeconomic analysis, in a modern light. It's full of real-life examples of economics in action which turns study matter into interesting study matter.Highly recommended if you want a self-study course in the topic.

The book is well structured. Each chapter has useful summaries at the end. Key concepts are well highlited. Negative aspect: too much concentrated on US examples.

it is a good text, but I ordered too fast I was looking for his Microeconomics text. Sometimes it is too easy to order.