New in This Version

New in Version 9.1:

• Updated with over 115 new hyperlinks that include brief video lectures scripted and recorded by John B. Taylor that align with the text narrative to introduce, explain, and illustrate key economic concepts at the most teachable moments in the book. Hyperlinks include additional videos that apply topics to real-world situations and links to webpages that enrich online courses, engage students, and reinforce or augment that narrative.
• Updated Chapter 5’s introduction to reflect the current economic situation (“Macroeconomics: The Big Picture”).
• Updated all GDP, inflation, and unemployment data in Chapter 5’s charts and figures.
• Updated the National Bureau of Economic Research (NBER) summary table with start and end dates of the 2020 recession sparked by the coronavirus pandemic.
• Updated the application of the economic fluctuations model in Section 13.5 to better reflect the impact of the 2020 coronavirus pandemic (“Using the Economic Fluctuations Model to Understand the Impact of the COVID-19 Pandemic on the Macroeconomy”).

Reflects the recent updates made to Version 9.0:

Many graphs are hyperlinked to the underlying Federal Reserve Economic Data (FRED) source. Students can easily link to the most updated data for these graphs and become familiar with manipulating data from the Federal Reserve. 

Key updates include:

• Can AI and machine learning improve resource allocations? (Ch. 1)
• Netflix pricing and demand elasticity. (Ch. 4)
• Updated economic data includes increasingly positive economic data prior to 2020, initial recessionary impact of the COVID-19 pandemic as reflected in first- and second-quarter economic data, and fluctuations in labor market strength. (Ch. 5–7)
• New coverage of cryptocurrencies, Venezuela’s hyperinflation, negative interest rates, and Fed tapering. (Ch. 10)
• Fully revised discussion of post-2016 recovery following the Great Recession and impact of the COVID-19 pandemic on the recovery. (Ch. 11)
• New discussion of why inflation was absent from the Great Recession’s recovery—and what considerations might be missing from economic models as a result. (Ch. 13)
• Tax discussions updated to align with Tax Cut and Jobs Act of 2017. (Ch. 14)
• Updated discussion of the Fed’s balance sheet normalization and unwinding of quantitative easing (QE) from 2017–2019. Coverage of renewed growth of the Fed’s balance sheet in response to the impact of the COVID-19 pandemic and prospects for eventual unwinding. New coverage of negative interest rates in Sweden and Switzerland. (Ch. 15)
• Explains the switch from poverty-alleviation goals from Millennium Development Goals to Sustainable Development Goals. China’s Belt and Road initiatives that propel that country to a global leader in funding development projects. (Ch. 17)
• Explores the Trump Administration’s trade policies and their impacts, including the USMCA’s replacement of NAFTA, the brewing trade war with China, and how import tariffs impact U.S. consumers. (Ch. 18)
• Updates specific to the COVID-19 pandemic throughout include:
• New boxed feature on “The Price System During National Disasters.” (Section 1.3)
• Clear illustration of differences between correlation and causation using impact of the pandemic on gas prices and miles traveled. (Section 2.2)
• Ventilators and impact of demand on pricing. (Ch. 3 Introduction)
• Price elasticity of supply for scarce goods in a crisis. (Section 4.4)
• General economic turmoil induced by early reactions to the pandemic including economic slowdown, increase in unemployment, recessionary impact, and initial monetary and fiscal policy responses. (Ch. 5 Introduction, Section 5.2–5.3)
• The pandemic’s impact on unemployment. (Ch. 8 Introduction)
• The pandemic’s impact on labor markets. (Section 8.1)
• Fed interventions and a new round of quantitative easing (QE). (Section 10.2)
• The pandemic-induced recession and its potential duration. (Ch. 11 Introduction and Section 11.1)
• Passage and impact of CARES Act. (Ch. 12 Introduction)
• Unexpected transition to the pandemic-induced recession and using the model to analyze the policy response. (Ch. 13 Introduction and Section 13.5)
• Impact of policy responses to the pandemic on the national debt and differing policy views on the right mix of fiscal interventions (Section 14.1 and 14.2)
• The Fed’s response to the pandemic, new balance sheet expansion, a return to zero interest rate policy, security purchases, and “Main Street” lending program. (Ch. 15 Introduction, Sections 15.1–15.3 and 15.5)
• Global economic shocks caused by the pandemic. (Ch. 17 Introduction)
• National security-based trade restrictions on supply chains for personal protective equipment (PPE) in a health crisis (Section 18.7)