What is Macroeconomics (concept and definition)

Macroeconomics is a branch of economics that studies the behavior, structure and capacity of large aggregates at a national or regional level, such as: economic growth, employment and unemployment rate, interest rate, inflation, among others. The word macro comes from the Greek macros which means big.

Macroeconomics studies aggregate indicators such as GDP, unemployment rates, price indices and seeks to understand and explain the economy as a whole and predict economic crises.

In the same way, macroeconomics seeks to develop models that explain the relationship between the different variants of the economy such as; national income, production, consumption, unemployment, inflation, savings, investment, international trade and international finance.

Difference between macroeconomics and microeconomics

Macroeconomics is responsible for the economic study of global phenomena of a country or region such as economic growth, inflation, unemployment rate, while microeconomics studies the behavior of individual economic agents such as the individual, company, family.

See also Microeconomics.

Macroeconomic variables

Macroeconomics periodically analyzes variables and indicators in order to define the economic policies aimed at achieving balance and growth of the economy of a certain country or region.

In this sense, macroeconomic models base their study on the following aspects:

Economic growth: when we talk about an economic increase it is because there is a favorable trade balance, that is, there is a improvement of some indicators as; the production of goods and services, savings, investment, increase in per capita calorie trade, etc., therefore, is the increase in income for a country or a region during a given period.
Gross national product: is a macroeconomic quantity or magnitude to express the monetary value of the production of goods and services of a region or country during a certain time, then refers to the internal production of goods and services carried out by a certain country and then these are marketed internally or externally.
Inflation: strictly it is the increase in prices of goods and services existing on the market during a period. When the prices of goods and services increase, each unit of currency is enough to buy fewer goods and services, therefore, inflation reflects the decrease in purchasing power of currency. If we talk about prices and inflation, the costs for the production of said goods and services must be taken into account since that is where the increase in the prices of goods and services is reflected or the surplus value existing in said goods can also be analyzed. and services.
Unemployment: It is the situation in which a worker finds himself when he is unemployed and in the same way does not receive any salary. It can also be understood as the number of unemployed or unemployed people in the population within a country or territory, which is reflected through a rate.
International economy: deals with global monetary aspects, the commercial policy that a certain territory or country may have with the rest of the world is directly related to international trade, that is, with the purchases and sales of products and services that are carried out with other countries or abroad.

Keynesian Macroeconomics

Economic theory proposed by John Maynard Keynes published in 1936 in his work “General Theory of Employment, Interest and Money” as a result of the great depression that Great Britain and the United States faced in 1929. Keynes in his theory proposes the use of monetary and fiscal policies to regulate the level of aggregate demand. Keynes proposes in his theory the increase in public spending to generate jobs until the point of reaching a balance.

Macroeconomics Paul Samuelson

Samuelson rewrote a part of Economic Theory and was fundamental in the elaboration of the neoclassical-Keynesian synthesis since he incorporated principles from both. Paul Samuelson applied thermodynamic mathematical methods to economics and pointed out 3 basic questions that every economic system must answer; What goods and services and in what quantity are going to be produced, How are they going to be produced and For whom.

See also: GDP and Economic Growth.

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