,THE REAL ECONOMY IN THE LONG RUN
12 Production and Growth
13 Saving, Investment, and the Financial System These chapters describe the forces that in the long run determine
key real variables, including growth in GDP, saving, investment,
14 The Basic Tools of Finance real interest rates, and unemployment.
15 Unemployment
MONEY AND PRICES IN THE LONG RUN
16 The Monetary System The monetary system is crucial in determining the long-run
behavior of the price level, the inflation rate, and other
17 Money Growth and Inflation nominal variables.
THE MACROECONOMICS OF OPEN ECONOMIES
18 Open-Economy Macroeconomics: A nation’s economic interactions with other nations are described
Basic Concepts by its trade balance, net foreign investment, and exchange rate.
19 A Macroeconomic Theory of the A long-run model of the open economy explains the determinants
Open Economy of the trade balance, the real exchange rate, and other real
variables.
SHORT-RUN ECONOMIC FLUCTUATIONS
20 Aggregate Demand and Aggregate Supply
The model of aggregate demand and aggregate supply explains
21 The Influence of Monetary and Fiscal Policy short-run economic fluctuations, the short-run effects of monetary
on Aggregate Demand and fiscal policy, and the short-run linkage between real and
22 The Short-Run Trade-off nominal variables.
between Inflation and Unemployment
FINAL THOUGHTS
A capstone chapter presents both sides of six major debates
23 Six Debates over Macroeconomic Policy
over economic policy.
, Principles of Macroeconomics, 6E © 2012, 2009 South-Western, Cengage Learning
N. Gregory Mankiw
ALL RIGHTS RESERVED. No part of this work covered by the copyright
Vice President of Editorial, Business: herein may be reproduced, transmitted, stored, or used in any form
Jack W. Calhoun or by any means graphic, electronic, or mechanical, including but not
Editor-in-Chief: Joseph Sabatino limited to photocopying, recording, scanning, digitizing, taping, web
Executive Editor: Mike Worls distribution, information networks, or information storage and retrieval
systems, except as permitted under Section 107 or 108 of the 1976
Developmental Editor: Jane Tufts United States Copyright Act, without the prior written permission
Contributing Editors: Jennifer E. Thomas of the publisher.
and Katie Trotta
Editorial Assistant: Allyn Bissmeyer For product information and technology assistance, contact us at
Senior Marketing Manager: John Carey Cengage Learning Customer & Sales Support, 1-800-354-9706
Associate Marketing Manager: Betty Jung For permission to use material from this text or product,
submit all requests online at www.cengage.com/permissions
Senior Content Project Manager: Further permissions questions can be emailed to
Colleen A. Farmer
Media Editor: Sharon Morgan
Senior Frontlist Buyer, Manufacturing: ExamView® is a registered trademark of eInstruction Corp. Windows
Kevin Kluck is a registered trademark of the Microsoft Corporation used herein
Senior Marketing Communications Manager: under license. Macintosh and Power Macintosh are registered
Sarah Greber trademarks of Apple Computer, Inc. used herein under license.
© 2008 Cengage Learning. All Rights Reserved.
Production Service: Cadmus
Senior Art Director: Michelle Kunkler
Library of Congress Control Number: 2010941871
Cover and Internal Designer: Ke Design
Cengage Learning WebTutorTM is a trademark of Cengage Learning.
Internal Illustrations: Larry Moore
Cover Image: © Chalmers Bequest, Hackney ISBN 13: 978-0-538-45306-6
Art Gallery, UK / Bridgeman Art Library ISBN 10: 0-538-45306-0
International; © marc fischer / iStockphoto
Rights Acquisitions Specialist, Photos: John Hill South-Western Cengage Learning
5191 Natorp Boulevard
Mason, OH 45040
USA
Cengage Learning products are represented in Canada by
Nelson Education, Ltd.
For your course and learning solutions, visit www.cengage.com
Purchase any of our products at your local college store or at our
preferred online store www.cengageBrain.com
Printed in the United States of America
1 2 3 4 5 6 7 14 13 12 11
, about the
author
N. Gregory Mankiw is professor of economics
at Harvard University. As a student, he studied
economics at Princeton University and MIT. As
a teacher, he has taught macroeconomics, micro-
economics, statistics, and principles of economics.
He even spent one summer long ago as a sailing
instructor on Long Beach Island.
Professor Mankiw is a prolific writer and a regu-
lar participant in academic and policy debates. His
work has been published in scholarly journals, such
as the American Economic Review, Journal of Political
Economy, and Quarterly Journal of Economics, and in
more popular forums, such as The New York Times
and The Wall Street Journal. He is also author of
the best-selling intermediate-level textbook Macroeconomics (Worth Publishers).
In addition to his teaching, research, and writing, Professor Mankiw has been a
research associate of the National Bureau of Economic Research, an adviser to the
Congressional Budget Office and the Federal Reserve Banks of Boston and New
York, and a member of the ETS test development committee for the Advanced
Placement exam in economics. From 2003 to 2005, he served as chairman of the
President’s Council of Economic Advisers.
Professor Mankiw lives in Wellesley, Massachusetts, with his wife, Deborah,
three children, Catherine, Nicholas, and Peter, and their border terrier, Tobin.
vi
12 Production and Growth
13 Saving, Investment, and the Financial System These chapters describe the forces that in the long run determine
key real variables, including growth in GDP, saving, investment,
14 The Basic Tools of Finance real interest rates, and unemployment.
15 Unemployment
MONEY AND PRICES IN THE LONG RUN
16 The Monetary System The monetary system is crucial in determining the long-run
behavior of the price level, the inflation rate, and other
17 Money Growth and Inflation nominal variables.
THE MACROECONOMICS OF OPEN ECONOMIES
18 Open-Economy Macroeconomics: A nation’s economic interactions with other nations are described
Basic Concepts by its trade balance, net foreign investment, and exchange rate.
19 A Macroeconomic Theory of the A long-run model of the open economy explains the determinants
Open Economy of the trade balance, the real exchange rate, and other real
variables.
SHORT-RUN ECONOMIC FLUCTUATIONS
20 Aggregate Demand and Aggregate Supply
The model of aggregate demand and aggregate supply explains
21 The Influence of Monetary and Fiscal Policy short-run economic fluctuations, the short-run effects of monetary
on Aggregate Demand and fiscal policy, and the short-run linkage between real and
22 The Short-Run Trade-off nominal variables.
between Inflation and Unemployment
FINAL THOUGHTS
A capstone chapter presents both sides of six major debates
23 Six Debates over Macroeconomic Policy
over economic policy.
, Principles of Macroeconomics, 6E © 2012, 2009 South-Western, Cengage Learning
N. Gregory Mankiw
ALL RIGHTS RESERVED. No part of this work covered by the copyright
Vice President of Editorial, Business: herein may be reproduced, transmitted, stored, or used in any form
Jack W. Calhoun or by any means graphic, electronic, or mechanical, including but not
Editor-in-Chief: Joseph Sabatino limited to photocopying, recording, scanning, digitizing, taping, web
Executive Editor: Mike Worls distribution, information networks, or information storage and retrieval
systems, except as permitted under Section 107 or 108 of the 1976
Developmental Editor: Jane Tufts United States Copyright Act, without the prior written permission
Contributing Editors: Jennifer E. Thomas of the publisher.
and Katie Trotta
Editorial Assistant: Allyn Bissmeyer For product information and technology assistance, contact us at
Senior Marketing Manager: John Carey Cengage Learning Customer & Sales Support, 1-800-354-9706
Associate Marketing Manager: Betty Jung For permission to use material from this text or product,
submit all requests online at www.cengage.com/permissions
Senior Content Project Manager: Further permissions questions can be emailed to
Colleen A. Farmer
Media Editor: Sharon Morgan
Senior Frontlist Buyer, Manufacturing: ExamView® is a registered trademark of eInstruction Corp. Windows
Kevin Kluck is a registered trademark of the Microsoft Corporation used herein
Senior Marketing Communications Manager: under license. Macintosh and Power Macintosh are registered
Sarah Greber trademarks of Apple Computer, Inc. used herein under license.
© 2008 Cengage Learning. All Rights Reserved.
Production Service: Cadmus
Senior Art Director: Michelle Kunkler
Library of Congress Control Number: 2010941871
Cover and Internal Designer: Ke Design
Cengage Learning WebTutorTM is a trademark of Cengage Learning.
Internal Illustrations: Larry Moore
Cover Image: © Chalmers Bequest, Hackney ISBN 13: 978-0-538-45306-6
Art Gallery, UK / Bridgeman Art Library ISBN 10: 0-538-45306-0
International; © marc fischer / iStockphoto
Rights Acquisitions Specialist, Photos: John Hill South-Western Cengage Learning
5191 Natorp Boulevard
Mason, OH 45040
USA
Cengage Learning products are represented in Canada by
Nelson Education, Ltd.
For your course and learning solutions, visit www.cengage.com
Purchase any of our products at your local college store or at our
preferred online store www.cengageBrain.com
Printed in the United States of America
1 2 3 4 5 6 7 14 13 12 11
, about the
author
N. Gregory Mankiw is professor of economics
at Harvard University. As a student, he studied
economics at Princeton University and MIT. As
a teacher, he has taught macroeconomics, micro-
economics, statistics, and principles of economics.
He even spent one summer long ago as a sailing
instructor on Long Beach Island.
Professor Mankiw is a prolific writer and a regu-
lar participant in academic and policy debates. His
work has been published in scholarly journals, such
as the American Economic Review, Journal of Political
Economy, and Quarterly Journal of Economics, and in
more popular forums, such as The New York Times
and The Wall Street Journal. He is also author of
the best-selling intermediate-level textbook Macroeconomics (Worth Publishers).
In addition to his teaching, research, and writing, Professor Mankiw has been a
research associate of the National Bureau of Economic Research, an adviser to the
Congressional Budget Office and the Federal Reserve Banks of Boston and New
York, and a member of the ETS test development committee for the Advanced
Placement exam in economics. From 2003 to 2005, he served as chairman of the
President’s Council of Economic Advisers.
Professor Mankiw lives in Wellesley, Massachusetts, with his wife, Deborah,
three children, Catherine, Nicholas, and Peter, and their border terrier, Tobin.
vi
