MACROECONOMICS
Fifth Edition
Charles I. Jones
Stanford University, Graduate School of Business
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Cyan, Magenta, Yellow, Black
, To Te r r y ; fo r Au d r e y a n d C h a rli e
W. W. Norton & Company has been independent since its founding in 1923, when William Warder
Norton and Mary D. Herter Norton first published lectures delivered at the People’s Institute, the adult
education division of New York City’s Cooper Union. The firm soon expanded its program beyond
the Institute, publishing books by celebrated academics from America and abroad. By mid-century,
the two major pillars of Norton’s publishing program—trade books and college texts—were firmly
established. In the 1950s, the Norton family transferred control of the company to its employees, and
today—with a staff of five hundred and hundreds of trade, college, and professional titles published
each year—W. W. Norton & Company stands as the largest and oldest publishing house owned wholly
by its employees.
Copyright © 2021, 2018, 2014, 2011, 2010, 2008 by W. W. Norton & Company, Inc.
All rights reserved
Printed in Canada
Editor: Eric Svendsen
Editorial Assistant: Jeannine Hennawi, Ebby Bowles
Project Editor: Layne Broadwater
Production Manager: Ashley Horna
Managing Editor, College Digital Media: Kim Yi
Media Project Editor: Rachel Mayer
Media Editor: Miryam Chandler
Associate Media Editor: Victoria Reuter
Media Editorial Assistant: Christina Fuery
Marketing Manager, Economics: Janise Turso
Art Director: Rubina Yeh
Designer: Lissi Sigillo
Composition: Graphic World, Inc.
Manufacturing: Transcontinental Interglobe, Inc.
W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110
wwnorton.com
W. W. Norton & Company Ltd., 15 Carlisle Street, London W1D 3BS
1234567890
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, BRIEF CONTENTS
PART 1 PRELIMINARIES
1 Introduction to Macroeconomics 4
2 Measuring the Macroeconomy 18
PART 2 THE LONG RUN
3 An Overview of Long-Run Economic Growth 44
4 A Model of Production 70
5 The Solow Growth Model 102
6 Growth and Ideas 137
7 The Labor Market, Wages, and Unemployment 179
8 Inflation 211
PART 3 THE SHORT RUN
9 An Introduction to the Short Run 242
10 The Great Recession: A First Look 263
11 The IS Curve 286
12 Monetary Policy and the Phillips Curve 317
13 Stabilization Policy and the AS/AD Framework 355
14 The Great Recession and the Short-Run Model 393
15 DSGE Models: The Frontier of Business Cycle Research 427
PART 4 APPLICATIONS AND MICROFOUNDATIONS
16 Consumption 460
17 Investment 482
18 The Government and the Macroeconomy 508
19 International Trade 532
20 Exchange Rates and International Finance 559
21 Parting Thoughts 595
iii
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Fifth Edition
Charles I. Jones
Stanford University, Graduate School of Business
95108_INB rTXT Nov-25-2019 mikeb FOLIO SEQUENCE
MACRO5_ptr_ch00_fm_i-1.indd 1PAGE:95108_TXT_r001.p1.pdf I 1 20/11/19 9:28 AM
Cyan, Magenta, Yellow, Black
, To Te r r y ; fo r Au d r e y a n d C h a rli e
W. W. Norton & Company has been independent since its founding in 1923, when William Warder
Norton and Mary D. Herter Norton first published lectures delivered at the People’s Institute, the adult
education division of New York City’s Cooper Union. The firm soon expanded its program beyond
the Institute, publishing books by celebrated academics from America and abroad. By mid-century,
the two major pillars of Norton’s publishing program—trade books and college texts—were firmly
established. In the 1950s, the Norton family transferred control of the company to its employees, and
today—with a staff of five hundred and hundreds of trade, college, and professional titles published
each year—W. W. Norton & Company stands as the largest and oldest publishing house owned wholly
by its employees.
Copyright © 2021, 2018, 2014, 2011, 2010, 2008 by W. W. Norton & Company, Inc.
All rights reserved
Printed in Canada
Editor: Eric Svendsen
Editorial Assistant: Jeannine Hennawi, Ebby Bowles
Project Editor: Layne Broadwater
Production Manager: Ashley Horna
Managing Editor, College Digital Media: Kim Yi
Media Project Editor: Rachel Mayer
Media Editor: Miryam Chandler
Associate Media Editor: Victoria Reuter
Media Editorial Assistant: Christina Fuery
Marketing Manager, Economics: Janise Turso
Art Director: Rubina Yeh
Designer: Lissi Sigillo
Composition: Graphic World, Inc.
Manufacturing: Transcontinental Interglobe, Inc.
W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, NY 10110
wwnorton.com
W. W. Norton & Company Ltd., 15 Carlisle Street, London W1D 3BS
1234567890
95108_INB rTXT Nov-25-2019 mikeb FOLIO SEQUENCE
95108_TXT_r002.p1.pdf
MACRO5_ptr_ch00_fm_i-1.indd 2PAGE: II 2 20/11/19 9:28
Black
, BRIEF CONTENTS
PART 1 PRELIMINARIES
1 Introduction to Macroeconomics 4
2 Measuring the Macroeconomy 18
PART 2 THE LONG RUN
3 An Overview of Long-Run Economic Growth 44
4 A Model of Production 70
5 The Solow Growth Model 102
6 Growth and Ideas 137
7 The Labor Market, Wages, and Unemployment 179
8 Inflation 211
PART 3 THE SHORT RUN
9 An Introduction to the Short Run 242
10 The Great Recession: A First Look 263
11 The IS Curve 286
12 Monetary Policy and the Phillips Curve 317
13 Stabilization Policy and the AS/AD Framework 355
14 The Great Recession and the Short-Run Model 393
15 DSGE Models: The Frontier of Business Cycle Research 427
PART 4 APPLICATIONS AND MICROFOUNDATIONS
16 Consumption 460
17 Investment 482
18 The Government and the Macroeconomy 508
19 International Trade 532
20 Exchange Rates and International Finance 559
21 Parting Thoughts 595
iii
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, 95108_INB rTXT Nov-25-2019 mikeb FOLIO SEQUENCE
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