Aggregate economics and public policy

This is a book about aggregate economic activity in ad vanced economic societies. Aggregate economics, or macroeconomics, takes the whole of an economy for its unit of study. It measures the per formance of an economy by the economy's ability to sustain high levels of output without significant lapses into depression or inflation and by its ability to produce a growth in output which keeps pace with, and even exceeds, the growth in population. The goal of study in macroeconomics is the enhancement of material welfare through the elimination of eco nomic instability and the promotion of economic growth.

Macroeconomics is distinguished from the other main branch of eco nomics, microeconomics, both by the unit and the goal of study. Micro economics concentrates upon the "elements" of economic activity, the firm and the consumer. While some aggregation is involved when indus tries and markets are studied, the goal of microeconomics is to discover how, given the level of total output in the economy, resources are allo cated among various individual outputs, how prices of individual goods are formed, how decisions are made respecting the use of various pro ductive techniques, and how the proceeds of economic activity are di vided among the participants in the production processes. The goal of this branch of economics is the improvement of material welfare through the more efficient use of already existing resources.