23 of 27 people found the following review helpful
5.0 out of 5 stars
Clarity in Macroeconomics, 2 Jan. 2006
This is the clearest Macroeconomics book you will find. I have been studying it from drafts (as have four or five year groups previous to me it seems) for my Macroeconomics course; better than Blanchard, Mankiw, and all the rest, you will enjoy this book. The theory follows with no gaps- it is logical, yet models the real world in a way that is very satisfying compared to previous approaches. The 'assumptions' are not quite so hidden and not quite so ridiculous and previous economic theory, and little is left unexplained. It is particularly satisfying the wy they walk you through the construction of each model, all with micro-economic foundations which explicitly set out the assumptions about behaviour which drive the larger model.
It will become the classic statement of New Keynesianism, the new academic tradition in economics, which emphasises wage rigidity in the conduct of inflation-busting and monetary policy.
If you have been using the IS-LM model beware; this book signals its replacement with the 3 equation model IS-PC-MR combining changes in inflation with a reaction function for monetary policy. This book will become a standard text across universities from Oxford (where I'm studying) to LSE, Harvard and beyond. Buy it.