Fundamental Concepts of Macroeconomics

Alfred Endres () and Volker Radke ()
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Alfred Endres: University of Hagen
Volker Radke: State University Ravensburg

Chapter 9 in Economics for Environmental Studies, 2012, pp 125-137 from Springer

Abstract: Abstract While microeconomics is interested in the behaviour of single economic agents and their coordination, macroeconomics is not in the first place. In macroeconomics, similar economic agents are aggregated to sectors and different goods are aggregated to index numbers like Gross Domestic Product. The reason for this is that macroeconomics deals with problems different from those of microeconomics. Firstly, economic growth is defined as an increase in real Gross Domestic Product over time. As a prerequisite for economic growth, an increase in an economy’s productive capacity is identified. Any growth in productive capacity requires investments in the productive stocks available. In neoclassical growth theory, the feasibility of unbounded growth is postulated. Secondly, the various purposes of national accounting are outlined. Based on the United Nations‘System of National Accounts (SNA), real Gross Domestic Product as a central flow concept of national accounting is defined. The procedure used in the SNA to account for the stock of national wealth is sketched.

Keywords: Gross Domestic Product; Productive Capacity; National Account; Real Gross Domestic Product; Productive Asset (search for similar items in EconPapers)
Date: 2012
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DOI: 10.1007/978-3-642-31193-2_9

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