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, 2018, pp 145-216 from Springer

Abstract: Abstract Macroeconomics deals, inter alia, with the problems of unemployment, of price instability and of stagnation (or even underdevelopment). It is argued in Sect. 9.1 that for environmental studies the problem of stagnation and the corresponding goal of economic growth are of main interest, while unemployment and price instability are to a lesser extent. Hence, Sect. 9.2 focuses on basic concepts and models of growth theory. It is demonstrated that the growth of a country’s flow of income is based on this country’s stock of wealth. Any growth in the flow of income requires investments in the productive stocks available. In neoclassical growth theory, the feasibility of unbounded growth via investment activities is postulated. For practical purposes, the abstract notion of «economic growth» has to be operationalised. The most common indicator of economic growth is the real gross domestic product (GDPr). Therefore, in Sect. 9.3 it is outlined how the GDPr is computed within the United Nations’ System of National Accounts (SNA). Furthermore, the procedure used in the SNA to account for the stock of national wealth is sketched.

Date: 2018
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DOI: 10.1007/978-3-662-54828-8_9

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