Macroeconomics

A study of the entire economy in terms of the total amount of goods and services produced, total income earned, the level of employment of productive resources, and the general behaviour of prices.

Until the 1930s most economic analysis concentrated on individual firms and industries. With the Great Depression of the 1930s, however, and the development of the concept of national income and product statistics, the field of Macroeconomics began to expand. The policy goals of the discipline include economic growth, price stability, full employment and the attainment of a favourable balance of payments.

One of the great challenges of recent economics has been struggles to reconcile macroeconomic and microeconomic models. Rational Expectations Theorists such as Robert Lucas suggested (in the 1970s) that at least some traditional Keynesian macroeconomic models were questionable in light of what they must implicitly assume about individual behavior.