Includes bibliographical references and index.

1 THE LONG RUN. Production, Prices and the Distribution of Income -- Interest Rates and Investment -- Consumption and the Natural Rate of Interest -- Capital Accumulation and Growth -- Wage-Setting and Unemployment -- Money and Inflation in the Long Run -- 2 THE SHORT RUN. The Interest Rate and Production in the Short Run -- Economic Activity and Inflation in the Short Run -- 3 ECONOMIC POLICY. Monetary -- Policy Fiscal Policy -- 4 THE OPEN ECONOMY. Exports, Imports, and International Financial Markets -- The Open Economy in the Long Run -- The Open Economy in the Short Run -- Exchange Rate Systems and Monetary Union -- 5 BUSINESS CYCLES, POLICYMAKING, FINANCIAL MARKETS. Business Cycles -- Institutions and Economic Policy -- Financial Markets.

Written in a clear and direct style, this is the ideal core textbook for students who seek a thorough understanding of the applications of macroeconomic theory. The book combines theoretical rigour with numerous illustrative examples and engaging policy discussions. This highly-respected author has developed an innovative new approach to teaching macroeconomics, based on combining microeconomic foundations with Keynesian-style short-run policy analysis to build one unified model. Gottfries' critically-acclaimed and highly relevant approach reinforces learning and makes it easier for students to comprehend, providing the ideal preparation either for work or for further postgraduate study.