Macroeconomics

Georgetown University

Joydeep Bhattacharya 

Iowa State University

Ronald Cronovich

Carthage College

Massimiliano De Santis

Dartmouth College

John Driscoll

Federal Reserve Board

James Fackler

University of Kentucky

Chris Foote

Federal Reserve Bank of

Boston

David R. Hakes

University of Northern Iowa

Christopher House

University of Michigan

Nancy Jianakoplos

Colorado State University

George Karras

University of Illinois at Chicago

Roger Kaufman

Smith College

Manfred W.  Keil

Claremont McKenna 

College

John Leahy

New York  University

Christopher Magee

Bucknell University

Robert Martel

University of Connecticut

Meghan Millea

Mississippi State University

Robert Murphy

Boston College

John Neri

University of Maryland

Christina Peters

University of Colorado 

at Boulder

Jeffrey Reynolds

Northern Illinois University

David Romer

University of California 

at Berkeley

Brian Rosario

American River College

Naveen Sarna

Northern Virginia

Community College

Mark Siegler

California State University 

at Sacramento

---

In addition, I am grateful to Stacy Carlson, a student at Harvard, who helped

me update the data, refine my prose, and proofread the entire book.

The people at Worth Publishers have continued to be congenial and dedi-

cated. I would like to thank Catherine Woods, Senior Publisher; Craig Bleyer,

Senior Publisher; Sarah Dorger, Acquisitions Editor; Scott Guile, Senior Market-

ing Manager; Marie McHale, Senior Development Editor; Paul Shensa, Consult-

ing Editor; Tom Acox, Media and Supplements Assistant Editor; Lorraine

Klimowich, Associate Media and Supplements Editor; Steven Rigolosi, Director

of Market Research and Development; Dana Kasowitz, Project Editor; Tracey

Kuehn, Associate Managing Editor; Barbara Seixas, Production Manager; Barbara

Reingold, Art Director; Vicki Tomaselli, Design Manager; Kevin Kall, Layout

Designer; Karen Osborne, Copyeditor; Laura McGinn, Supplements Editor; and

Stacey Alexander, Supplements Manager.

Many other people made valuable contributions as well. Most important, Jane

Tufts, freelance developmental editor, worked her magic on this book once

again, confirming that she’s the best in the business. Alexandra Nickerson did a

great job preparing the index. Deborah Mankiw, my wife and in-house editor,

continued to be the first reader of new material, providing the right mix of crit-

icism and encouragement. 

Finally, I would like to thank my three children, Catherine, Nicholas, and

Peter. They helped immensely with this revision—both by providing a pleas-

ant distraction and by reminding me that textbooks are written for the next

generation.

Cambridge, Massachusetts

May 2009

Preface

| xxxi

David Spencer

Brigham Young  University

Henry S. Terrell

University of Maryland

Nora Underwood