Macroeconomics

2-4

Conclusion: From Economic Statistics

to Economic Models

The three statistics discussed in this chapter—gross domestic product, the con-

sumer price index, and the unemployment rate—quantify the performance of

the economy. Public and private decisionmakers use these statistics to monitor

changes in the economy and to formulate appropriate policies. Economists use

these statistics to develop and test theories about how the economy works.

In the chapters that follow, we examine some of these theories. That is, we

build models that explain how these variables are determined and how economic

policy affects them. Having learned how to measure economic performance, we

are now ready to learn how to explain it.