Macroeconomics is the study of economy wide economic outcomes, notably unemployment, inflation and economic growth. These outcomes have an important impact on the general level of economic well-being. High unemployment causes losses of income and, especially for the long-term unemployed, a loss of self-esteem and social integration. High inflation causes general uncertainty about economic transactions. Growth in labour productivity, an important contributor to economic growth, is the ultimate cause of the secular increase in living standards. Low productivity growth slows down the growth of living standards and thus slows down the improvement in economic well-being.
In macroeconomics an emphasis is placed on how government policy can alter economic outcomes. Fiscal and monetary policies are the most important of these. These policies can affect the level of activity and thus the outcomes for unemployment and inflation. Government policies can also affect national saving, through the government budget balance and the balance of payments. National saving is a measure of how society is dividing its output between current consumption and expenditures that will enhance consumption in the future. Achieving an appropriate division is a major objective of macroeconomic policy.
Through the analysis of the balance of payments, macroeconomics analyses the determination of exchange rates, international trade and international capital flows.
Macroeconomics is an important area for students interested in further study in economics, in study in any area of the social science and as a preparation for employment in business or government.
The Department of Economics offers core subjects in macroeconomics which can be found here.