Historical Perspective And Evolution Of Macroeconomy

Historical perspective and evolution of macroeconomy

To detail what macroeconomy is, we must first take into account that this is born from the economy and therefore has a great relationship with this. «Macroeconomy is a branch of economic theory that studies the behavior of the economy as a whole. For this reason, his birth coincides with that of economic science itself. But, in addition, macroeconomy incorporates as part of its object of study the analysis of the effects of government policies on variables: production, level of employment, inflation, commercial deficit, etc.»(Jiménez, 1999). With the study of macroeconomics we can reflect the economic growth of a country, nation or municipality, also, we can denote inflation, through this we see the growth that the prices of the goods and services offered by a country for a timedetermined that can normally be one year. With the help of macroeconomics we can also identify employment and unemployment, which is why it is inevitable to implement all the tools that this science allows us.

With these three cases we can see how efficient it is to know the macroeconomy and everything that can help us to know how to make a decision in the face of any situation that comes to us. Macroeconomy is born and known thanks to the contributions of Petty, Cantillón and Hum as well as the contributions of macroeconomic classic authors. The evolution of macroeconomy will be described below through the contributions of the previous authors.

Evolution of macroeconomy

1. (1936) The birth of the so -called modern macroeconomy is identified with the date of publication, 1936, of the general theory of occupation, interest and money of J. M. Keynes.
2. (1920) In general, the 1920s mean prosperous years for the economy. Almost all who wanted employment could achieve it, income increased substantially and prices were stable.
3. (1929) As of this year things began to get worse. In 1929, there was 1.5 million unemployed is only USA, an alarming figure after in the decade of the 20s the majority had employment.

• The United States produced new goods and services for $ 103 billion.
• Birth of ‘Great Depression’ in the US, which would extend to Europe and beyond, causing great suffering in the world.
• In the United States, the amount of suicides increased almost 30%, and millions of families fell into poverty.
• Before the great depression, economists used to apply microeconomic models, sometimes called ‘classic models’ to the problems that affected the economy. (In fact, the word ‘macroeconomy” was invented after World War II.)
• The birth of a new phenomenon called stagnation with inflation was witnessed. Inflation stagnation occurs when the general price level rises rapidly (inflation) in periods of recession or a lot of unemployment (stagnation).
• Much of the macroeconomy has deep roots in Keynes’s work. According to Keynes, prices and salaries are not those that determine the level of employment, as the classic models had suggested, but rather the added level of the demand for goods and services. Keynes also believed that governments could intervene in the economy and affect the level of product and employment. According to Keynes, the role of government in periods of little private demand is to stimulate aggregate demand and, in doing so, get the economy from the recession.

Modern macroeconomy has emphasized a lot about the importance that the population has to prepare to be more productive, taking care of their health, taking care of their health, trying to improve their physical, intellectual or emotional abilities. Understand how all these adaptations affect the whole economy helps us understand how we can adapt us. (BBVA, 2016)

As we can see in the above proposed by the authors, we notice that macroeconomy went through different stages of which the most impact was the so -called "great depression" This crisis is mainly presented by subconsumption and sub -investment which reflects an artificial economy. This serves us as consumers and investor, since if we implement macroeconomy in our daily lives when making a purchase it is important to look where it will have a greater impact of improvement or determination.

Macroeconomics study field 

The study of macroeconomy is very wide, but among the most important we have:

• Economic growth: This is reflected in the medium plane or long term, it is important because it allows us to see the ancestry that a country has. In the short term, macroeconomics shows us the factors where the economy can have crisis or fertilizer times. And in the long term that factors help growth and what changes would bring this growth.
• Productivity: within this we also find what technology is. With productivity we find to a large extent what is the production capacity of the country’s companies that make the economy grow through their goods or services.
• Economic cycles: here the high and low that countries are going through in this one we find GDP.
• Unemployment: unemployment is a consequence that produced the crisis presented during the evolution and history of macroeconomics. Unemployment occurs mainly due to lack of preparation, old age in the population or even the lack of job offer. This factor, although very common among the different countries they take an important role in the country’s economy, is for them that the production capacity to have a good manufacturing rate must be improved but also a population acts and trained to work and doGrow the country’s economy.
• Standing, inflation or deflation: in stagflation the void growth of prices is reflected, in inflation the growth of the goods and service offered by a country and in deflation the decrease that they have had.

To conclude we highlight the importance of macroeconomy in terms of economy and currency management in that country by reflecting the causes, consequences or failing of benefits that help the growth of this.

Bibliography

• BBVA. (16 of 08 of 2016). Obtained from https: // www.BBVA.com/es/Ver-la-Macroeconomia-Nuestra-Vida-Diaria/
• Carrillo, c. (03 of 2016). Prezi. Obtained from https: // prezi.com/s8tv-q1la0vp/history-of-macroeconomia/
• Jiménez, f. (October 1999). Obtained from https: // core.AC.UK/Download/PDF/6238679.PDF