About our authors Olivier Blanchard. Senior fellow and former C. Fred Bergsten Senior Fellow at the Peterson Institute for International Economics, is the Robert M. Solow Professor of Economics emeritus at the Massachusetts Institute of Technology (MIT). A citizen of France, Blanchard has spent most of his professional life in the United States. After obtaining his PhD in economics from MIT in 1977, he taught at Harvard University and returned to MIT in 1982. He was chair of the economics department from 1998 to 2003. In 2008, he took a leave of absence to serve as economic counsellor and director of the research department at the International Monetary Fund where he stayed until 2015. He then joined the Peterson Institute.Blanchard has worked on a wide set of macroeconomic issues, including the role of monetary and fiscal policy, speculative bubbles, the labor market and determinants of unemployment, economic transition in former communist countries, and the nature of the Global Financial Crisis. In the process, he has worked with numerous countries and international organizations.Blanchard is the author of many books and articles, including 2 textbooks on macroeconomics, 1 at the graduate level with Stanley Fischer and the other at the undergraduate level. He is a past editor of the Quarterly Journal of Economics and the NBER Macroeconomics Annual and founding editor of American Economic Journal: Macroeconomics. He is a fellow and former Council member of the Econometric Society, a past president of the American Economic Association, and a member of the American Academy of Arts and Sciences.Alessia Amighini. Alessia Amighini is associate professor of economics at Università del Piemonte Orientale in Novara and adjoint professor of international economics at the Catholic university in Milan and co-Head of the Asia Centre and Senior Research Fellow at ISPI. After graduating from Bocconi University, she received a PhD in development economics from the University of Florence and then worked as an economist at UNCTAD in Geneva.Francesco Giavazzi. Francesco Giavazzi senior is professor of economics at Bocconi University in Milan and for 10 years has been a visiting professor at the Massachusetts Institute of Technology where he has often taught the basic macroeconomics course for undergraduates. After studying electrical engineering in Milan, he received a PhD in economics at MIT in 1978. He then taught at the University of Essex (UK) and since 1983 in Italy, first at the University of Venice, then at the University of Bologna and later at Bocconi. His research has focused on fiscal policy, exchange rates and the creation of the European Economic and Monetary Union (EMU). His books include Limiting Exchange Rate Flexibility: The European Monetary System with Alberto Giovannini and The Future of Europe: Reform or Decline with Alberto Alesina, both published by MIT Press. In 2019, jointly with the late Alberto Alesina and his Bocconi colleague Carlo Favero, he published Austerity: When It Works and When It Doesn’t for Princeton University Press. He has been editor of the European Economic Review for a decade and the director general at the Italian Treasury during the 1992 exchange rate crisis and the preparations for Italy’s entry into EMU. He divides his life between Milan and Cambridge (Mass.) although his best days are spent skiing and hiking in the Dolomites and rowing along the canals in Venice.

• PART I: INTRODUCTION 1. A Tour of the World 2. A Tour of the BookPART II: THE SHORT RUN 3. The Goods Market 4. Financial Markets I 5. Goods and Financial Markets; The IS-LM Model 6. Financial Markets II PART III: THE MEDIUM RUN 7. The Labor Market 8. The Phillips Curve, the Natural Rate of Unemployment, and Inflation 9. Putting All Markets Together: From the Short to the Medium RunPART IV: THE LONG RUN 10. The Facts of Growth 11. Saving, Capital Accumulation, and Output 12. Technological Progress and Growth 13. The Challenges of Growth EXTENSIONSPART V: EXPECTATIONS 14. Financial Markets and Expectations 15. Expectations, Consumption, and Investment 16. Expectations, Output, and PolicyPART VI: THE OPEN ECONOMY 17. Openness in Goods and Financial Markets 18. The Goods Market in an Open Economy 19. Output, the Interest Rate, and the Exchange Rate 20. Exchange Rate RegimesPART VII: BACK TO POLICY 21. Should Policy Makers Be Restrained? 22. Fiscal Policy: A Summing Up 23. Monetary Policy: A Summing Up 24. Epilogue: The Story of Macroeconomics

About our authors Olivier Blanchard. Senior fellow and former C. Fred Bergsten Senior Fellow at the Peterson Institute for International Economics, is the Robert M. Solow Professor of Economics emeritus at the Massachusetts Institute of Technology (MIT). A citizen of France, Blanchard has spent most of his professional life in the United States. After obtaining his PhD in economics from MIT in 1977, he taught at Harvard University and returned to MIT in 1982. He was chair of the economics department from 1998 to 2003. In 2008, he took a leave of absence to serve as economic counsellor and director of the research department at the International Monetary Fund where he stayed until 2015. He then joined the Peterson Institute.Blanchard has worked on a wide set of macroeconomic issues, including the role of monetary and fiscal policy, speculative bubbles, the labor market and determinants of unemployment, economic transition in former communist countries, and the nature of the Global Financial Crisis. In the process, he has worked with numerous countries and international organizations.Blanchard is the author of many books and articles, including 2 textbooks on macroeconomics, 1 at the graduate level with Stanley Fischer and the other at the undergraduate level. He is a past editor of the Quarterly Journal of Economics and the NBER Macroeconomics Annual and founding editor of American Economic Journal: Macroeconomics. He is a fellow and former Council member of the Econometric Society, a past president of the American Economic Association, and a member of the American Academy of Arts and Sciences.Alessia Amighini. Alessia Amighini is associate professor of economics at Università del Piemonte Orientale in Novara and adjoint professor of international economics at the Catholic university in Milan and co-Head of the Asia Centre and Senior Research Fellow at ISPI. After graduating from Bocconi University, she received a PhD in development economics from the University of Florence and then worked as an economist at UNCTAD in Geneva.Francesco Giavazzi. Francesco Giavazzi senior is professor of economics at Bocconi University in Milan and for 10 years has been a visiting professor at the Massachusetts Institute of Technology where he has often taught the basic macroeconomics course for undergraduates. After studying electrical engineering in Milan, he received a PhD in economics at MIT in 1978. He then taught at the University of Essex (UK) and since 1983 in Italy, first at the University of Venice, then at the University of Bologna and later at Bocconi. His research has focused on fiscal policy, exchange rates and the creation of the European Economic and Monetary Union (EMU). His books include Limiting Exchange Rate Flexibility: The European Monetary System with Alberto Giovannini and The Future of Europe: Reform or Decline with Alberto Alesina, both published by MIT Press. In 2019, jointly with the late Alberto Alesina and his Bocconi colleague Carlo Favero, he published Austerity: When It Works and When It Doesn’t for Princeton University Press. He has been editor of the European Economic Review for a decade and the director general at the Italian Treasury during the 1992 exchange rate crisis and the preparations for Italy’s entry into EMU. He divides his life between Milan and Cambridge (Mass.) although his best days are spent skiing and hiking in the Dolomites and rowing along the canals in Venice.

• PART I: INTRODUCTION 1. A Tour of the World 2. A Tour of the BookPART II: THE SHORT RUN 3. The Goods Market 4. Financial Markets I 5. Goods and Financial Markets; The IS-LM Model 6. Financial Markets II PART III: THE MEDIUM RUN 7. The Labor Market 8. The Phillips Curve, the Natural Rate of Unemployment, and Inflation 9. Putting All Markets Together: From the Short to the Medium RunPART IV: THE LONG RUN 10. The Facts of Growth 11. Saving, Capital Accumulation, and Output 12. Technological Progress and Growth 13. The Challenges of Growth EXTENSIONSPART V: EXPECTATIONS 14. Financial Markets and Expectations 15. Expectations, Consumption, and Investment 16. Expectations, Output, and PolicyPART VI: THE OPEN ECONOMY 17. Openness in Goods and Financial Markets 18. The Goods Market in an Open Economy 19. Output, the Interest Rate, and the Exchange Rate 20. Exchange Rate RegimesPART VII: BACK TO POLICY 21. Should Policy Makers Be Restrained? 22. Fiscal Policy: A Summing Up 23. Monetary Policy: A Summing Up 24. Epilogue: The Story of Macroeconomics

About our authors Olivier Blanchard. Senior fellow and former C. Fred Bergsten Senior Fellow at the Peterson Institute for International Economics, is the Robert M. Solow Professor of Economics emeritus at the Massachusetts Institute of Technology (MIT). A citizen of France, Blanchard has spent most of his professional life in the United States. After obtaining his PhD in economics from MIT in 1977, he taught at Harvard University and returned to MIT in 1982. He was chair of the economics department from 1998 to 2003. In 2008, he took a leave of absence to serve as economic counsellor and director of the research department at the International Monetary Fund where he stayed until 2015. He then joined the Peterson Institute.Blanchard has worked on a wide set of macroeconomic issues, including the role of monetary and fiscal policy, speculative bubbles, the labor market and determinants of unemployment, economic transition in former communist countries, and the nature of the Global Financial Crisis. In the process, he has worked with numerous countries and international organizations.Blanchard is the author of many books and articles, including 2 textbooks on macroeconomics, 1 at the graduate level with Stanley Fischer and the other at the undergraduate level. He is a past editor of the Quarterly Journal of Economics and the NBER Macroeconomics Annual and founding editor of American Economic Journal: Macroeconomics. He is a fellow and former Council member of the Econometric Society, a past president of the American Economic Association, and a member of the American Academy of Arts and Sciences.Alessia Amighini. Alessia Amighini is associate professor of economics at Università del Piemonte Orientale in Novara and adjoint professor of international economics at the Catholic university in Milan and co-Head of the Asia Centre and Senior Research Fellow at ISPI. After graduating from Bocconi University, she received a PhD in development economics from the University of Florence and then worked as an economist at UNCTAD in Geneva.Francesco Giavazzi. Francesco Giavazzi senior is professor of economics at Bocconi University in Milan and for 10 years has been a visiting professor at the Massachusetts Institute of Technology where he has often taught the basic macroeconomics course for undergraduates. After studying electrical engineering in Milan, he received a PhD in economics at MIT in 1978. He then taught at the University of Essex (UK) and since 1983 in Italy, first at the University of Venice, then at the University of Bologna and later at Bocconi. His research has focused on fiscal policy, exchange rates and the creation of the European Economic and Monetary Union (EMU). His books include Limiting Exchange Rate Flexibility: The European Monetary System with Alberto Giovannini and The Future of Europe: Reform or Decline with Alberto Alesina, both published by MIT Press. In 2019, jointly with the late Alberto Alesina and his Bocconi colleague Carlo Favero, he published Austerity: When It Works and When It Doesn’t for Princeton University Press. He has been editor of the European Economic Review for a decade and the director general at the Italian Treasury during the 1992 exchange rate crisis and the preparations for Italy’s entry into EMU. He divides his life between Milan and Cambridge (Mass.) although his best days are spent skiing and hiking in the Dolomites and rowing along the canals in Venice.

• PART I: INTRODUCTION 1. A Tour of the World 2. A Tour of the BookPART II: THE SHORT RUN 3. The Goods Market 4. Financial Markets I 5. Goods and Financial Markets; The IS-LM Model 6. Financial Markets II PART III: THE MEDIUM RUN 7. The Labor Market 8. The Phillips Curve, the Natural Rate of Unemployment, and Inflation 9. Putting All Markets Together: From the Short to the Medium RunPART IV: THE LONG RUN 10. The Facts of Growth 11. Saving, Capital Accumulation, and Output 12. Technological Progress and Growth 13. The Challenges of Growth EXTENSIONSPART V: EXPECTATIONS 14. Financial Markets and Expectations 15. Expectations, Consumption, and Investment 16. Expectations, Output, and PolicyPART VI: THE OPEN ECONOMY 17. Openness in Goods and Financial Markets 18. The Goods Market in an Open Economy 19. Output, the Interest Rate, and the Exchange Rate 20. Exchange Rate RegimesPART VII: BACK TO POLICY 21. Should Policy Makers Be Restrained? 22. Fiscal Policy: A Summing Up 23. Monetary Policy: A Summing Up 24. Epilogue: The Story of Macroeconomics