[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

of the economist’s approach to imperfect competition, the chapter on
strategic behavior has been moved into Part 3 (Chapter 14).
∂ Part 4, now titled Issues in Public Policy, is more closely organized around
the theme of public policy, rather than simply including a set of “topics.”
Part 4 includes chapters on the public sector (Chapter 17), environmental
policy (Chapter 18), and international trade and trade policy (Chapter 19).
Changes to the Fourth
Edition—Macroeconomics
The new edition maintains the modern approach to macroeconomics, one that recognizes
that the Federal Reserve and other central banks implement monetary policy
through interest rates rather than through the explicit control of the money supply.
By providing a more realistic treatment of monetary policy, the modern approach
also allows students to understand and discuss the types of policy actions they read
about in newspapers. While the general approach developed in the Third Edition is
maintained, our treatment of macroeconomics in the new edition aims to streamline
the presentation, moving more advanced material into the “Topics” chapters.
KEY CHANGES FOR THE FOURTH EDITION:
Important changes made to the macroeconomic sections include:
∂ The opening chapter of the macroeconomics material has been updated to
reflect new developments since the Third Edition.
∂ The discussion of price indices and the measurement of inflation are now
treated in a separate chapter (Chapter 23).
∂ Part 6, on Full-Employment Macroeconomics, has been reorganized.
Separate chapters are now devoted to government finance (Chapter 25)
and the open economy (Chapter 26). This allows these two important topics
to be treated individually, allowing instructors greater choice in deciding
how to organize their course, as well as reducing the number of new
concepts introduced in each chapter.
∂ The important material on government deficits and surpluses has been
combined in Chapter 25 rather than split between Part 6 and Part 8 as in
the previous edition.
∂ The material on money, prices, and the Federal Reserve has been moved to
the end of Part 6 (Chapter 28). This improves the flow of the full-employment
section, with Chapter 24 providing the basic framework for the determination
of real output, real wages, and the real interest rate, Chapter 25 adding the
PREFACE
∂ xxxvii