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

government, Chapter 26 extending the results to the case of the open
economy, and Chapter 27 providing a discussion of economic growth. The
material on money and prices then follows in Chapter 28.
∂ Part 7 on Macroeconomic Fluctuations has been extensively rewritten to
improve the exposition. Many users of the Third Edition felt that too much
material was introduced in the chapters on the aggregate demand–inflation
relationship and the short-run inflation adjustment relationship. To address
this concern, we have moved the extended discussion of inflation and
unemployment into Part 9 (Further Topics in Macroeconomics). Part 7
begins with an overview (Chapter 29), covers the basics of aggregate
expenditures (Chapter 30), and then develops the aggregate
demand–inflation relationship in Chapter 31.
∂ The material on the international economy has been consolidated into a
new Part 8, with chapters dealing with the international financial system
(Chapter 34), policy in the open economy (Chapter 35), and economic
development and transition (Chapter 36).
In making these changes, we have continued to be motivated by the desire to write
a modern, student-friendly textbook that reflects the way economists approach their
subject today.
The Organization of the Text
The text is organized to work for both students and instructors. For students, we utilize
the five core concepts of trade-offs, incentives, exchange, information, and distribution
throughout the text, in both the chapters on microeconomics and those on
macroeconomics. These concepts anchor the wide range of topics we cover, linking
all the topics to a core set of basic principles to which students can always refer. We also
provide a firm grounding in basic concepts first, but we do not stop there. We also
ensure that students are able to understand the tremendous insights offered by the
basic economic model of competitive markets and its limitations. This prepares the
student for understanding the lessons offered by modern economics for study of imperfect
competition, information, growth, and economic fluctuations. We show how these
insights help one understand economic phenomena that classical economics cannot.
By exposing students to modern economics—from the economics of information and
innovation to behavioral economics—the text helps them obtain a sense of the richness
of the discipline and its value for understanding the world around them.
The text is designed to offer solid coverage of traditional topics, combined with a
flexible structure that allows it to be tailored to fit with the individual needs of the
instructor. In covering both microeconomics and macroeconomics, the basic material
of competitive markets and the full-employment economy are presented first.
Then, the sections dealing with imperfect markets and fluctuations each begin with
an overview chapter that allows students to gain insight into the basic institutions
and key issues that are addressed in more detail in subsequent chapters. This strucxxxviii
∂ PREFACE