Week 15 — Macroeconomic Schools & Policy Debates

Why this matters

A nursing student watching a hospital budget, a small-business owner deciding whether to hire, and a voter weighing a plan for the national debt all meet this week's question.

In plain language

Two well-trained economists can look at the same slowdown and give you opposite advice. This week shows why. They share one toolkit, but they read it in two ways, called schools of thought (groups of economists who share a way of reading the evidence and a set of policy instincts). You will build a side-by-side table of the two main schools, learn what both accept, and compute two ratios (one number divided by another and shown as a percent) about government borrowing. Then you will argue one real policy question from both sides without picking a winner.

• Already covered: Weeks 6, 7, 11, and 12 gave you the gap, the multiplier, the deficit and debt, and the Phillips curve.
• This week: the two schools side by side, the agreed ground, and the debt and deficit ratios.
• How they connect: no new model; this week reads the old ones through two lenses.

Focus

Why do two economists give opposite advice about the same slowdown?

By the end of this module, you should be able to:

• [ ] state each school's case at full strength
• [ ] compute the deficit-to-GDP and debt-to-GDP ratios
• [ ] state the agreed ground plainly
• [ ] label every policy claim positive or normative

To-do

Plan your week

1. Read Chapter 15 (45 minutes), then the lecture and slides.
2. Work the tutorial (60–90 minutes) and practice set (20 minutes).
3. Do the Model Workshop (90 minutes), discussion, and assignment.
4. Take the quiz, then look ahead to the Final Practice Exam.

This week's checkpoint: a deficit of 50 and a debt of 1,000 on GDP of 1,250.

You've got this

Give each column its best case, and ask your instructor early.

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