Macroeconomics, how many economic phenomena can be understood through macroeconomics?

 

 

This article is a translation of the below linked content authored by Professor Seo from the Department of Economics at Inha University.

 

How many economic phenomena can be understood through macroeconomics?

 

Microeconomics has evolved beyond merely empirically summarizing past relationships among macro variables to elucidating how individual economic agents make decisions and how these decisions are reflected in macro variables. However, due to computational difficulties, there is a trade-off between whether to include more economic phenomena in the model or focus on heterogeneity among economic entities. However, recent developments in computer parallel computing technology have made it possible to design and calculate models of heterogeneous economic entities more complexly, giving hope that trade-offs can be reduced. However, due to computational difficulties, there is a trade-off between whether to include more economic phenomena in the model or focus on heterogeneity among economic agents. However, recent developments in computer parallel computing technology have made it possible to design and calculate models of heterogeneous economic entities more complexly, giving hope that trade-offs can be reduced.

 

Macroeconomics is the study of analyzing the dynamics of macro variables. Macro variables refer to commonly discussed economic indicators such as GDP, inflation, interest rates, and unemployment rates. The model of macroeconomics depicts the relationship among economic variables by structuring them in a way that facilitates comprehension. The uses of macroeconomic models are broadly divided into two categories. First, it can forecast forthcoming movements of macro variables by leveraging the model. Second, the model can be used to evaluate the effects of government economic policies and predict future policy effects.