Venturing into Macroeconomics

• We dipped our toes into macroeconomics

  • Starting with sectoral balances

  • Cautioned you against attaching moral connotations to terms like "debt" or "deficit"

• 3 little models of economy

  • 2-person economy

  • 2-sector economy

    • Government sector

    • Non-government sector

  • 3-sector economy

    • Government sector

    • Domestic private sector

    • Foreign sector ("Rest of World")