macroeconomicsinthecontextofactualeventsandwithemphasisontherelati- shipsbetweenmacroeconomictheoryandpolicy. Students of economics, professional economists, and the interested public are the target audience. The book can be used as the main text or a supplement in advancedundergraduateandbeginninggraduatecoursesinmacroeconomics. P- fessionaleconomistsmay?nditausefulreference. Thebookisnotintendedfor vii viii Contents readerswithnobackgroundineconomics. Butanyonewhoisreadytoexpendthe effortandisnotputoffbyoccasionalequationscouldbene?tfromreadingit. IwouldliketothankSpringer-VerlageditorsBarbaraFessandChristianeBeisel for their help, support, and understanding during the writing of this book. I also wouldliketothankAnnaDittrichofSpringer-VerlagandSaranyaBaskarandher colleagues at Integra for their excellent work in producing the book. Colleagues, friends, and students helped with their comments and questions. In particular I would like to thank Neil Alper, Oscar Brookins, William Dickens, Tess Forsell, AmaritaNattwhoreadallorlargepartsofthebookandmadeextensivesuggestions andcorrections. MythanksalsogoestoAndrewSumandMariaLuengo-Pradowho madeusefulcomments. StudentsinmygraduatemacroeconomicsclassYuanGao (Highfar),EmilyHalle, YelenaKuznetsov, AliciaParillo,andBrianSiebendetected errorsandmadesuggestionsforimprovement.