know what kind of economics you will learn from reading this book; and
have an overview of the important macroeconomic ideas it contains.
1.1 Media Economics
Textbooks written for economics majors present economics using the language and perspective of professional economists. Students learn to analyze economic phenomena through economic models, formalized with graphs and, at advanced levels, algebra and calculus. Much time is devoted to learning how to manipulate various graphical or algebraic models that have come to serve as an intellectual framework for economists.
In one respect, it is entirely appropriate that these textbooks have this flavor because it reflects accurately what academic economists do: they build, manipulate, and estimate economic models to aid in explanation, prediction, and policy formulation. Possession of a degree in economics means one is familiar with the terminology of these models and the technical means by which they are manipulated. At the undergraduate textbook level, the technical dimension is predominantly in the form of graphical analysis, so this type of economics is accordingly referred to as curve-shifting economics. At advanced levels the technical dimension is dominated by algebraic formulas in which Greek letters play prominent roles. Hence this type of economics is sometimes called Greek-letter economics, a term introduced by Paul Krugman in the preface of his book, The Age of Diminished Expectations.
At the other end of the spectrum from curve-shifting economics is the entirely nontechnical pop-art economics found in books sold to the general public, some of which actually become best-sellers. Krugman calls this airport economics because these books are most prominently displayed at airport bookstores where business travelers are likely to buy them. They usually have some axe to grind. Most tell tales of imminent disaster, and a few advocate specific panaceas. In general these books do not teach their readers much about economics and, in any event, are not designed as textbooks.
In between these two extremes is the economics that appears in the media, most notably on the business pages of newspapers. This is media economics, which has two varieties: (1) what Krugman calls up-and-down economics news reports preoccupied with latest ups or downs of economic numbers, and (2) economic policy evaluation news commentary directed at explaining, praising, or condemning government macroeconomic policies. The main purpose of this book is to teach macroeconomic principles and how they can be used to interpret these two varieties of media economics.
