Macroeconomic strategy and management: pitfalls to avoid and pathways to success

Abstract

Before one can address the question of what constitutes good or bad macroeconomics, it might be useful to gain an understanding of what macroeconomics itself focuses upon. The two central questions of macroeconomic theory are:- 1. What determines the level of actual output relative to potential at any given time? This is the question of income determination. 2. What determines the path-level and the rate of growth of full employment or potential output? This is a question of growth theory.