Innovation, Entrepreneurship, and the Economy in the US, China, and India

Chapter 19

General Macroeconomic Framework

Abstract

Innovation and entrepreneurship, while extremely important for long-term economic growth, are certainly not the only factors that affect the economy of a nation. A large number of other factors—monetary and fiscal policies, budget and trade deficits, inflation, unemployment, exchange rates, and a host of others—affect the economy in the near term. We, therefore, provide an overview of a general macroeconomic framework, in this chapter. In order to understand changes in the economy in the short run, one must consider a broader macroeconomic framework. This is especially important since, as the field of macroeconomics began after the Great Depression of the 1930s, it quickly evolved along two ...