This intermediate level textbook concentrates on new macroeconomic analysis and is one of the first to focus on labour markets. The book provides access both to the important applied work on unemployment, inflation and external balances and to the journal literature where the theory has been developed. It makes available for the first time for undergraduates and non-specialists, current literature on major questions of economic policy and performance, especially in Western Europe. The authors present a neo-Keynesian treatment of macroeconomics. Its key characteristic is the use of wage bargaining and price-setting under imperfect competition, making product and labour market assumptions closer to the real world. These features are fully integrated in both closed and open economy analysis.
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