Question

Write short notes on

3) Historical review of Macro-Economics

Answer 1

3) The macroeconomic approach to economics has been in existence since the earlier time, though its use in economic analysis is modern and recent. In the past, macroeconomics did not exist as a separate branch of economic analysis but this approach prevailed even before the evolution of microeconomics.

Evidence is available that, even in the 16^th and the 17^th century, policies of the government were based on the macro approach. In the 18^th century, physiocrats tried to analyse the concept of national income and wealth. Several classical economists, such as Adam Smith, Prof. Ricardio, J.S.Mill etc. also discussed the determination of national income and wealth.

In 1936, John M. Keynes published his famous book “General theory of employment, interest and money”. He used the macroeconomic approach to solve economic problems. After the publication of this book, macroeconomics became important and popular to economic analysis.