Macroeconomics, Second Edition

Macroeconomics, Second Edition

An Integrated Approach

By Alan J. Auerbach and Laurence J. Kotlikoff





Many undergraduate texts treat macroeconomics as a set of distinct topics rather than as a unified body of theory and empirical findings. In contrast, this text by Alan Auerbach and Laurence Kotlikoff uses a single analytic framework—the two-period life-cycle model—to explore and connect each of the major issues in contemporary macroeconomics. The model describes the evolution of the economy over time in terms of the behavior of overlapping generations of individuals, each of whom lives for two periods: youth and old age. This versatile framework can encompass most macroeconomic schools of thought through the alteration of key assumptions. The use of one basic model also allows the authors to explore important topics not always addressed adequately in other texts; these include credit constraints, real business cycles, generational accounting, and international capital flows markets.

Written in a clear, accessible style, this shortened and simplified second edition provides a systematic way to interpret macroeconomic outcomes, to understand various policy proposals, and to appreciate how individuals and firms fit into the big picture.

Instructor Resources

Downloadable instructor resources available for this title: instructor's manual


Out of Print ISBN: 9780262011709 494 pp. | 8 in x 9 in


$65.00 X ISBN: 9780262511032 494 pp. | 8 in x 9 in


  • Auerbach and Kotlikoff tackle the most difficult (though necessary) aspect of teaching macro at the intermediate level, general equilibrium analysis, with an easy dexterity. Their book exhibits the rigor required of modern macroeconomic analysis, covers the most pressing issues of macro policy, and does both with clarity and grace. It's an excellent book.

    Benjamin Russo

    University of North Carolina

  • Auerbach and Kotlikoff put first things first in Macroeconomics highlighting long-term growth in output, productivity, and labor and captial input. They integrate a superb treatment of life-cycle consumption and saving into the neoclassical model of long-term growth.

    Robert King

    University of Virginia

  • As one would expect, Auerbach and Kotlikoff offers a comprehensive, innovative, and logically consistent synthesis of the major questions of macroeconomics. Particularly impressive is their attention to the long-run determines of saving and growth in open as well as closed economies.

    Maurice Obstefeld

    University of California