What’s New in the Third Edition?

1. Strong coverage of economic growth is enhanced by a discussion of growth and geography (Chapter 7).

2. We have made our presentations of the aggregate demand and aggregate supply model, as well as the Solow growth model, even simpler in visual terms and in exposition in the text. Furthermore, it is possible to teach the aggregate demand and supply model without covering the Solow model at all, for those who wish to consider that part of the book optional.

3. We have updated Chapter 11 and Chapter 18 on “Unemployment and Labor Force Participation” and “Fiscal Policy” to reflect very recent experience with the U.S. economy coming out of the Great Recession.

4. Quantitative easing is included in Chapter 15 on the Fed.

5. Our monetary policy chapter (Chapter 16) includes a new section on using a nominal GDP rule.

6. We have created free, online videos for most chapters in this book. These videos are short (five to seven minutes, usually), visually appealing, and easy to use. We all know that videos can be a very effective medium for teaching and a complement to the classroom and to the written text. We use videos to show supply and demand, the economics of price controls, externalities, trade and the division of labor, the history of economic growth, and many other centrally useful economic concepts. These videos are lively and to the point, in some cases using formal animation techniques, others with a virtual blackboard, à la Khan Academy. Our videos are supplemented with a personally curated list of other video material that wonderfully illustrates economic concepts and history. If you wish to start with a video to see how these work, just try the QR code in the margin to the left. What’s a QR code? You just scan the code with a smartphone and it brings you to a useful Web site or video for illustrating economic concepts. No more typing in long or difficult to remember URLs. A book called Modern Principles should be taking advantage of modern technology. Links to the videos are also in our new coursespace, LaunchPad, along with assessment. The videos can also be found online at MRUniversity.com. And don’t forget that a video, unlike your lecture, can be rewound, rewatched, or taken on a trip if a student misses class. It’s also a lot more portable than a heavy textbook.