“It is not how much empty space there is, but rather how it is used. It is not how much information there is, but rather how effectively it is arranged.”
—Edward R. Tufte
For a long while, we have been hearing from instructors who wanted to use the Krugman/Wells text in their principles course, but needed a less comprehensive version: a book that was shorter overall, with a focus on the essential principles of economics, and with less in the way of theory and analytics. We’ve responded to these requests, and you are holding the result in your hands.
Macroeconomics in Modules is a streamlined textbook that incorporates an innovative format geared toward how students learn today. Instead of tackling 24 chapters of about 25 to 40 pages each, students encounter 6- to 10-page modules designed to be read in a single sitting. What exactly is a module? We think users and reviewers have come up with the best definition. They consistently describe modules as “short, digestible chunks” of text that students actually read. We should also add that shorter does not mean taking shortcuts. Although each module is a short, easy-to-manage reading assignment, each is also informative and thorough, with adequate rigor.
This text includes carefully crafted pedagogy that works within the modular format to enhance the student learning experience. The modular format offers a unique opportunity for structured learning and assessment. Each module concentrates on a specific topic using a learning-objectives approach and then concludes with three types of self-assessment questions: “Check Your Understanding” and multiple-choice questions that allow students to test their comprehension of module content, followed by critical-thinking questions that encourage reflection and analysis. Answers to these questions appear at the end of the book, so students can actually see how well they’ve mastered concepts.
There is additional opportunity for assessment at the end of each section (a section is a grouping of modules): thoughtful problems that test related concepts across all of the modules in a section, encouraging students to make connections among ideas as well as apply and practice what they’ve learned.
We’ve refined the modular structure in this edition to offer even greater flexibility. We’ve added six new sections to help unpack some of the more module-heavy sections. The result: more focused sections with fewer modules in each. Important topics are contained within their own sections, making it easier for instructors to navigate through the book and assign the topics they want to teach without breaking chapters apart (often done with non-modular texts), which can undermine narrative flow and diminish comprehension.
We see it for ourselves, we have heard it from reviewers, and the research confirms it: students are reading less, for shorter periods of time, and they continue to struggle with comprehension. So, when we began thinking about the idea of developing a more streamlined principles text, we also thought a lot about the best way to format it.
The modular format, which is popular in other disciplines, appealed to us. It was in keeping with the findings of cognitive psychologists who have demonstrated that comprehension is best attained when material is “chunked” into smaller reading assignments, reinforced with frequent questioning (the “testing effect”), and incentivized by a sense of accomplishment earned from completing discrete reading tasks. These findings are at the heart of the modular format of this text and its pedagogy.
Comments from users confirm the benefits of this new way of presenting economic concepts. Each user reported an almost identical story: students were actually completing their reading assignments, something that was rare when traditional textbook chapters were assigned. Overall, they found students coming to lectures better prepared. And, each of these users couldn’t imagine returning to a textbook with a more traditional format.
This result makes intuitive sense. Why wouldn’t students prefer to read short modules instead of long chapters? Of course it would enrich the learning experience if students could check their comprehension more frequently, at the end of short modules.
For a closer look at the text’s format and feature set, see the walkthrough on pages xxiv–xxxi.
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This edition of Macroeconomics in Modules represents a major revision. We had three goals in mind as we worked: adding important new content, improving the organization of sections, and updating examples and data to keep the book current and relevant. We even added a new feature.
Decisions about many of the changes were made with the help of feedback from a devoted group of adopters and reviewers—all fans of the modular format who offered us excellent suggestions for how we could make the text an even better match for their principles courses. Here is an overview of the major revisions.
This was an omission that prompted the most vocal response from instructors and we’ve remedied it in this edition with new Module 26, “The Income-Expenditure Model.” The new module offers a detailed look at the aggregate-expenditure model and presents the famous 45-degree diagram for those who cover this material. We worked hard to keep this module focused and free of unnecessary complexity.
In addition to the new module on the Keynesian cross, we’ve included two new modules on topics that mean a lot to us and, that we hope, will allow you to enrich your own teaching. Module 8, “International Trade,” has been included for those who wish to delve deeper into trade topics than is possible with the coverage of comparative advantage and trade presented in Module 3.
Module 42, “Crises and Consequences,” offers a unique look at the financial crisis of 2008, examining the aspects of the banking system that allowed the crisis to happen, the reasons why banking crises are so bad for so many, and the role that government and regulation play in crises.
Organizational Improvements We made the following changes in this edition. But for those who prefer to teach using a different order, the sections and modules remain completely flexible.
Many new sections: We’ve already touched on the benefits of more sections. Those of you familiar with the second edition will notice that we’ve virtually doubled the number of them, a structural change that alters the look of our table of contents, we think, for the better. Material that had been submerged previously, such as ADAS (Section 8), Fiscal Policy (Section 9), and Money, Banking, and the Fed (Section 10), is now prominent. Some modules have moved to accommodate the new structure, resulting, overall, in a more logical flow of ideas.
New early growth coverage: Following the section on unemployment and inflation is an early, all-new section devoted to economic growth (Section 5). This early coverage allows us to emphasize the idea that economic growth, along with low unemployment and stable inflation, are important policy goals. In addition, early coverage of long-run economic growth in real GDP helps students understand why the business cycle involves fluctuations around an upward trend. And we are now able to highlight the role that the markets and institutions covered next, in Section 6, play in economic growth.
Now, more than ever, students need a strong understanding of economic principles and their applications to business decisions. To meet this need, virtually every section now concludes with a real-world business case that illustrates how the economic principles just covered play out in the world of entrepreneurs and bottom lines.
The cases are wide-ranging and provide insight into business decision making. They include an examination of how lean production techniques at Boeing and Toyota increased efficiency at both companies and led to a worldwide manufacturing revolution. (Section 1: “Efficiency, Opportunity Cost, and the Logic of Lean Production”). Another case looks at the changing job market during a recession, examined through the lens of companies like Monster Worldwide and its competitors (Section 4: “A Monster Slump”). One of our favorites is the case addressing the role of gift cards in secondary markets and the value of breakage when individual consumers fail to pay down their gift cards completely (Section 10: “The Perfect Gift: Cash or a Gift Card?”).
Each case concludes with “Questions for Thought” that help students engage more deeply with economic concepts by seeing them applied in actual business situations. A list of the new Business Cases appears on the inside front cover.
This edition includes 15 new “Economics in Actions” (formerly called “In Real Life”). Many of those not replaced outright have been updated to include recent developments and research. Virtually every module includes at least one “Economics in Action” feature. In addition, all but two of our section-opening stories are new to this edition, for a grand total of 12 new openers. We have also undertaken a thorough updating of examples, data, and applications.
It is important to us to emphasize currency and to use stories from real life and the news. This makes every revision a work-intensive endeavor, but we believe that currency drives student interest.
The annotated table of contents that follows shows how the modular format works and explains the focus of each section. Although the sections are grouped into building blocks in which conceptual material learned at one stage is built upon and then integrated into the next stage, the coverage is also flexible enough to allow instructors to organize content to best meet their needs.
Following the table of contents is a visual tour of our feature set that clarifies how well the content of this text is supplemented by real-world examples and ample opportunity for practice and review (pages xxiv–xxvii).
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