Useful Macroeconomics
Edition: 2
Copyright: 2026
Pages: 225
Edition: 2
Copyright: 2026
Pages: 278
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Useful Macroeconomics is organized around three themes: economic issue history, macroeconomic data literacy, and systems thinking and modeling. The first section of each chapter emphasizes the history of issues and policies in the U.S. economy. Next, the data literacy section engages students with macro data and concepts, data collection and presentation, and interpretation.
In the third section of each chapter, you will see that this is not your father's macro textbook. There are no static graphs. Students use free and friendly software to build simple dynamic simulation models on their own and build the author's textbook model – MacroLab – one sub-model at a time. Models are presented as hypotheses (not ‘laws’) about economic structure and behavior, and the text engages the students in a constructive approach to science and learning. Most chapters in the 2nd edition contain simulation experiments that emphasize how the behavior of the model economy depends on the interaction of its key components.
The 2nd edition contains three new chapters. Chapter 9 highlights the 2000–2009 historical period that began with the ‘dot-com’ recession and ended with the financial crisis that triggered the Great Recession. The modeling section focuses on the government sub-model. In chapter 10, we trace the contentious policy issues surrounding the slow but steady economic recovery during the second decade of the new century. The sub-models for commercial banking and the central bank are explored in this chapter. Chapter 11 brings us up-to-date historically – from the COVID-19 lockdown of the economy in 2020, through the post-pandemic inflation, to the restoration of economic prosperity by 2024. The brief but deep disruption in world trade during the pandemic provides a current-events context for exploring the ‘rest-of-the-world’ sub-model in this chapter.
The overall approach is based on more than twenty-five years of classroom experience with both graduate and undergraduate students. Instructors have access to supplementary materials and tutorials for learning and teaching with the free Stella Online software and the MacroLab simulator.
About the Author
Preface
Suggestions for Using this Book
Acknowledgements & References
Introduction
PART 1 THE ECONOMY AS A SYSTEM
Chapter 1 Inflation or Deflation: Which is Worse?
Issues, 1790–1900
Chapter 2 Employment: Farm to Factory
Issues, 1900–1930
Chapter 3 GDP: How to Add Hotdogs, Haircuts, and Hammers
Issues, 1930–1950
PART 2 SUPPLY SIDE PRODUCERS
Chapter 4 How Much to Produce?
Issues, 1950s
Chapter 5 Employment or Productivity: Must We Choose?
Issues, 1960s
Chapter 6 Wages or Prices: Which is Chicken, Which is Egg?
Issues, 1970s
PART 3 DEMAND SIDE SPENDERS AND THEIR BANKERS
Chapter 7 What Goes Around, Comes Around
Issues, 1980s
Chapter 8 Consumption: Income or Expense?
Issues, 1990s
Chapter 9 Should Government Balance its Budget?
Issues, 2000s
Chapter 10 Bank Credit: Friend or Foe?
Issues, 2010s
Chapter 11 Foreign Trade: Who Wins, Who Loses?
Issues, 2020s
Closing the Loop
Glossary of Key Terms
I. David Wheat is Emeritus Professor of System Dynamics at the University of Bergen in Norway, Professor of Economic Dynamics at the National University of Kyiv-Mohyla Academy in Ukraine, Professor of Economics at Virginia Western Community College in the United States, and retired Professor of Financial Economics at ISM University of Management and Economics in Lithuania.
Currently, he teaches macroeconomic modeling and economic dynamics to graduate students in Norway and Ukraine, as well as macroeconomics to undergraduates in the United States. For many years, he taught courses in policy implementation and system dynamics modeling in Norway and monetary policy in Lithuania.
Since the 1990s, students in the United States have been using simplified versions of his MacroLab model to learn macroeconomics. This book was written to complement student use of the current version, which is accessible online with most Internet browsers. He is also a co-editor of Feedback Dynamics: Economic Modeling with System Dynamics (Springer 2021).
As an economic systems scientist, his research specialty is development of a transparent, stock-flow-consistent model of the United States economy and sharing it with others. His research projects include collaboration with Ukrainian economists to build dynamic modeling capacity at national universities in Kyiv and Lviv, a system dynamics version of the central bank’s monetary policy model, and an economic recovery policy model for post-war Ukraine. He also worked with economists at Lithuania’s central bank to develop a multi-industry system dynamics model of price dynamics in Europe.
Wheat is past president of the economics chapter of the International System Dynamics Society, and he has given more than thirty international guest lectures. He served as Associate Editor of the System Dynamics Review and on the Advisory Board of the International Journal of Pluralism and Economics Education. For three decades, he was president of Wheat Resources Inc, a consulting firm serving business and government clients. His current firm, Praktika LLC, specializes in coaching others to build useful models. He received his PhD in system dynamics at the University of Bergen, his master’s degree in public policy at Harvard University, and his bachelor’s degree in government and mathematics at Texas Tech University. During the 1970s, he served at the White House as staff assistant to the President of the United States.
In a previous life, he and his young family lived in the Blue Ridge Mountains of Virginia, where they built a barn and raised goats and chickens, and he coached back-to-back state championship teams in high school girls’ basketball. After two decades in Norway, he and his wife have returned to Virginia and settled in Charlottesville, near Washington, D.C.
Useful Macroeconomics is organized around three themes: economic issue history, macroeconomic data literacy, and systems thinking and modeling. The first section of each chapter emphasizes the history of issues and policies in the U.S. economy. Next, the data literacy section engages students with macro data and concepts, data collection and presentation, and interpretation.
In the third section of each chapter, you will see that this is not your father's macro textbook. There are no static graphs. Students use free and friendly software to build simple dynamic simulation models on their own and build the author's textbook model – MacroLab – one sub-model at a time. Models are presented as hypotheses (not ‘laws’) about economic structure and behavior, and the text engages the students in a constructive approach to science and learning. Most chapters in the 2nd edition contain simulation experiments that emphasize how the behavior of the model economy depends on the interaction of its key components.
The 2nd edition contains three new chapters. Chapter 9 highlights the 2000–2009 historical period that began with the ‘dot-com’ recession and ended with the financial crisis that triggered the Great Recession. The modeling section focuses on the government sub-model. In chapter 10, we trace the contentious policy issues surrounding the slow but steady economic recovery during the second decade of the new century. The sub-models for commercial banking and the central bank are explored in this chapter. Chapter 11 brings us up-to-date historically – from the COVID-19 lockdown of the economy in 2020, through the post-pandemic inflation, to the restoration of economic prosperity by 2024. The brief but deep disruption in world trade during the pandemic provides a current-events context for exploring the ‘rest-of-the-world’ sub-model in this chapter.
The overall approach is based on more than twenty-five years of classroom experience with both graduate and undergraduate students. Instructors have access to supplementary materials and tutorials for learning and teaching with the free Stella Online software and the MacroLab simulator.
About the Author
Preface
Suggestions for Using this Book
Acknowledgements & References
Introduction
PART 1 THE ECONOMY AS A SYSTEM
Chapter 1 Inflation or Deflation: Which is Worse?
Issues, 1790–1900
Chapter 2 Employment: Farm to Factory
Issues, 1900–1930
Chapter 3 GDP: How to Add Hotdogs, Haircuts, and Hammers
Issues, 1930–1950
PART 2 SUPPLY SIDE PRODUCERS
Chapter 4 How Much to Produce?
Issues, 1950s
Chapter 5 Employment or Productivity: Must We Choose?
Issues, 1960s
Chapter 6 Wages or Prices: Which is Chicken, Which is Egg?
Issues, 1970s
PART 3 DEMAND SIDE SPENDERS AND THEIR BANKERS
Chapter 7 What Goes Around, Comes Around
Issues, 1980s
Chapter 8 Consumption: Income or Expense?
Issues, 1990s
Chapter 9 Should Government Balance its Budget?
Issues, 2000s
Chapter 10 Bank Credit: Friend or Foe?
Issues, 2010s
Chapter 11 Foreign Trade: Who Wins, Who Loses?
Issues, 2020s
Closing the Loop
Glossary of Key Terms
I. David Wheat is Emeritus Professor of System Dynamics at the University of Bergen in Norway, Professor of Economic Dynamics at the National University of Kyiv-Mohyla Academy in Ukraine, Professor of Economics at Virginia Western Community College in the United States, and retired Professor of Financial Economics at ISM University of Management and Economics in Lithuania.
Currently, he teaches macroeconomic modeling and economic dynamics to graduate students in Norway and Ukraine, as well as macroeconomics to undergraduates in the United States. For many years, he taught courses in policy implementation and system dynamics modeling in Norway and monetary policy in Lithuania.
Since the 1990s, students in the United States have been using simplified versions of his MacroLab model to learn macroeconomics. This book was written to complement student use of the current version, which is accessible online with most Internet browsers. He is also a co-editor of Feedback Dynamics: Economic Modeling with System Dynamics (Springer 2021).
As an economic systems scientist, his research specialty is development of a transparent, stock-flow-consistent model of the United States economy and sharing it with others. His research projects include collaboration with Ukrainian economists to build dynamic modeling capacity at national universities in Kyiv and Lviv, a system dynamics version of the central bank’s monetary policy model, and an economic recovery policy model for post-war Ukraine. He also worked with economists at Lithuania’s central bank to develop a multi-industry system dynamics model of price dynamics in Europe.
Wheat is past president of the economics chapter of the International System Dynamics Society, and he has given more than thirty international guest lectures. He served as Associate Editor of the System Dynamics Review and on the Advisory Board of the International Journal of Pluralism and Economics Education. For three decades, he was president of Wheat Resources Inc, a consulting firm serving business and government clients. His current firm, Praktika LLC, specializes in coaching others to build useful models. He received his PhD in system dynamics at the University of Bergen, his master’s degree in public policy at Harvard University, and his bachelor’s degree in government and mathematics at Texas Tech University. During the 1970s, he served at the White House as staff assistant to the President of the United States.
In a previous life, he and his young family lived in the Blue Ridge Mountains of Virginia, where they built a barn and raised goats and chickens, and he coached back-to-back state championship teams in high school girls’ basketball. After two decades in Norway, he and his wife have returned to Virginia and settled in Charlottesville, near Washington, D.C.