The book “Economics Today” by John Taylor covers every aspect of economics in the macro view from interest rates to unemployment, government spending and regulation and international trade. He gives an overview of macroeconomics, how it is made up and discusses its implications in a macro perspective.
Taylor divides his text into chapters with sections that cover the macro view of economics in a more general way. These sections cover the four main components of microeconomics and how they are intertwined. These are demand, supply, income and prices. Each section is divided into sub-topics such as consumer demand, business investment and government spending.
Taylor covers each of these areas in chapter one, but then proceeds to cover them all in order of their importance. Chapter two focuses on the effects of government spending on income and prices. Chapter three goes over the effects of inflation on the price level and interest rates. Chapter four explains why and how the government has to intervene in a recession and provides a list of four reasons for doing so. Chapter five takes a closer look at the role of money and the role of fiscal policy and how it affects inflation and inflationary pressures.
Chapter six covers how the central bank can influence the price level and interest rates by purchasing or selling bonds. This includes a brief introduction to the Federal Reserve System and an explanation of how interest rates are determined. Then Taylor discusses the role of money and how it influences interest rates.
Chapter seven focuses on the interaction of the supply and demand components of the model and what effects these have on the market. The macro view is then taken as a whole and discussed in terms of macroeconomic indicators.
Taylor's text is definitely an informative read and provides a great overview of the micro and macro views of economics. It is also a very useful guide to a wider world of economic issues that can be very helpful in making better economic decisions.
Taylor's book can be a bit difficult to understand at times and this can frustrate some readers. However, most readers will soon get a grasp of the concepts and the explanations will make sense. The book does tend to get a bit dense at times with the number of topics discussed and the complex nature of his models.
I also recommend the book because it contains a very clear explanation of what Taylor's theory of the “Business Cycle” is and what the relevance of this is to the current economy. This is a good primer on the history of business cycles and the theory of business cycles in economics.
This information is also useful to help the reader understand the issues of monetary and fiscal policy and how it applies to economic policies. As we move forward in time, understanding the basics of the economic policy and understanding the impact of changes in these policies can make a huge difference to the economic policies we choose.