what is macroeconomics?

Macroeconomics – often referred to simply as ‘macro’ – looks at the behaviour of an economy in aggregate. It examines economic trends such as inflation, economic growth, gross domestic product (GDP), employment and the labour market, and consumer and corporate behaviour.

The relationships between these factors are used by macroeconomists to develop models. These models, and the forecasts they produce, help governments evaluate how an economy is performing, and decide on the actions it can take to increase or slow growth through monetary and fiscal policy.

Businesses also use macroeconomic models to set strategies in domestic and global markets. Similarly, investors develop market cycle models that include macroeconomic variables, which guide investment decision making in different economic phases such as slowdown, recession, recovery and growth.