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Macroeconomics Animations

Macroeconomics

Handbook cover

For use with reference to: How to think and reason in Macroeconomics – A South African Text, 5th edition. © Frederick CvN Fourie, Philippe Burger, Juta and Co Ltd, 2019.


Below are MP4 animations of most of the diagrams in the listed chapters in the textbook. Several additional animated slides explain difficult concepts (e.g. in chapters 4, 6 and 7).

Many of the animations are still applicable to the 3rd and 4th editions of the book.

Report problems with running the animations by email to: FourieFC@ufs.ac.za


Table of Contents

Chapter Listings

Chapter 2: The basic model I: consumers, producers and government
  • Fig 2.1-2.3 A: Transactions and flows
  • Fig 2.11 A: Changes in the macroeconomic equilibrium due to increased investment
  • Fig 2.14 A: Macroeconomic equilibrium with government expenditure
  • Page 73 A: Circular flow of real expenditure and income (without a financial sector)
Chapter 3: The basic model II: financial institutions, money and interest rates
  • Page 76 A: Circular flow of real expenditure and income (with a financial sector)
  • Fig 3.9 A: Money market equilibrium and changes
  • Fig 3.11 A: Effects of a decrease in the repo rate
  • Fig 3.13 A (normal speed): Net effect of an increase in government expenditure (with secondary effect)
  • Fig 3.13 (slow): Net effect of an increase in government expenditure (with secondary effect)
  • Fig 3.14 A: Preview: The IS-LM model and changes in the equilibrium levels of r and Y
  • Fig 3.21 A: IS-LM model basics: Fiscal expansion with secondary effects on r, I and Y
  • Fig 3.21 A (with time paths): Fiscal expansion with secondary effects on r, I and Y
  • Fig 3.22 A: IS-LM model basics: Monetary expansion
  • Fig 3.22 A (with time paths): Monetary expansion
  • Fig 3.23 A: Monetary stimulus – in influence of LM curve slope
  • Fig 3.24 A: Monetary stimulus – influence of IS curve slope
  • Fig 3.25 A: Fiscal stimulus – influence of LM curve slope
  • Fig 3.29: The financial crisis and quantitative easing in the USA
Chapter 4: The basic model III: the foreign sector
  • Page 140 A: Circular flow of real expenditure and income (with foreign sector)
  • Balance of Payments I: Counting inflows and outflows: Case 1: BoP = 0
  • Balance of Payments II: Counting inflows and outflows: Case 2: BoP < 0
  • Balance of Payments III: Distinguishing the current account and the financial account (for BoP = 0)
  • Balance of Payments IV: Distinguishing the current account and the financial account (for BoP < 0)
  • Balance of Payments V: Distinguishing current and financial account role players
  • Fig 4.14 A: IS-LM-BP basics: Monetary stimulus with impact on BoP
  • Fig 4.15 A: IS-LM-BP basics: Fiscal expansion with impact on BoP
  • Fig 4.16 A: IS-LM-BP basics: Increase in exports with impact on BoP
  • Fig 4.17 A: IS-LM-BP basics: BoP adjustment from a surplus
  • Fig 4.18 A: IS-LM-BP basics: BoP adjustment from a deficit
  • Fig 4.19 & 4.20 A1: Increase in the repo rate (WITHOUT chain reasoning)
  • Fig 4.19 & 4.20 A2: Increase in the repo rate (WITH chain reasoning)
  • Fig 4.21 & 4.22 A1: Fiscal expansion (WITHOUT chain reasoning)
  • Fig 4.21 & 4.22 A2: Fiscal expansion (WITH chain reasoning)
  • Fig 4.23 & 4.24 A1: Downswing in USA and decrease in SA exports (WITHOUT chain reasoning)
  • Fig 4.23 & 4.24 A2: Downswing in USA and decrease in SA exports (WITH chain reasoning)
  • Fig 4.25 (a): Fiscal stimulus and the confidence crisis in the Greek economy
  • Fid 4.25 (b): Fiscal austerity and the German economy
Chapter 6: Model for an inflationary economy: aggregate demand and supply
  • Page 240 A: Circular flow of real expenditure and income (with inflation)
  • Fig 6.2 A: Deriving the AD curve from the 45° diagram
  • Fig 6.3 A: Deriving the AD curve from the IS-LM diagram
  • Fig 6.4 A: Shifts of AD originate in IS-LM changes (example: increase in repo rate)
  • Fig 6.5 - 6.7 A: Basic labour market relationships: the PS, WS, and LS curves
  • Fig 6.5 - 6.7 A (continued): Basic labour market relationships: PS, WS, and LS curves
  • Fig 6.8 - 6.9 A I: The labour market I: Long-run employment and wage setting by the PS and WS relationships
  • Fig 6.8 - 6.9 A II: The labour market II: Employment and wage setting in the short run
  • Box p. 260 I: Types of unemployment – cyclical vs. structural
  • Box p. 260 II: AD-AS and cyclical vs. structural unemployment
  • Fig 6.11 & 6.12 A:The labour market, the derivation of and shifts in ASLR
  • Fig 6.13 A: The labour market and the derivation of ASSR
  • Fig 6.15 A: Two types of shift in the ASSR curve
  • Fig 6.18 A: AD-AS equilibrium and demand expansion followed by supply adjustment
  • Fig 6.20 A (version 1): AD-AS and an increase in the repo rate with BoP and ASSR adjustment processes
  • Fig 6.20 A (version 1 with time paths): AD-AS and an increase in the repo rate with BoP and ASSR adjustment processes
  • Fig 6.20 A (version 2): AD-AS and an increase in the repo rate with BoP and ASSR adjustment processes (for AS less sluggish, adjusting somewhat sooner)
  • Fig 6.20 A (version 3): AD-AS and an increase in the repo rate with BoP and ASSR adjustment processes (for AS adjusting even sooner)
  • Fig 6.22 A: AD-AS and an increase in government expenditure followed by supply adjustment
  • Fig 6.24 A: A domestic supply shock followed by supply adjustment
  • Fig 6.25 A: AD, ASSR, ASLR and an increase in the oil price
  • Fig 6.27 A: A supply shock followed by accommodation
  • Fig 6.28 A: Demand and supply expansion due to an increase in investment
  • Fig 6.29 I: Explaining output fluctuations and the price level in South Africa: the pure graphics of AD-AS theory
  • Fig 6.29 II: Explaining output fluctuations and the price level in South Africa: a description of macroeconomic changes using AD-AS theory
  • Fig 6.29 III: Explaining output fluctuations and the price level in South Africa: a stylised (and illustrative) 'macroeconomic history' applying AD-AS theory
  • Fig 6.29 III (with stops): Explaining output fluctuations and the price level in South Africa: a stylised (and illustrative) 'macroeconomic history' applying AD-AS theory
  • Fig 6.31: Impact of Eskom bottlenecks on GDP growth and prices (1-year effect)
  • Fig 6.32: Impact of Eskom bottlenecks on GDP growth and prices (medium- to long-term effects)
Chapter 7: Extending the model: inflation and policy reactions
  • Fig 7.1 A: AD-AS and steady inflation in the P-Y plane
  • Fig 7.1-7.2 A: Conversion diagram: Changing the vertical axis: AD-AS and steady inflation in the P-Y plane
  • Fig 7.2 A: A steady state of inflation in the π-Y plane
  • Fig 7.3 A: Higher expenditure growth in the P-Y plane
  • Fig 7.3-7.4 A: Conversion diagram: Higher expenditure growth: from the P-Y plane to the π-Y plane
  • Fig 7.4 A: Higher expenditure growth in the π-Y plane
  • Fig 7.5 A: Higher expenditure growth followed by supply adjustments in the π-Y plane
  • Fig 7.6 A: A supply shock and supply adjustments the π-Y plane
  • Fig 7.7 A I: Continually increasing inflation – and the augmented Phillips curve policy lesson [Also see next animation]
  • Fig 7.7 A II: Continually increasing inflation – another look
  • Fig 7.12 A: Policy targets: demand contraction to reduce inflation
  • Fig 7.17 A: Gradualist demand contraction to reduce inflation: the role of a policy reaction curve (e.g. MR)
  • Fig 7.18 A: Reactionist demand contraction to reduce inflation: the role of a policy reaction curve (e.g. MR)
  • Fig 7.17 & 7.18 Time-paths Comparing outcomes of reactionist and gradualist approaches
Chapter 8: Macroeconomics in the very long run: growth history
  • Fig 8.7-8.9 A: Balanced growth paths
  • Fig 8.10-8.12 A: Impact of an increase in s on the balanced growth path
  • Fig 8.15-8.16 A: Impact of an increase in a on the balanced growth path
  • Box p. 361 I: From fluctuations around trend to understanding growth paths in SA
  • Box p. 361 II: Where is South Africa going? Has the growth path rotated?
Chapter 12: Inflation, unemployment and low growth - causes and remedies
  • Fig 12.2 A: Sustained money supply growth and continual increases in the price level
  • Fig 12.3 A: Steady money supply growth and steady inflation in the π-Y plane
  • Fig 12.4 A: Demand-pull inflation in the π-Y plane
  • Fig 12.5 A: Cost-push inflation in the π-Y plane
  • Fig 12.6 A: Demand-pull inflation and policy options
  • Fig 12.7 A: Supply-shock inflation and policy options