Microeconomics looks at a single firm, a single consumer, a single market. Macroeconomics zooms out. It studies the whole economy: total output, total employment, overall price levels, and the interactions between them. It asks why recessions happen, what causes inflation, and how governments can soften downturns. The field was born in the 1930s, when John Maynard Keynes tried to explain the Great Depression.

Macroeconomists work with aggregates. GDP measures total production. The unemployment rate measures the share of the labor force without work. The inflation rate tracks changes in the general price level. These numbers are imperfect, but they are the best tools available for steering an economy. Central bankers and finance ministers rely on them daily.

The field is divided into schools of thought. Keynesians favor active government spending to fight recessions. Monetarists emphasize controlling the money supply. New classical economists argue that markets clear quickly and government intervention often backfires. The debates are fierce, and they shape real policy. A president who appoints a Keynesian to run the Federal Reserve will get different advice than one who appoints a monetarist.

Key macro questions

• What causes recessions?
• How does inflation get started and stopped?
• What determines long-run growth?
• How do fiscal and monetary policy interact?
• Why do some countries stay poor?