The enthusiastic response given to the first edition of this book heartened us, and was soon countered by the sobering responsibility of success. Nowhere in economics does research develop as rapidly as in macroeconomics, so our goal to capture the spirit and content of the new work in a form that is manageable in the intermediate level course requires steady revision. Also, while our fellow researches have given us major discoveries to contend with, the tens of thousands of students who have used the book have made many useful suggestions about how to fine tune the has benefited enormously from the MacoSolve software, we are pleased that with this edition our publisher makes it available to all our readers.