Macroeconomic Pathologies

In this chapter, Professor Sachs compares a macroeconomy to a human body, addresses what pathologies could afflict a macroeconomy, as well as addresses what a healthy economy looks like. A healthy economy has a level of output or income per person that gives a good level of prosperity, has relatively stable prices, etc. Sachs mentions John Maynard Keynes, the father of modern macroeconomics. There are seven major pathologies of macroeconomies: unemployment, poverty and growth traps, high inflation, financial crisis, sovereign default, inequality, and resource depletion/natural capital depletion.