In his text, Macroeconomics,Charles Jones discusses the basic process macroeconomists follow to answer the fundamental questions in the discipline:
- Document the facts.
- Develop a model.
- Reconcile the model with the facts.
- Make predictions that may be eventually tested.
Whether covering economic growth, inflation and the quantity theory, labor markets, business cycles, etc. most textbooks ignore the process of data collection, model calibration, and hypothesis testing that is required to complete these steps. We demonstrate how instructors can use the open educational resources Gapminder and FRED to create course content aimed to fill this gap. Gapminder is a website that provides a cornucopia of international data on macroeconomic, political, social, health, and education data. FRED is a database maintained by the Federal Reserve Bank of St. Louis that provides convenient access to U.S. macro data from government agencies as well as international data from the (Organization for Economic Cooperation and Development) OECD, World Bank, Penn World Tables, and other sources. In the realm of measurement, we show how Gapminder is a useful tool to illustrate how a nation’s material standard of living measured using traditional metrics such as real gross domestic product (GDP) per capita is closely tied to national welfare using a wide array of data on health and socio-political outcomes. We then show how instructors can use the graphing tools provided in FRED to exhibit how macroeconomists calibrate national savings rates for use with the Solow model using naïve and more nuanced approaches. Finally, we exhibit how both Gapminder and FRED can be leveraged to conduct simple bivariate analysis to introduce the canonical facts of economic growth and business cycle analysis and test the implications of the Solow and aggregate-supply/aggregate-demand models.