Using Gapminder and FRED to supplement a modern approach to teaching intermediate macroeconomics

Macroeconomics has evolved into an intensely quantitative and data-driven field. Current practitioners in private industry, the public sector, and academia employ sophisticated theoretical and empirical models in tandem to study topics such as long-run economic growth, inflation, unemployment, business cycles, and monetary policy, which form the core of a typical intermediate macroeconomics course. Current approaches to teaching macroeconomics, as encapsulated in most textbooks, typically emphasize measurement (e.g. calculating gross domestic product (GDP)) and theory (the investment and savings/liquidity and money supply (IS/LM) and aggregate supply/aggregate demand (AS/AD) models), while ignoring the core of the discipline: using theoretical models to explain the temporal and cross-sectional variation of key macroeconomic indicators for the world’s economies. We demonstrate how instructors can use the open educational resources Gapminder and FRED to supplement an approach to teaching intermediate macroeconomics using a modern approach that emphasizes the interplay between data collection, empirical analysis, model development, and prediction. 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. We specifically exhibit how instructors can use both Gapminder and FRED to introduce the canonical facts of economic growth and business cycles for various countries. We then show how instructors can use FRED to exhibit how macroeconomists calibrate the Solow model and use it for development accounting. Finally, we demonstrate how students and instructors may use FRED’s graphing tools to test the predictions of the Solow and AS/AD models.