AIM Errata

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Known Errors:

(note that the html editor does not support many mathematical characters; in those cases in the notes below, they must be described, rather than written properly)

p. 14, under the bullet Unconditional Forecasts, line 4, 1st sentence:

It now reads "Y2011 = 1,070; Y2012 = 1,049; Y2013 = 1,034; . . . Y2025= 1,000." It should read "Y2010= 1,100; Y2012 = 1,070; Y2013 = 1,049; Y2014 = 1,034; . . . Y2025= 1,000." [Note: dates are all subscripts in the published version of the textbook.]

pp. 20-21, Table 1.1:

Under Presidents, Reagan should be shaded gray to indicate that he was Republican.

Under Federal Reserve Chairs, Hardy should be Harding; and the names of three chairman are missing, although their dates are listed: D.R. Crissinger May 1923 – September 1927; R.A. Young October 1927 – August 1930; E. Meyer, September 1930 – May 1933.

p. 45, Figure 2.1:

The value to Total Flows abouve the equal sign (=) should be $7,416 not $8,707.

p. 46,Box 2.1:

The sentence beginning "If the private sector is in deficit . . ." is not incorrect, but it is unclearly expressed. Replace it with: "Even if the government's budget, starting from the situation in 2009, were to become balanced, then the private-sector deficit and the foreign-sector deficit would have to take equal and opposite signs, so that the identity would continue to hold. But that fact, in itself, does not tell us which of the deficits or which of its components change. If only the private-deficit adjusted -- e.g., shifted from surplus (a negative value) to deficit, either by investment rising or savings falling -- net exports could, in fact, remain constant."

p. 55, Table 2.3:

The data for per capita GDP for Argentina and Mexico are incorrect. The correct data are:

Argentina $14,200, rank 80

South Africa $10,100, rank 105

p. 76, 1st full paragraph, line 13:

Where it currently reads ". . . 2.9 percent (= (2 – 0.06 x 20)/28) . . ." it should read ". . . 4.3 percent (= (2 – 0.04 x 20)/28) . . ."

p. 110, Problem 3.1:

The problem would be clearer in relationship to the text if "Net Transfers from Abroad" were changed to "Net Transfers to Abroad" and the entries on that line were changed to 2001: +3 (rather than –3) and 2002: +7 (rather than –7). [Answer keys on the website and for instructors have been updated to reflect this revision as of 10/31/12/.]

p. 134, Problem 4.6:

In part (b) the base for the CPI in parentheses should read "(p-subscript-82-84)" and not "(p-subscript-67)" and in part (c) the base for the CPI in parentheses should read "(p-subscript-67)" and not "(p-subscript-82-84)".

pp. 140, 141, Figures 5.2 and 5.3:

Captions state that

"Peaks and troughs of the original series are also the peaks and troughs of the detrended series."

This is incorrect. They should instead say,

"The peaks and troughs of the detrended series are shifted somewhat to the left (i.e., earlier) than those of the original series. (See the Guide, section G.12.3, especially Figure G.12, pp. 782-783, for a discussion of such phase shifting in the context of detrending using growth rates. Phase shifting occurs with other detrending methods as well.)"

p. 161, Problem 5.4:

The problem refers to data from 1947, but the data set on the textbook website current as of November 2012, includes only data starting in 1948. This will be corrected in future revisions of the data. However, it poses no problems for answering the question, since all measurements refer to a peak or a trough as a starting point, and no peaks or troughs occur in 1947.

p. 189,equation (6.11):

The first inflation rate (p-hat) on the right-hand side should have the subscript "t+1" rather than "t".

p. 198, lines 3 and 7 up from the bottom:

The definitions of "MONETARY BASE (MB)" and "M1" would be more precise if "currency" were replaced with "currency in the hands of the nonbank public" in each case. [The same change could be made on p. 838 in the defnition of M1, on p. 622 (line 8) and p. 840 in the definition of the monetary base.]

p. 242, line 6 up from the bottom:

The parenthetical definitions of ex ante and ex post should be reversed.

p. 314, Figure 9.2, panel (B):

In the function labeling the curve, the argument should be k and not k-subscript 0.

p. 316, Figure 9.3, panel (B):

In the functions labeling both the curves, the argument should be k and not k-subscript 0.

p. 317, Figure 9.4, panel (A):

In the function labeling the lower curve, the subscript on k-bar should be 0 and not 1.

p. 327, equations (9.9) and (9.10):

In the middle term of each equation, the variable A should be inserted immediately before the parenthetical expression.

p. 317, Figure 9.4, panel (B):

For the label on the axis, the left-hand k should have the subscript 0 and not 1.

p. 324, Figure 9.8, panel (B):

In the function labeling the curve, the argument should be k and not k-subscript 0.

p. 329, equations (9.15) and (9.16):

In the expression after the second equal sign (=) in (9.15) switch the places of Y in the denominator with L in the numerator. In the expression after the second equal sign (=) in (9.16) switch the places of Y in the denominator with K in the numerator.

p. 342, Figure 9.16:

The horizontal axis should be labeled K and not L.

p. 372, equation (10.11"):

In the middle expression, K-hat should be omitted.

p. 375, equation (10.12):

In the middle expression, a variable A should be inserted between alpha and the parenthetical expression.

p. 383, equation (10.20):

In the middle expression, -A subscript L with a hat on the A should be inserted after L-hat.

p. 387, last paragraph:

In Lines 7 and 1 from bottom: omit "delta+" from the expressions for balanced growth paths.

p. 388, line 2 below caption:

Omit "delta+" from the expressions for balanced growth paths.

p. 389, Figure 10.13:

a) The vertical axis should be labelled "log Y" not "log Y-smile".

b) In the two expressions for the slopes of the balanced growth paths, omit "delta+".

p. 389, line 1 below caption:

Replace "At K-smile-subscript-0," with "After the increase in the population growth rate, K-smile-subscript-0 < "

p. 402, table in Problem 10.6:

The first row of numbers (3.06, 2.75, 4.82) should align with "Growth Rate of Output" and not with "Income Shares," which is simply a heading for three lines that follow it. And the last of those three lines "Communications equipment" should be indented to align flush with the two lines above it: "Hardware" and "Software"; while "Income shares" itself should be outdented to align with "Growth rate of output" and "Growth rates of inputs".

p. 406, lines 9-11:

Replace the sentence that now reads "Because of diminishing returns to a factor of production, the relationship between real-wage rates and the marginal product of labor is inverse:" with "Because of diminishing returns to a factor of production, the relationship between real-wage rates and the demand for labor is inverse:".

p. 487, line 5:

Replace the phrase "or in people's plans" with "or in the accounts".

p. 388, lines 3-4 after equation (13.2):

The slopes should be Greek delta C/delta YD and not delta C/delta Y; and it should be dC/dYD and not dC/dY.

p. 497, Figure 13.6:

Several problems with the diagram: A corrected version can be downloaded here: Figure 13.6 (corrected).

p. 534, Problem 13.6:

tr0 = 500.00 ( not 666.67). [At the printed value, the budget is not balanced as the question asserts; rather there is a deficit of 51.29. If this value, rather than the balance is taken as the target for policy, then the remainder of the problem works. However, not only does the budget balance with the correction tr0 = 500.00, the numbers are all much easier to work with.]

p. 591, line 4 up:

The variable POP should have a hat (^) over it.

p. 594, line 3:

Replace the phrase "the regression line in Figure 15.5" with "regression line in Figure 15.4 ".

p. 612, Figure 5.11:

The bold black dot above the Phillips curve line should be labeled "A" .

p. 622, line 8:

The definition of "MONETARY BASE (MB)" would be more precise if "currency" were replaced with "currency in the hands of the nonbank public.". [The same change could be made on p. 198 and p. 838 in the defnition of M1 and on p. 198 and p. 840 in the definition of the monetary base.

p. 631, Figure 16.3:

The interest rate on the vertical axis in the left-hand panel is a nominal rate and, thus, the values should be indicated as r_subscriptFF and not as real interest rates rr_subscriptFF.

p. 671 in section "Monetarism and the Fed":

"Carnegi-Mellon University" should read "Carnegie-Mellon University."

pp. 756 2 lines above equation (G.10'):

The sentence that begins "Multiplying and dividing by pjt [where jt is subscripted] . . ." should read "Multiplying and dividing by pj0 [where j0 is subscripted] . . ."

pp. 756-759 in section G.8.2 Price Indices:

The examples that refer to Table 4.1 refer to the dates 2009, 2010, and 2011. However, Table 4.1 refers to 2010, 2011, and 2012. In each instance in this section 2009 should be changed to 2010, 2010 to 2011, and 2011 to 2012, and the the subscripts on all variables should be changed conformably.

p. 838 in the definition of M1:

The definition of "M1" would be more precise if "currency" were replaced with "currency in the hands of the nonbank public" in each case. [The same change could be made on p. 198 in the defnition of M1, on p. 198, p. 622 (line 8) and p. 840 in the definition of the monetary base.]

p. 840 in the definition of MB:

The definition of "monetary base" would be more precise if "currency" were replaced with "currency in the hands of the nonbank public" in each case. [The same change could be made on p. 198 and p. 838 in the defnition of M1, on p. 198, p. 622 (line 8) in the definition of the monetary base.]