There is an uncomfortably large gulf between academic research and what policy economists use to understand the economy. A Practical Guide to Macroeconomics shows how economists at policy institutions approach important real-world questions and explains why existing academic work – theoretical and empirical – has little to offer them. It argues that this disconnect between theory and practice is problematic for policymaking and the economics profession and looks at what's needed to make academic research more relevant for policy. The book also covers topics related to economic measurement and provides a compact overview of US macroeconomic statistics that will help researchers use these data in a better-informed way.

‘In 2021, when inflation surged in the United States, deep divisions arose among macroeconomists about how the Federal Reserve should respond. Macroeconomic theory and the workhorse models needed to be better equipped to recognize the realities of the pandemic, and it showed. Jeremy Rudd brilliantly lays out the roots of the problem. Over time, academic theory has become increasingly disconnected from the real world and the needs of policymakers. His book brings us back to foundational questions. Without a deep and humble introspection, we will be no better prepared for the next crisis. In his book, Rudd sets us on the path to do just that.’

Claudia Sahm - founder of Sahm Consulting and former Federal Reserve economist

‘Jeremy Rudd’s remarkable book is far more than a ‘practical guide.’ His unique and impressive blend of erudition, insight, and chutzpah ensures that any economist who delves into this book will find both reasons to scowl and reasons to smile as Rudd deftly picks modern macro apart. This book earns a prominent place on my bookshelf.’

Alan S. Blinder - Gordon S. Rentschler Memorial Professor of Economics and Public Affairs, Princeton University