[Verse 1] Let's measure the economy's health today GDP shows us the total we make Consumption plus investment that's our way Government spending, net exports we take Real versus nominal, strip out the price CPI and deflator, they're measuring twice But GDP's got limits, can't show us all Quality of life might rise or fall [Chorus] C plus I plus G plus NX That's the spending approach, what comes next Business cycles rise and fall Expansion, peak, contraction call Then the trough before we climb Through the economic time [Verse 2] Leading indicators show us what's ahead Lagging ones confirm what markets said Coincident moves with the current flow Solow model helps long-term growth show Total factor productivity's the key Institutions matter for you and me Productivity puzzle, secular debate How fast can our economies create [Chorus] C plus I plus G plus NX That's the spending approach, what comes next Business cycles rise and fall Expansion, peak, contraction call Then the trough before we climb Through the economic time [Verse 3] Federal Reserve has a dual mandate Price stability and jobs they navigate Federal funds rate, their primary tool Open market ops, quantitative rule Forward guidance tells us their intent Taylor Rule shows how rates are bent Phillips Curve shows the trade-off line Short-run slopes down, long-run's divine [Bridge] Fiscal policy, government's might Spending and taxes, day and night Multipliers boost, crowding out fights Automatic stabilizers balance the flights Debt to GDP, sustainability's test Interest rates versus growth rate contest [Verse 4] Balance of payments tells the global tale Current account, capital flows set sail Exchange rates float or fix in place Purchasing power parity sets the pace Interest rate parity, arbitrage away Impossible trinity, you can't have your way Comparative advantage drives the trade Gains from commerce, wealth is made [Outro] Financial crises shake the world around Credit booms and bubbles, systemic sound Contagion spreads through networks wide Macroprudential rules, our safety guide From local growth to global flow This macro knowledge helps us know
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