The Origins of Macroeconomics


In 1664 William Petty, an adviser to England’s Charles II, compiled the first known national accounts. He made 4 entries. On the expense side, “food, housing, clothes and all other necessaries” were estimated at £40 million. National income was split among 3 sources: £8 million from land, £7 million from other personal estates and £25 million from labor income.  

In later centuries estimates of country income, expenditure and material inputs and outputs became more abundant. But it was not until the 1940s that a systematic framework was developed for measuring national income and expenditure, under the direction of British economist John Maynard Keynes. As the methodology became an international standard, comparisons of countries’ financial positions became possible. Today the macroeconomic indicators in national accounts are standard in every country.  

Governments committed to the economic health of their country and opportunities for its citizens now focus on more than macroeconomic conditions. They also pay attention to the laws, regulations and institutional arrangements that shape daily economic activity.  

Extracted from: Doing Business Report 2010  

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