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This third edition maintains the authors' accessible approach to the theory underpinning macroeconomics, with an emphasis on contemporary Australian macroeconomic policy. Examples and case studies are drawn from Australia and the Asia-Pacific region ensuring relevance to local students. This edition incorporates new material on the Solow growth model, leading economic indicators, interest rate determination, balance of payments and exchange rates. In particular, coverage of the Keynesian approach is expanded considerably and then distinguished against contemporary and alternativee macroeconomic theories. Core macroeconomics concepts, as well as fiscal and monetary policy and international finance, are emphasised and updated to reflect current policy concerns.