This macroeconomics textbook is the first to be written from a European perspective. No previous knowledge is assumed and nearly all topics in macroeconomics are covered, including advanced concepts such as endogenous growth or time inconsistency. It presents the "new" macroeconomics--a synthesis of the older fixed price approach and of the newer microeconomic foundations and intertemporal aspects. The work looks at the open economy and the effect of openness as a source of disturbance, emphasizing the exchange rate and the importance of capital movements and other international linkages. Each chapter includes an overview, summary section, list of key concepts, and many exercises.