This book owes a great deal to many people. The book is an outgrowth of courses I have taught at Princeton, M.I.T., Stanford, and especially Berkeley. I want to thank the many students in these courses for their feedback, their patience, and their encouragement. Four people provided detailed, thoughtful, and constructive comments on almost every' aspect of the book: Laurence Ball, A. Andrew John, N. Gregory Mankiw, and Christina Romer. Each of them significantly improved the book, and 1 am deeply grateful to them for their efforts. In addition, Susanto Basu, Matthew Cushing, Charles Engel, Mark Gertler, Mary Gregory, A. Stephen Holland, Gregory' Linden, Maurice Obtsfeld, and Robert Rasche made valuable comments and suggestions concerning some or all of the book. Jeffrey Rohaly not only prepared the superb Solutions Manual to accompany the book, but also read the page proofs with great care and made many corrections. Teresa Cyrus helped with the preparation of some of the tables and figures. Finally, the editorial staff at McGraw-Hill and the production staff at Publication Services, Inc., especially Leon Jeter, Victoria Richardson, Scott Schriefer, Scott Stratford, and Lucille Sutton, did an excellent job of turning the manuscript into a finished product. I thank all of these people for their help. David Romer is professor of economics at the University of California, Berkeley. He received his A.B. from Princeton University, where he was valedictorian, and his Ph.D. from M.I.T. He has been on the faculty at Princeton and has been a visiting faculty member at M.I.T. and Stanford. He is also a Research Associate of the National Bureau of Economic Research and serves on the editorial boards of several economics journals. His main research interests are monetary policy, the foundations of price stickiness, empirical evidence on economic growth, and asset-price volatility. He is married to Christina Romer, who is also an economist, and has two children, Katherine and Paul.