Food in the Macroeconomy: The Whole is More Than the Sum of its Parts

This chapter shows how the food system interacts with society and the economy as a whole. That larger macroeconomy involves the circular flow of goods and services exchanged among people within each country, including their trade and investment with other people in the rest of the world. The exchange of goods and services among households and businesses is facilitated by a supply of money from the government’s central bank, and a set of public services and goods provided through the government using tax revenue and additions to the money supply issued by the central bank. The government’s monetary and fiscal policies influence the pace of economic growth and development, by helping people save and invest to improve their living standards during periods of economic expansion, and by influencing the depth and duration of recessions when people cut back on investment and spending. Growth and fluctuations both have large impacts on agriculture, food and health.