ABSTRACT
Contemporary labor economists have a particular interest in the microeconomic aspects of labor-market behavior. Yet the field of labor economics is now necessarily broader than the topics that lend themselves to being examined with microanalytic tools. Decision making at the level of the household and the business firm takes place within the framework of both the domestic and the global macroeconomy. To be truly relevant, the microeconomic analysis of labor markets must be firmly tethered to knowledge about critical macroeconomic magnitudes, the most important of which are the levels of gross domestic and national product (or aggregate demand), employment, and unemployment.
