ECON 102 · Year 1 · Semester 2 · 3 credits · Professional & Ethics
Principles of Macroeconomics
Master the macroeconomic engine—inflation, interest rate determination, and cyclical shocks—that dictates insurance solvency, liability discounting, and asset returns.
The Macroeconomic Balance: Solvency in an Age of Turbulence
When a sudden macroeconomic regime shift threatens Meridian Life & Casualty with multi-billion-dollar reserve deficiencies and mass policyholder lapses, new enterprise risk actuary Maya Lin must trace macroeconomic transmission channels from national accounts to global capital flows before the state regulator steps in.
At six thirty on a Tuesday morning, Maya Lin is summoned to the chief actuary's office. On the display screens, Meridian's quarterly claims across commercial auto and workers compensation are tracking twenty-two percent above baseline, while premium growth has stalled. The chief financial officer insists it is a random underwriting blip, but Maya suspects the problem is systemic across the entire national economy.
Transcript
At six thirty on a Tuesday morning, Maya Lin is summoned to the chief actuary's office. On the display screens, Meridian's quarterly claims across commercial auto and workers compensation are tracking twenty-two percent above baseline, while premium growth has stalled. The chief financial officer insists it is a random underwriting blip, but Maya suspects the problem is systemic across the entire national economy.
- Define Gross Domestic Product (GDP) using the expenditure, income, and value-added approaches.
- Distinguish between nominal GDP, real GDP, and the GDP deflator, computing real growth and economy-wide inflation.
- Derive the fundamental national accounting identity relating national savings, domestic investment, and net capital flows.
- Connect macroeconomic exposure bases like nominal GDP, aggregate payroll, and capital investment to property-casualty pricing and life insurer balance sheets.