After the end of this course, you will all be able to relate theoretical concepts with the happenings in the world which will further deepen your understanding of the subject.It acts as a bridge between the understandings of macroeconomics at High School level to application of the subject in events across the Globe
| Course Status : | Ongoing |
| Course Type : | Core |
| Duration : | |
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| Category : | |
| Level : | Undergraduate |
Unit-1: Macroeconomic Foundation
1.1 Concept of
markets in macroeconomics: commodity, money
& labor markets; concept
of aggregate demand-supply
& macro-equilibrium
1.2
Basics of economic
growth, business cycles
(recovery, prosperity, recession, depression); concept of ex-ante versus
ex-post, potential versus actual, nominal versus real outputs
1.3
Policy instruments: fiscal
policy versus monetary
policy; basics of open economy
macroeconomics and exchange
rate; inflation and deflation, supply
shock; unemployment
1.4
Development of macroeconomics: basic ideas of modern
macroeconomics (introduction to Classical-Keynesian synthesis) and its new
development (overview of New Keynesian/New
Classical/Monetarism).
2.1 Micro-foundation
of aggregate consumption
expenditure; subjective
versus objective factors
of consumption
2.2
Keynesian absolute income
hypothesis (properties of short run function, marginal
versus average propensity to consume and
their relationship); Kuznets
puzzle on consumption (long run constancy and short run variability)
2.3
Duesenberry approach: relative income hypothesis, ratchet
effect; Ando and Modigliani approach: life cycle hypothesis and its implication
2.4 Friedman’s permanent
income hypothesis; Hall’s
random walk hypothesis.
3.1
Derivation of saving
function from consumption (propensity to save); concept of capital (classical definition, stock versus flow concept, properties of capital)
3.2 Basics of the theory of investment (Neo-classical view
to determine level of investment); stock market and Tobin’s q
3.3
Keynesian theory: investment demand and marginal
efficiency of capital,
marginal efficiency of capital versus
marginal efficiency of investment)
3.4 Saving-investment puzzle:
paradox of thrift.
Part-B
4.1 Money and its functions: commodity versus fiat money
4.2 Quantity theories
(Fisher versus Cambridge
versions)
4.3 Liquidity preference: transactional and speculative/precautionary demand
4.4 Money supply determination and monetary aggregates.
5.1 Inflation and interest rates;
Fischer effect, ex-ante/ex-post real interest rates
5.2
Social costs of inflation: layman’s view and classical response, costs of expected/unexpected inflation,
benefits of inflation
5.3
Classical dichotomy and monetary neutrality; sources of inflation
(concept of demand
pull and cost-push
inflation)
5.4 Deflation and its costs;
concepts of structural inflation, disinflation/stagflation/ hyperinflation; seigniorage.
6.1 Product market equilibrium: derivation of IS curve including its slope and possible shifts.
6.2 Money market equilibrium: derivation of LM curve including its slope and possible
shifts;
6.3 Product and Money market equilibrium
1.
C T S Ragan and R G Lipsey: Economics, Pearson
2. P Samuelson and W Nordhaus: Economics, McGraw-Hill
3.
N G Mankiw: Macroeconomics, Worth
Publishers (Macmillan)
4.
W H Branson: Macroeconomic Theory
and Policy, East-West Press
5. R Dornbusch, S Fischer
and R Startz: Macroeconomics, McGraw Hill
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