Syllabus
Module I: Introduction to Macroeconomics Macroeconomics and its scope - Microeconomics and macroeconomics – Macroeconomic models – Types of variable: Stock and flow, endogenous and exogenous, exante and expost – Static, comparative static and dynamic – Equilibrium and disequilibrium.
Module II: National Income National income concepts and their interrelationships: – GNP - Nominal versus real GNP - Potential versus Actual GNP – Green GNP - GNP deflator – NNP, GDP, NDP, NI, PI, and DPI – National income identity-two sector, three sector and four sector economy- Methods of estimating national income – Difficulties in the estimation of national income.
Module III: Classical Macro Economic Model
Classical macroeconomics:– Say‘s Law of Markets – Wage-price flexibility – Classical model of
output and employment – Classical theory of price level detrminaiton – Quantity theory of Money –
Fisher‘s Equation of Exchange – Cash Balance Approach - Neutrality of Money – Money illusion –Pigou effect – Real Balance effect – Classical dichotomy – Concept of full employment – voluntary
unemployment.
Module IV: Keynesian Theory and Income Determination: The background of Keynesian revolution – Principle of effective demand – Aggregate demand and its components – The consumption function – Fundamental Psychological Law – APC and MPC – Saving function – APS and MPS – The Investment function – Determinants of investment – Saving and Investment equality – MEC – MEI and roel of expectations – The multiplier – Income determination in two and three sectors (Keynesian croas diagram and algebra) – Role of government – fiscal policy – Objectives of fiscal policy - Instruments of fiscal policy – Fiscal multipliers – tax multiplier, government expenditure multiplier, and balanced budget multiplier – Inflationary and deflationary gaps – The concept of underemployment equilibrium – wage-price rigidity – Keyne‘s theory of employment.
Module V: Theories of consumption fucnction:
The absolute income hypothesis - the Relative income hypotheses - The permanent income and
life cycle hypothesis – random walk hypotheses - The Ratchet effect.
References:
1. Edward Shapiro – ‗Macro economics‘ Oxford University press.
2. Gregory Mankiw – ‗Macro economics‘ – 6th Edn. Tata McGraw Hill.
3. Richard T. Frogmen – ‗Macro economics‘, Pearson education.
4. Eugene Diutio – Macro economic Theory, Shaum‘s Outline series. Tata McGraw Hill
5. Errol D‘Souza – ‗Macro Economics‘ – Pearson Education 2008.
6. Abhijit Kundu (2009) : Methodology and Perspectives of Social Science – Pearson Education
8 Dernbusch, Fischer and Startz-MacroEconomics-Tata McGraw –Hill