Course Outline for Macro Economic Theory and Policy

Course outline 1. Cour Course se Tit Title le

 Macroeconomic  Macroeconomic Theory and Policy Policy Core Course for BM and HRM 2. Course Co urse Instru I nstructor ctor Arundhati Sarkar Bose 3. Objec Ob jectiv tivee

To understand How the economy functions at the macro level • Macroeconomic linkages of the economy • Macroeconomic policies in theory and practice • 4. Learnin !oals" The participants should be inspired to strive for excellence through an involved • continuous learning and sharing of learning with peers. This learning should enable the participants to take wellinformed decisions in simulated situations. Learning goals Quest for Excellence Glob Global al Min Mindset Functional Knowledge

Dimensions Standard of performance Identifying global opportunity Identifying conceptual framewor

Continuous learning Global local interplay !pplication of conceptual framewor

• •

Measures of #OL"

Quest for Excellence

Global Mind-set

Std. of  performance

!ontinuous learning

"dentifying #lobal loca ocal interplay global opportunity

$eriodic %ui&&es

$eriodic %ui&&es

$roblems and ' caselets given in end term exam

Functional Knowledge

"denti ntifying conceptual framework 

Application of conceptual framework 

(verall grade in the course

$. To%ics ). "ntroduction * Macroeconomic issues • Aggregation problem • !ircular flow of income involving households+ firms+ governments and • financial institutions.

,. Measuring income and inflation "ntroduction to national income accounting • - approaches to measuring aggregate income • Measuring inflation* #$ deflator+ !$" and /$". • -. "ncome determination and multiplier  Macroeconomic e%uilibrium • Multiplier 0 under different parametric conditions. • $aradox of thrift • Balanced Budget multiplier  • eficit financing of the budget • 1imitations in the operation of multiplier. • 2. #eneral e%uilibrium of the macro economy* 3closed economy4 Money + bonds and money market e%uilibrium and 1M • #oods market e%uilibrium and "S • #eneral e%uilibrium and introduction to fiscal and monetary policy • "nterest sensitivity of money demand and policy e ffectiveness • 1i%uidity trap and 5apan6s stagnation • 7iscal and monetary policy and their implication on stock prices • 8ational expectation and policy effectiveness • $rice flexibility and policy effectiveness • !redit creation and instruments of monetary policy • 9. The open economy Balance of payments and exchange rates • :xchange rate determination* the product market approach and asset market • approach :xchange rate regimes • B($ crisis • 7iscal and monetary policy under fixed and flexible exchange rates* The • Mundell 7leming approach Trillema of macroeconomic policy ob;ectives •

<. Macroeconomic policy experiences around the world* A pathology Stagflation in =S in )>?@s and policy responses • ebt crises in 1atin America 07irst generation model of currency crisis • !urrency crises in :urope in )>>, 0 Second generation model of currency • crises South :ast Asian !risis in )>>? 0 Third generation model of currency crisis • #lobal recessionary trends in late ,@@@s  debates over origin and policy •  prescriptions. ?. A criti%ue to macroeconomic policy choices in "ndia* $olicy choices before )>>) • $olicy choices after )>>) • &. References

). Macroeconomics by (liver Blancard ,. "nternational :conomics by $aul 8. rugman+ Maurice (bstfeld -. Selected Articles '. (edao) The course will be largely lecture based and will follow methods of analysis that are conventional in economics. !ase studies will supplement analytical understanding as and when re%uired. *. +valuation - ui&&es 0 ,@ marks each ) end term examination  2@ marks ,. !radin (attern Those who score -@C or below will receive 7+  or D The first -@C of students will receive A or AD A spread over at least 9 grades will be followed. 1-. Instructors availabilit) for uidance The instructor will be available on campus during the term to provide guidance. Students can meet he instructor in office+ contact on email and telephone. $hone >??)2<>?-?