Coming soon
Advanced Macroeconomic Theory – II
- To help the students analyze the post Keynesian theories involving IS - LM analysis
- To acquaint the students with the ideas of New Classical and New Keynesian macroeconomics
- To develop an understanding of trade cycles and open economy macroeconomics
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Course |
Learning outcome (at course level) |
Learning and teaching strategies |
Assessment Strategies |
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Course Code |
Course Title |
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24DECO 802 |
Advanced Macroeconomic Theory –II (Theory) |
Students will- CO91: analyze equilibrium in goods market and money market and evaluate the effects of monetary and fiscal policies on these equilibria CO92:examine theories pertaining to new classical and new Keynesian macroeconomics CO93: analyze the relationship between inflation and unemployment and related policy measures. CO94:analyze various theories of trade cycles and related aspects CO95: analyze the open economy macroeconomics. CO96: contribute effectively in course-specific interaction. |
Approach in teaching: Interactive Lectures, Discussion, Case studies.
Learning activities for the students: Presentations, Assignments and Group discussions. |
Class activity, Assignments, Quiz and Semester end examinations. |
- Money market equilibrium: the LM curve – construction, factors that determine the slope of LM curve, factors that shift the LM curve
- Goods market equilibrium: the IS curve - construction, factors that determine the slope of IS curve, factors that shift the IS curve
- The IS and LM curves combined
- Factors that affect the equilibrium income and interest rate;
- Relative effectiveness of monetary and fiscal policy
- Monetarist-Fiscalist debate on Policy Activism
- New classical approach to macroeconomics
- Real Business Cycle models
- New Keynesian Macroeconomics- Sticky Price (Menu Cost) Model, Efficiency Wage Hypothesis
- Inflation –Unemployment trade off - The Phillips Curve
- The natural rate of unemployment hypothesis and Adaptive expectation hypothesis
- Relationship between short run and long run Phillips Curve
- Sacrifice Ratio and Policy of disinflation
- Concept and Phases of Trade Cycle
- Theories of Trade Cycle- Innovations theory, Monetary theory, Keynes’ theory, Kaldor’s Theory, Samuelson’s Multiplier-Accelerator Model and Hicks’ Theory
- Control of business cycles – relative efficacy of monetary and fiscal policies
- Mundell - Fleming model of a small open economy under imperfect and perfect capital mobility with fixed and flexible exchange rate regimes
- Analysis of effectiveness of monetary and fiscal policies
- Froyen, R. T., Macroeconomics: Theories and Policies, Pearson Education India; 10thedition, 2013
- Vaish, M.C. Macroeconomic Theory, Vikas Publishing House, New Delhi, 14th Edition, 2014
Suggested Readings:
- Branson, W. H., Macroeconomic Theory and Policy, Affilated East-west Press Pvt Ltd.; 3rd edition, 2005.
- Mankiw,N. G., Macroeconomics, Worth Publishers Inc.,10thedition, 2019.
- Edgemond, P., Macroeconomics, Prentice Hall of India, 1999.
- Rana, K.C.&Verma, K.N., Macroeconomic Analysis, Vishal Publishing Co., 11th edition, 2014.
- Ahuja, H. L.,Macroeconomics – Theory & Policy, S. Chand, 20th edition, 2019.
E Resources:
- Mundell, R.A. (1963). Capital mobility and stabilization policy under fixed and flexible exchange rates. Canadian Journal of Economics and Political Science, 29(4), 475-485.
- Fleming, J.M. (1962). Domestic financial policies under fixed and floating exchange rates. IMF Staff Courses.9. 369-379.
Journal:
- Journal of Macroeconomics, Elsevier
