Intermediate Macroeconomics - II

Paper Code: 
ECO 412
Credits: 
3
Contact Hours: 
45.00
Objective: 

This course is a sequel to Intermediate Macroeconomics I. In this course, the students are introduced to the long run dynamic issues like growth and technical progress. It also provides the micro-foundations to the various aggregative concepts used in the previous course.

9.00
Unit I: 
Economic Growth

Harrod-Domar model; Solow model; golden rule; technological progress and elements of endogenous growth.

 

9.00
Unit II: 
Consumption Function

Consumption: Keynesian consumption function; Fisher’s theory of optimal intertemporal choice; life-cycle and permanent income hypotheses; rational expectations and random-walk of consumption expenditure.

 

9.00
Unit III: 
Investment Function

Investment: determinants of business fixed investment; residential investment and inventory investment.

 

9.00
Unit IV: 
Fiscal and Monetary Policy

Active or passive; monetary policy objectives and targets; rules versus discretion: time consistency; the government budget constraint; government debt and Ricardian equivalence.

9.00
Unit V: 
Schools of Macroeconomic Thoughts

Classicals; Keynesians; New-Classicals and New-Keynesians.

 

Essential Readings: 

1. Dornbusch, Fischer and Startz, Macroeconomics, McGraw Hill, 11th edition, 2010.
2. N. Gregory Mankiw. Macroeconomics, Worth Publishers, 7th edition, 2010.
3. Charles I. Jones, Introduction to Economic Growth, W.W. Norton & Company, 2nd edition, 2002.

Academic Session: 
2018-19
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