MACROECONOMIC THEORY - I

Paper Code: 
ECO 122
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 

To acquaint the students, with the concepts of macro economics.

12.00
Unit I: 
National Income

Circular flow of income in two, three- and four-sector economy; National income aggregates – measurement and interrelationship; National income and welfare.

12.00
Unit II: 
Classical Macro Economics

Simple Classical model –equilibrium output and employment; Quantity Theory of Money; Classical theory of interest rate; policy implications of the Classical equilibrium model; Classical model with savings and investment.

12.00
Unit III: 
The Theory of Consumption

Keynes’ psychological law of consumption; short run and long run consumption function; Income consumption relationship – absolute income, relative income, life cycle and permanent Income hypothesis; consumption function puzzle; Kuznets’ consumption function and Kuznets’ findings.

12.00
Unit IV: 
The Theory of Investment Spending

Components of investment; marginal efficiency of capital and investment; the accelerator theory.

12.00
Unit V: 
The Keynesian System

Equilibrium in the Product Market – The aggregate demand and aggregate supply approach, Savings- Investment approach; Changes in equilibrium income – the Multiplier; The Keynesian theory of interest rate and money demand.

Essential Readings: 
  1. Rastogi Saurabh and Aiyar Shekhar, National Income and Accounting, Lotus Books.
  2. Richard,T.Froyen, Macro Economics: Theories and Policies, Pearson Education, 2003
  3. Branson, W. A., Macroeconomic theory and policy, (3rd edition), Harper and Row, New York
  4. Gregory Mankiw, Macroeconomics, CBS Publishers, New Delhi,1992.
  5. Eric Pentacost, Macro Economics: An Open Economy Approach, Macmillan, Indian Edition, New Delhi, 2000.
  6. P.Edgemond, Macreconomics, PHI, New Delhi, 1999.
  7. Robert J Gorden, Macroeconomics, Harper Collins, 1994.
  8. M.G.Mueller, Readings in Macroeconomics, II Edn, Surjeet Publications, 1978.
  9. A.H.Hansen, A Guide to Keynes, McGrawHill, London, 1953.
  10. Prabhat Patnaik, Macro Economics, Oxford University Press, Chapter by Amitava Krishna Dutt(1995), New Delhi, 1995.
  11. Ahuja. H. L., Macroeconomics – Theory and Policy, S. Chand & Company Ltd.
Academic Session: 
2017-18
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