Macroeconomic Theory - I

Paper Code: 
24ECO 122
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 
  1. To introduce the students to national income accounting.
  2. To acquaint them with the theories of consumption and investment as well as money demand and supply.
  3. To make them understand the models of income and output determination under classical and Keynesian schools of thought. 

 

Course Outcomes: 

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Course Code

Course Title

24ECO 122

Macroeconomic Theory -I

(Theory)

Students will-

CO7: analyze different aspects of national income accounting.

CO8: evaluate consumption patterns by studying various theories of consumption

CO9: analyze demand for money, supply of money and investment.

CO10: analyze various aspects of classical model

CO11: analyze the Keynesian model

CO 12: contribute effectively in course-specific interaction.

Approach in teaching: Interactive Lectures, Discussions, Case studies.

 

Learning activities for the students:

Presentations, Assignments and Group discussions.

Class activity, Assignments, Quiz and Semester end examinations.

 

12.00
Unit I: 
National Income Accounting
  • National income - concepts and measurement
  • Recent Changes in National Income Estimation in India
  • Interrelationship between National Income and Economic Welfare
  • Flaws in conventional system of National Income Accounting
  • Green Accounting.

 

12.00
Unit II: 
Theory of Consumption
  • Keynes’ psychological law of consumption;
  • short run and long run consumption functions;
  • Kuznets’ consumption Puzzle,
  • Irving Fisher and Inter-Temporal Choice;
  • Consumption hypotheses–Absolute Income, Relative Income, Life-Cycle and Permanent Income.    

 

12.00
Unit III: 
Theory of Demand for Money

   ·Classical, Keynesian and Post Keynesian Theories of demand for Money (Baumol, Tobin and Friedman.)

  ·  Supply of Money

       RBI’s approach to money supply, H theory of Money Supply.

 ·Theory of Investment

Components of investment; marginal efficiency of capital and marginal efficiency of investment; Accelerator theory.

12.00
Unit IV: 
Classical Macroeconomics

·    Simple Classical model –equilibrium output and employment;

·    Say’s law of Market and Quantity Theory of Money;

  • Effect of changes on the full employment equilibrium values; Classical theory of interest rate; Classical model with savings and investment.
12.00
Unit V: 
Keynesian System

·       Equilibrium in the Product Market – The aggregate demand and aggregate supply approach

·       Savings- Investment approach

·       Multiplier-  Working, Static and Dynamic and different concepts of multipliers

  • Keynesian Theory of Employment, Complete Keynesian Model.
Essential Readings: 
  1. RastogiSaurabh and AiyarShekhar, National Income and Accounting, Lotus Books.
  2. Richard,T.Froyen, Macroeconomics: Theories and Policies, Pearson Education India; 10 edition ,2013.
  3. Vaish, M.C. Macroeconomic Theory, Vikas Publishing House, New Delhi, 14th Edition, 2014.

 

References: 

Suggested Readings:

  1. Branson, W. H., Macroeconomic Theory and Policy, Affilated East-west Press Pvt Ltd.; 3rd edition, 2005.
  2. Gregory Mankiw, Macroeconomics, Worth Publishers Inc.,5th Revised edition, 2002.
  3. Edgemond, P., Macroeconomics, PHI, New Delhi, 1999.
  4. Rana, K.C.&Verma, K.N., Macroeconomic Analysis, Vishal Publishing Co., 11th edition, 2014.
  5. Ahuja, H. L.,Macroeconomics – Theory & Policy, S. Chand, 20th edition, 2019E Resources:

Journal:                                               

  • Journal of Macroeconomics, Elsevier

 

Academic Session: 
2024-25
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