Macroeconomic Theory -II

Paper Code: 
ECO 222
Credits: 
4
Contact Hours: 
60.00
Objective: 

To acquaint the students about the importance of various issues related to macroeconomics.

12.00
Unit I: 
Post- Keynesian theories of determination of income and output

The IS LM model; graphic and algebraic derivation of IS and LM curves; factors that affect the equilibrium income and interest rate; relative effectiveness of monetary and fiscal policies.

12.00
Unit II: 
New Classical and New Keynesian Macroeconomics

Monetarist-Fiscalist debate on Policy Activism. New classical approach to macro economics. Real Business Cycles, New Keynesian Macroeconomics- Sticky Price (Menu Cost) Model, Efficiency Wage Hypothesis.

12.00
Unit III: 
Inflation and unemployment

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.

12.00
Unit IV: 
Theories of Trade Cycle

Concept and Phases of Trade Cycle, Theories of Trade Cycle- Kaldor’s Theory , Samuelson’s Multiplies-Accelerator Model, Hicks Theory ; Goodwin’s model; Control of business cycles – relative efficacy of monetary and fiscal policies.

12.00
Unit V: 
Open Economy Macroeconomics

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.

Essential Readings: 
1. Rastogi Saurabh and Aiyar Shekhar, National Income and Accounting, Lotus Books.
2. Richard,T.Froyen, Macroeconomics: Theories and Policies, Pearson Education India;      10 edition ,2013.
3. Branson, W. H., Macroeconomic Theory and Policy, Affilated East-west Press Pvt            Ltd.; 3rd edition, 2005.
4. Gregory Mankiw, Macroeconomics, Worth Publishers Inc., U.S., 5th edition, 2002.
5. Edgemond, P., Macroeconomics, PHI, New Delhi, 1999.
6. Vaish, M.C. Macroeconomic Theory, Vikas Publishing, New Delhi, 14th Edition, 2014.

 

Academic Session: 
2018-19
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