Advanced Macroeconomic Theory- I

Paper Code: 
24DECO 702
Credits: 
6
Contact Hours: 
90.00
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: 
  •  

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Course Code

Course Title

24DECO 702

Advanced Macroeconomic Theory –I

(Theory)

Students will-

CO67: analyze different aspects of national income accounting

CO68:evaluate different aspects of income consumption relationship

CO69: analyze demand for money and supply of money, interest and investment

CO70: critically analyze classical macroeconomics.

CO71: analyze Keynesian economics

CO72:contributeeffectively 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.

 

18.00
Unit I: 
National Income Accounting
  • National income – Aggregates
  • Circular flow of income
  • Measurement of National Income
  • Recent Changes in National Income Estimation in India,
  •  National Income and Economic Welfare,
  • Flaws in conventional system of National Income Accounting,
  • Green Accounting.

 

18.00
Unit II: 
Income Consumption Relationship
  • Keynes’ Psychological law of Consumption;
  • Short run and Long run consumption functions;
  • Kuznets’ Consumption Puzzle,
  • Irving Fisher and Inter-temporal Choice;
  • Consumption function hypotheses–Absolute Income Hypothesis, Relative Income Hypothesis, Life-Cycle Hypothesis and Permanent Income Hypothesis

 

18.00
Unit III: 
Money, Interest and Investment
  • Demand for Money–Classical and Keynesian Approach; 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
  • Interest Rate - Monetary Equilibrium & Rate of Interest, Interest Rate theories – Classical theory, Loanable Funds theory & Liquidity Preference theory.
  • Theory of Investment - Components of investment; Marginal efficiency of capital and Marginal efficiency of investment; Accelerator theory

 

 

18.00
Unit IV: 
Classical Macroeconomics
  • Simple Classical Model –determination of equilibrium output and employment;
  • Say’s law of Market and Quantity Theory of Money;
  • Effect of - Changes in money supply, labour supply, labour demand and rigid wages - on the full employment equilibrium values;
  • Classical Model with savings and investment
  • Criticisms of the Classical model

 

18.00
Unit V: 
Keynesian System
  • Equilibrium in the Product Market – The aggregate demand and aggregate supply approach, Savings- Investment approach;
  • Multiplier-  Meaning & Working,
  • Concept of Static and Dynamic Multiplier
  •  Government Expenditure Multiplier, Tax Multiplier, Balanced Budget Multiplier;
  •  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, 2019.

E Resources:

  • Changes in Methodology and Data Sources in the New Series of National Accounts, Base Year 2011-12, June 2015, Ministry of Statistics &Programme Implementation, India.

https://epgp.inflibnet.ac.in/Home/ViewSubject?catid=NEp/xikgBgNtfA+sgFQAcA==

Journal:

  • Journal of Macroeconomics, Elsevier

 

 

Academic Session: 
2024-25
  • Printer-friendly version
  • PDF version