Course Learning Outcomes:

This course enables students to analyse the macroeconomic performance of various countries using formal analytical tools. It also allows them to evaluate important macroeconomic policies and their implications.

Course Modules:

The Labor Market:

Wage determination; wages, prices and employment; natural rate of unemployment; from employment to output.

Aggregate Demand and Aggregate Supply:

Derivation of aggregate demand and aggregate and supply curves; interaction of aggregate demand and supply to determine equilibrium output, price level and employment

Inflation, Unemployment and Expectations:

Philips curve; okun’s law; adaptive and rational expectations; policy ineffectiveness debate

Microeconomic Foundations:

  1. Consumption: Keynesian consumption function; Fisher’s theory of optimal intertemporal choice; lifecycle and permanent income hypotheses; rational expectations and random walk of consumption expenditure
  2. Investment: Determinants of business fixed investment; residential investment and inventory investment and q theory of investment
  3. Demand for money: Regressive Expectations Model; Portfolio Balance Approach; Baumol and Tobin’s transactions demand for money; precautionary demand for money; Friedman’s approach to demand for money

NOTE: The above modules give a rough idea about the topics covered in our Intermediate Macroeconomics-I course. Students will be given modules as per their respective Universities outline after prior discussion.