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.
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:
- Consumption: Keynesian consumption function; Fisher’s theory of optimal intertemporal choice; lifecycle and permanent income hypotheses; rational expectations and random walk of consumption expenditure
- Investment: Determinants of business fixed investment; residential investment and inventory investment and q theory of investment
- 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.
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