8/11/2019 Macroeconomics Course Outline 2014

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Course Title   : Macroeconomics 

Credits : 3

Type : Compulsory

Pre-Requisites : Successful completion of the Term-I Microeconomics course

Term : II

Year : 2014-15

Faculty : Prof !eena Mary "apen

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Introduction & Objective(s):

Course Descrition: Macroeconomics is the study of the $eha%ior of the economy as a &hole

The recent 'lo$al financial crisis has e(posed the frailty of many firms &ho could not

anticipate the fast chan'in' $usiness en%ironment and &ere una$le to react effecti%ely ) study

of macroeconomics helps a $usiness mana'er to e%aluate the impact of the chan'in' $usiness

en%ironment on decision ma*in' +hat are the useful information contained in ,P. CPI and

+PI data announced $y the 'o%ernment/ 0o& does a chan'e in ta( rates announced in the

union $ud'et affect ,P/ 0o& does monetary policy action $y the R1I influence prices/

+hat is the effect of a chan'e in interest rates on the rupee-dollar e(chan'e rate/ 0o& do a

chan'e in 'lo$al factors such as oil prices and the fed fund rate affect the domestic $usiness

en%ironment/ Such questions ha%e critical ramifications for any $usiness and can $e ans&ered

 $y a study of macroeconomics Moreo%er macroeconomics also satisfies an intellectualcuriosity for ans&ers to many important pro$lems faced $y the economy and society +hy do

crises occur/ +hat &ould $e the role of India in the chan'in' 'lo$al scenario/

Macroeconomics can pro%ide some solutions and i'nite a thirst to search for many others

Course Objectives: The $asic o$2ecti%e of this course is to pro%ide students &ith the s*ills to

ma*e intelli'ent $usiness decisions in a rapidly chan'in' $usiness en%ironment Successful

completion of the course &ill ena$le the students to understand the &or*in' of an economy.

identify the ma2or macroeconomic 'oals and pro$lems. understand the policies a%aila$le to

'o%ernments and central $an*s to achie%e these 'oals and sol%e the pro$lems and most

importantly to e%aluate the impact of such policies on $usinesses +e &ill use a 2udicious mi(

of theory and real-&orld e(amples to understand the relationship $et&een the concepts co%eredin the course and current economic issues The o$2ecti%es in particular are:

45 To e(pose the students to the fundamental principles and issues of macroeconomic

theory

65 To e(plore the relationship $et&een macroeconomic theory and policy formulation

35 To ena$le application of macroeconomic tools and techniques in anticipatin' chan'es in

the macroeconomic en%ironment that &ill help in ta*in' effecti%e $usiness decisions

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!eda"o"#: !ectures7 Classroom iscussions7 Pro2ect Report and Presentation $y Students

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Indian Institute o$ Mana"ement %o'iode

Course Outine

8/11/2019 Macroeconomics Course Outline 2014

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*e+t ,oo:

Macro "C89: ) South-)sian Perspecti%e $y +illiam ) Mc"achern  ) Indira. Cen'a'e

!earnin'. 6;46 MI5

Otiona eadin":

• Fault !ines: 0o& 0idden Fractures Still Threaten the +orld "conomy $y Ra'huram Ra2an

• The )'e of Tur$ulence: )d%entures in a 9e& +orld $y )lan ,reenspan

• "nd This epression 9o&< $y Paul =ru'man

• )nimal Spirits: 0o& 0uman Psycholo'y ri%es the "conomy. and +hy It Matters for ,lo$al

Capitalism $y ,eor'e ) )*erlof and Ro$ert > Shiller 

• Ma*in' ,lo$ali?ation +or* $y >oseph " Sti'lit?

• +hy 9ations Fail: The 8ri'ins of Po&er. Prosperity. and Po%erty $y aron )cemo'lu and

>ames Ro$inson

• Ima'inin' India: The Idea of a Rene&ed 9ation $y 9andan 9ile*ani

• India @n$ound: The Social and "conomic Re%olution from Independence to the ,lo$al

Information )'e $y ,urcharan as

• 1rea*out 9ations: In Pursuit 8f the 9e(t "conomic Miracles $y Ruchir Sharma

• India )fter the ,lo$al Crisis $y Shan*ar )charya

.se$u bo"s and /ebsites:

• http:AA're'man*i&$lo'spotinA

• http:AAa2ayshah$lo'$lo'spotinA

• http:AA&&&economistcomA 

• http:AAindianeconomyor'A 

• http:AA*ru'man$lo'snytimescomA

• http:AAnourielrou$ini$lo'spotinA

• http:AA&hynationsfailcomA 

• http:AA&&&frea*onomicscomA$lo'A

• http:AA&&&%o(eucomA 

• http:AA&&&na*edcapitalismcomA

vauation c'eme:

Mid-term e(amination : 6B

"nd-term e(amination : 3;

Dui??es : 6;

Report and Presentation : 6;

Class participation : B

8/11/2019 Macroeconomics Course Outline 2014

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ession Detais

ession *oic eadin"s

1 Introduction Central Issues in Macroeconomics

• 8%er%ie& of the course• Pro$lems of the Indian 'lo$al economies

• +hy they matter to the $usiness mana'er 

MI. Ch B

2- The ata of Macroeconomics

• Measurin' economic acti%ity: ,P

• Measurin' price le%el: +PI CPI

• Measurin' 2o$lessness: @nemployment rate

MI. Ch E.

 

4 )''re'ate "(penditure

• Consumption Function. )%era'e Mar'inal

Propensities to Consume

• In%estment Function

• ,o%ernment Spendin' and 9et "(ports

MI. Ch G

5 )''re'ate "(penditure and emand

• "quili$rium Income etermination

• )utonomous Spendin' Multiplier

• )''re'ate emand Cur%e

MI. Ch 4;

3 )''re'ate Supply

• !a$or and )''re'ate Supply

• Short Run )''re'ate Supply Cur%e

• !on' Run )''re'ate Supply Cur%e

MI. Ch 44

- Fiscal Policy

• Fiscal Policy Tools• Ta( Multiplier 

• )utomatic Sta$ili?ers

MI. Ch 46

6 Fiscal Impact of $ud'et

• Fiscal deficit

• Cro&din' 8ut

• T&in eficit

MI. Ch 43

10-11 Financial Institutions

• "%olution of Money

• The Role of Central 1an* Its Tools to Control

Money Supply

• Role of 1an*s- Money Multiplier 

MI. Ch 4H-4B

12 Money Mar*et

• Money emand. Money Supply Interest Rate

• Money and )''re'ate emand

• Monetary Policy Tar'ets

MI. Ch 4

1-14 The 8pen "conomy

• International Trade- )d%anta'es and isad%anta'es

• 1alance of Payments

• Fi(ed and Fle(i$le "(chan'e Rates

MI. Ch 4. 4G

15   • Is ,ross omestic Product a 'ood measure/ Readin' !ist to $e

)ssi'ned R!)5

13   • IndiaJs recent e(perience &ith hi'h inflation R!)

1   • "mployment in India: Is India !eadin' to >o$less

,ro&th/

R!)

8/11/2019 Macroeconomics Course Outline 2014

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1   • Inflation Tar'etin' and Choice of inde( for India R!)

16   • Factors dri%in' domestic and forei'n in%estments in

India

R!)

20   • Recent Fiscal eficit Crisis in India R!)

21   • Recent Current )ccount eficit crisis in India R!)

22   • The impossi$le trinity dilemma R!)

2   • Recent 'ro&th slo&do&n in India R!)

24   • IndiaKs Role in the Chan'in' ,lo$al Macro

"conomic Scenario

R!)