Jaypee Business School A Constituent of Jaypee Institute of Information Technology

A-10, Sector 62, NOIDA, 201 307 India Course Description

Course Title: Macroeconomics

Course Code: 12PCGM01

Credits: 3

Session Duration: 90 Minutes

Name of the Faculty: Dr. Jhumur Sengupta Email ID: jhumur.sengupta@jiit.ac.in

Introduction Macroeconomics deals with the structure and performance of whole economies. In this course we will describe and analyze the factors that influence aggregate economic outcomes such as growth in national output and income, unemployment and inflation. Throughout the course, we will develop several micro-founded macroeconomic models, and the role of government policies to influence macroeconomic outcomes. Objectives:

To provide the students with an introduction to the basic macroeconomic principles; To enable students to appreciate the workings of real and money markets and the nature of equilibrium in each market; To emphasize the role of macroeconomic policies that affect internal and external deficits, inflation and growth of per capita income.

Text Book: Rudiger Dornbusch, Stanley Fisher and Richard Startz, Macroeconomics (Tenth Edition.), Tata Mcgrawhill Edition, 2004

Additional Readings and References: • Macroeconomics, Robert J. Gordon, 12th Edition, PHI • MacroEconomics, Samuelson, William D. Nordhaus, 19th Edition, Mc Graw Hill

Session Plan

Sessi Contents Readings Class on Activity 1 National Income Accounting: Textbook: Rudiger Discussion

The production of output and payments to Dornbusch, Stanley Fisher And factors of production, Outlays of and Richard Startz, Exercise components of demand, Some important Macroeconomics (Tenth identities, Measuring Gross Domestic Edition.), Tata Mcgrawhill Product Edition, 2004

Chapter 2 2 Income and Spending: Textbook: Rudiger Discussion

Aggregate demand and equilibrium Dornbusch, Stanley Fisher And output, The Consumption function and and Richard Startz, Exercise aggregate demand, The Multiplier, The Macroeconomics (Tenth Government sector, The Budget Edition.), Tata Mcgrawhill

Edition, 2004 Chapter 9

3 Aggregate Supply and Demand: Textbook: Rudiger Discussion The aggregate supply curve, The Dornbusch, Stanley Fisher And aggregate supply curve and the price and Richard Startz, Exercise adjustment mechanism, The aggregate Macroeconomics (Tenth demand curve, Aggregate demand policy Edition.), Tata Mcgrawhill under alternative supply assumptions, Edition, 2004 Supply-side economics, Putting aggregate Chapter 5 supply and demand together in long run.

4-5 Money, Interest, and Income: Textbook: Rudiger Discussion The goods market and the IS curve, The Dornbusch, Stanley Fisher And money market and the LM curve, and Richard Startz, Exercise Equilibrium in the goods and the money Macroeconomics (Tenth markets, Deriving the aggregate demand Edition.), Tata Mcgrawhill schedule, A formal treatment of IS-LM Edition, 2004 model. Chapter 10

6-7 Monetary and Fiscal Policy: Textbook: Rudiger Discussion Monetary policy, Fiscal Policy and Dornbusch, Stanley Fisher And crowding out, The Composition of output and Richard Startz, Exercise and the policy mix, The policy mix in Macroeconomics (Tenth action. Edition.), Tata Mcgrawhill

Edition, 2004 Chapter 11

8-9 Aggregate Supply: Wages, Prices and Textbook: Rudiger Discussion Unemployment: Dornbusch, Stanley Fisher And Inflation and unemployment, Stagflation, and Richard Startz, Exercise Expected inflation and the inflation Macroeconomics (Tenth expectations - Augmented Phillips Curve, The rational expectations revolution, The wage-unemployment relationship: Why are wages sticky? From Phillips Curve to the aggregate supply curve, Supply shocks.

Edition.), Tata Mcgrawhill Edition, 2004 Chapter 6

10 HBS Case Discussion 11 The Anatomy of Inflation and Textbook: Rudiger Discussion

Unemployment: Dornbusch, Stanley Fisher And Unemployment, Inflation, The anatomy of and Richard Startz, Exercise unemployment, Full employment, The Macroeconomics (Tenth costs of unemployment, The costs of Edition.), Tata Mcgrawhill inflation, Inflation and indexation: Edition, 2004 Inflation-proofing the economy, Is a little Chapter 7

inflation good for the economy? Political business cycle theory

12 Consumption and Saving: Textbook: Rudiger Discussion The life-cycle - permanent-income theory Dornbusch, Stanley Fisher And of consumption and saving, Consumption and Richard Startz, Exercise under uncertainty: The modern approach, Macroeconomics (Tenth Further aspects of consumption behavior. Edition.), Tata Mcgrawhill

Edition, 2004 Chapter 13

13 Investment Spending: Textbook: Rudiger Discussion The stock demand for capital and the flow Dornbusch, Stanley Fisher And of investment, Investment subsectors- and Richard Startz, Exercise Business fixed, residential and inventory, Macroeconomics (Tenth Investment and aggregate supply. Edition.), Tata Mcgrawhill

Edition, 2004 Chapter 14

14- The Demand for Money: Textbook: Rudiger Discussion 15 Components of the money stock, The Dornbusch, Stanley Fisher And

functions of money, The demand for and Richard Startz, Exercise money: Theory, Empirical Evidence, The Macroeconomics (Tenth income velocity of money. Edition.), Tata Mcgrawhill

Edition, 2004 Chapter 15

16- The Fed, Money and Credit: Textbook: Rudiger Discussion 17 Money and stock determination: The Dornbusch, Stanley Fisher And

money multiplier, The instruments of and Richard Startz, Exercise monetary control, The money multiplier Macroeconomics (Tenth and bank loans, Control of the money Edition.), Tata Mcgrawhill stock and control of the interest rate, Edition, 2004 Money stock and interest rate targets, Chapter 16 Money, Credit and Interest rates, Which targets for the Fed?

18- International Linkages: Textbook: Rudiger Discussion 19 The balance of payments and exchange Dornbusch, Stanley Fisher And

rates, The exchange rate in the long run, and Richard Startz, Exercise Trade in goods, Market equilibrium, and Macroeconomics (Tenth the balance of trade, Capital mobility, The Edition.), Tata Mcgrawhill Mundell-Fleming model: Perfect capital Edition, 2004 mobility under fixed exchange rates, Chapter 12 Perfect capital mobility and flexible exchange rates.

20 HBS Case Discussion

7. Evaluation Details

a. Teacher's Assessment 30% • Project 20% • Assignment 10%

b. Mid-Term Test 30% c. End-Term Test 40%

Assignment (10%) Students will be asked to use MS Excel and other statistical packages to solve assignment problems. They will be required to do these assignments individually and submit the same for evaluation. Project (20%)

Step 1: Decide the topic of Group Project. Step 2: Get approval of course coordinator before deadline. Step 3: Work on group project and submit only power point slides. Step 4: Incorporate changes in the project report on the basis of feed back given by the faculty and submit the group project report in time.