Brief review of macroeconomic revolutions, classical new classical, monetarist and activist contributions. Microeconomic foundations for Macroeconomic Analysis.
Macroeconomic Disequilibrium models. Static Model: Consumption investment and money demand functions in classical, Keynesian and monetarist frameworks, IS-LM model.
Closed Economy Macroeconomics: Aggregate demand and fiscal policy, aggregate demand and money supply, relative effectiveness of fiscal and money policies in cases of interest inelastic investment demand and liquidity trap, arguments of ‘crowding out’ and
Ricardian equivalence’ against fiscal policy, supply-side view of government taxation.
Crowding in hypothesis.
Open Economy Macroeconomics: Various Theories of Balance of Payments. Determination of equilibrium exchange rate. Exchange Rate Management under fixed, floating and managed float system. Mundell- Fleming Model.
Effectiveness of Monetary and Fiscal Policies under various exchange rate Rational Expectations And Policy Implications: Expectations augmented Phillips Curve. Rational expectations hypothesis and policy ineffectiveness proposition.
Trade Cycles: Major trade cycle theories, Castrophy theory, Kaldor models, Hicks models, Random walk model, Multiplier accelerator model. Real business cycle.
Govt. Debt and Ricardian equivalence inflation of unemployment trade of monetary and fiscal policy; failure and unemployment, short term long tern aggregated supply curves and effectiveness of policy. What we know what we do not know about macroeconomic
Abel, A. and Ben S. Bernanke (1998). Macroeconomics. 3rd edition, New York: Addison-Wesley.