Macro Economics- Mumbai University
1
M.A.PART - I
ECONOMIC PAPER - I
MACRO ECONOMICS
1. Basic Macroeconomics
Income and spending – The consumption function – Savings and investment – The Keynesian Multiplier – The budget –
Balanced budget : theorem and multipliers. Money, interest and income – The IS-LM model – adjustment towards equilibrium –
Monetary policy, the transmission mechanism and the liquidity trap –
Basic elements of growth theory : Neoclassical and endogenous. 2. Behavioural foundations of Macroeconomics
Consumption and savings – Consumption under certainty : The life-cycle and permanent income hypotheses – Consumption under uncertainty : The random walk approach – Interest rate and savings. – Money stock determination - The money multiplier – instruments of monetary control – Money stock and interest rate targeting.
3. Dynamic macroeconomics
The dynamic aggregate supply curve – The long-run supply curve – short and long run Phillips curves – Strategies to reduce inflation, money, deficit and inflation – The Fisher equation –
Deficits and money growth – The inflation tax, interest rates, deficit and debt – The instability of debt financing – Structuralist models of inflation and growth.
4. Open Economy Macroeconomics
The balance of payments and exchange rates – The current account and market equilibrium – The Mundell-Fleming models :
Fixed and flexible exchange rates. – The automatic adjustment process – Expenditure switching / reducing policies – Exchange rate changes and trade adjustments : Empirical issues – the monetary approach to the balance of payments – The PolakIMF model – Flexible exchange rates. Money and prices – exchange rate overshooting – Interest differentials and
2 exchange rate expectations – Exchange rate fluctuations and policy intervention.
5. The New Macroeconomics
Rational expectations – anticipated and unanticipated shocks –
Policy irrelevance : The Lucas Critique. Real business cycle theory – Propagation mechanism –
M.A.PART - I
ECONOMIC PAPER - I
MACRO ECONOMICS
1. Basic Macroeconomics
Income and spending – The consumption function – Savings and investment – The Keynesian Multiplier – The budget –
Balanced budget : theorem and multipliers. Money, interest and income – The IS-LM model – adjustment towards equilibrium –
Monetary policy, the transmission mechanism and the liquidity trap –
Basic elements of growth theory : Neoclassical and endogenous. 2. Behavioural foundations of Macroeconomics
Consumption and savings – Consumption under certainty : The life-cycle and permanent income hypotheses – Consumption under uncertainty : The random walk approach – Interest rate and savings. – Money stock determination - The money multiplier – instruments of monetary control – Money stock and interest rate targeting.
3. Dynamic macroeconomics
The dynamic aggregate supply curve – The long-run supply curve – short and long run Phillips curves – Strategies to reduce inflation, money, deficit and inflation – The Fisher equation –
Deficits and money growth – The inflation tax, interest rates, deficit and debt – The instability of debt financing – Structuralist models of inflation and growth.
4. Open Economy Macroeconomics
The balance of payments and exchange rates – The current account and market equilibrium – The Mundell-Fleming models :
Fixed and flexible exchange rates. – The automatic adjustment process – Expenditure switching / reducing policies – Exchange rate changes and trade adjustments : Empirical issues – the monetary approach to the balance of payments – The PolakIMF model – Flexible exchange rates. Money and prices – exchange rate overshooting – Interest differentials and
2 exchange rate expectations – Exchange rate fluctuations and policy intervention.
5. The New Macroeconomics
Rational expectations – anticipated and unanticipated shocks –
Policy irrelevance : The Lucas Critique. Real business cycle theory – Propagation mechanism –