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Indian Institute of Science Education and Research Bhopal

HSS 207: Macroeconomics (1)

• Introduction
• Consumption, saving and investment functions
• Joint equilibrium in goods and financial markets
• Inflation and unemployment
• Open economy macroeconomics

Introduction: Macroeconomic aggregates; sectoral contributions to domestic product; international comparisons and purchasing power parity; closed and open economies

Consumption, saving and investment functions: Average and marginal propensities to consume and save; aggregate demand; the simple Keynesian closed economy equilibrium; the multiplier; government consumption and taxation

Joint equilibrium in goods and money markets: Demand for liquidity; the IS-LM model

Inflation and unemployment: Measurement of inflation; inflationary expectations and aggregate demand; the aggregate supply curve; the expectations-augmented Phillips curve; measuring unemployment in India

Open economy macroeconomics: External and internal balance; the Balance Payments; trade tariffs, nominal and effective rates of protection; non-tariff barriers

Suggested Books:

• Dornbusch, Rudiger, Stanley Fischer and Richard Startz. Macroeconomics (TMH, Eleventh edition, 2010)
• Olivier Blanchard. Macroeconomics (PHI, Fifth Edition,2010)
• N. Gregory Mankiw. Macroeconomics (Worth Publishers, Seventh edition, 2010)

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