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MEAP-MB16
MBA 2016-18: Term-II

Course Name - Macro Economic Analysis and Policy (MEAP)
Credits3
Faculty NameSagarika Mishra
ProgramMBA (Section E and Section F)
Academic Year and Term2016-17 Term-II

Course Description

This course would include discussion on macroeconomic variables and their measurement. The course will discuss fundamental issues existing in macroeconomic domain and their respective policy direction. The discussion would mostly focus on Indian as well as world macroeconomic environment – which would enable the students to relate and possibly apply what is taught - to the real life events; it would certainly make them appreciate the subject of discussion. This course demands serious classroom participation with an objective to use the essence of course covered - for managerial decision making so as to foster business expansion and strategy.

Objective:

1. Will enable the students to understand and analyse macro-economic variables
2. Will enable the students to understand the drivers of economic growth
3. Will enable the students to understand monetary and fiscal policies
4. Will enable the students to understand policy trade-offs

3. Session Plan
Session-1Understanding Macroeconomics and its relevance
    What is Macroeconomics all about?
    What are the distinctions between micro and macroeconomics?
    What are the different types of economic thoughts?
    What are the key macro-economic variables?
      Readings: Chapter - 4 of the text book
      Sessions 2-3Measuring Macroeconomic Variables
        Measurement Gross Domestic Product (GDP), Gross National Product (GNP), Net National Product (NNP), Real GDP, Nominal GDP, Price Indexes, GDP Deflator, Inflation, Unemployment.
        (Approaches of Measurement : Income Method, Value Added Method, Expenditure Method),
        Readings: Chapter -5 of the text book
        Session 4-5Understanding Consumption and Investment
          Consumption and Investment Theory, Keynes Consumption Function, Saving Function, Marginal Propensity to Consume, Marginal Propensity to Save, Life Cycle Theory of Consumption, Permanent Income Hypothesis, Investment, Types of Investment, Keynes Theory of Investment, Samuelson’s Theory, Q-Theory of Investment.
          Readings: Chapter-6 of the text book
          Session 6-7Understanding Aggregate Demand and Supply
            Aggregate Demand and Aggregate Supply Model Theory of Aggregate Demand, Shifts in Aggregate Demand, Multiplier Effect in aggregate Demand, Equilibrium Level of Income. AD - AS Model- Classical view, Keynesian view, Comparative Statics.
            Readings: Chapter-7 of the text book
            Session 8Economic Dimensions of business cycle
              Theories of Business Cycle. Financial Crises and business cycles
              Readings: Chapter-7 of the text book
              Session 9-10Financial Markets in Macroeconomic System
                Money, Banking and Financial Market Definition of Money, Types of Money, Demand for Money: Classical, Keynesian Theory, Banking, Role Central of Bank, Credit Creation, Money Multiplier, High Powered Money, Term Structure.
                Readings: Chapter -9 of the text book
                Session 11-12Macro Trade-offs
                  Inflation, Unemployment Definition of Inflation, Types of Inflation, Causes of Inflation, Effects of Inflation, Unemployment, Types of Unemployment, Phillip’s Curve, Okun’s Law, Sacrifice Ratio.
                  Readings: Chapter -15,16 of the text book
                  Session 13-14Understanding Fiscal and Monetary Policy Instruments
                    Macroeconomic Policies Policy, Lags in Policy, Fiscal Policy, Instruments of Fiscal Policy, Government Budget Multiplier, Budget, Types of Budget, Zero Based Budgeting. Monetary Policy, Instruments of Monetary Policy, Role of RBI in Conducting Monetary Policy.
                    Readings: Chapter-10 of the text book
                    Session-15-16Understanding the Complexities of Open Economy
                      International Economics, Balance of Payment, Exchange Rate, Real Exchange Rate, Purchasing Power Parity, Exchange Rate Determination, Types of Exchange Rate Regime: Fixed , Floating, Managed Floating Exchange Rate System. Theories of International Trade, Marshall – Lerner Condition.
                      Readings: Chapter-14 of the text book
                      Session 17-18IS & LM framework
                      Goods Market & Money Market Equilibrium, Slope of IS & LM and effectiveness of Monetary & Fiscal Policy
                      Readings: Chapter- of the text book
                      Session 19-20Presentation of the project work
                      4. Evaluation Criteria

                      Class Participation: 10%
                      (The component will be directly proportional to the number of classes attended)

                      Project work: 20%
                      (The project to be given will be a team based one where the team needs to prepare a maximum of 5 pages of report, and present the same in class. Each member should able to present the project work. The course facilitator will decide who will present the group work)

                      Quizzes: 30%
                      (Two multiple choice questions with negative marks with 15% weightage each)

                      End-Term Exam: 40%
                      (The portion will be entire course)

                      5. Readings and References
                      Mandatory readings
                      1. Macroeconomics: Paul A. Samuelson, William D. Nordhaus (19th edition), 2012. McGraw Hill.

                      Other readings will be provided by the course instructor depending on the need.


                      Further Optional Readings:
                      1. Principles of Economics: Mankiw (Fourth Edition), 2007. Thomson (South-Western)
                      2. Macroeconomics: Mankiw (Sixth Edition), 2006. Worth Publishers
                      3. Macroeconomics - Abel and Bernanke (Fourth Edition)
                      4. Macroeconomics: Dornbusch, Fischer, and Startz (Ninth Edition), 2004. Tata McGraw-Hill
                      5. Macroeconomics: Principles and policy: Baumol and Blinder (Ninth Edition), South-Western Publishing.

                      6. Academic Integrity

                      You must demonstrate high order of academic integrity being attentive in the class and regularly read the prescribed reading material. In case of group assignment, all members of the group should contribute to the preparation of the report and you are expected to write the report in your own style and language. Your basic purpose should be to learn, without resorting to any unfair means for getting a higher score/grade.

                      Created By: Alora Kar on 09/13/2016 at 12:17 PM
                      Category: BM-I 2016-18 T-II Doctype: Document

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