MEAP-EMBA-19

MEAP-EMBA-19
MBA(Exe.) 2019-20: Term-II

Course Name - Macro Economic Analysis and Policy (MEAP)

Credits	3
Faculty Name	Biswa Swarup Misra
Program	EMBA
Academic Year and Term	2019-20 , Term - II

Course Description
Coverage of this course would include discussion of macroeconomic fundamentals, various macroeconomic policies (Monetary and fiscal), policy options under alternate macroeconomic scenario, Inflation-Unemployment tradeoff, open economy macroeconomics and exchange rate policies. The discussion will be centering round the Indian context so that participants can relate what is covered in the class room to what is happening around them in the real life situations and appreciate the subject of discussion.
Objective:
Having dealt with the principles guiding decision making of the individual economic agents in your Microeconomics for Managers course, we would shift our focus to discuss the macro economic factors, which influence business outlook in this course. Every Business operates with an outlook. The exposure to the working of the macro economy helps one to shape the future outlook of business.

Macroeconomic concepts involve abstractions as one deal with economic aggregates such as GDP, Inflation, and Exchange rate etc. Though abstract, we may be very much conversant with some of the macroeconomic concepts in our day-to-day life or can relate to them very easily. For instance, consider the case of the inflation, a macroeconomic aggregate. Inflation is measured by the rise in the price index. We do not observe the price index (an abstraction), though we can observe the prices of individual items such as price of a candle, watch etc. which contribute to the price index. Nonetheless, many people (especially the salaried class) can easily relate to the price index!

We would be primarily interested in three macroeconomic parameters i.e. growth, employment and inflation as well factors driving internal and external stability of a country. The discussions in the class would be oriented to appreciate the factors governing the above three parameters.

Further details about the Course can be seen from the Session Plan.

2. Student Learning Outcomes
1. Be able to ….. Make Sense of the Global as well as Domestic Macroeconomic Scenario

Be able to

…. Understand the implications of the macroeconomic environment for Business

3. Be able to …. Appreciate the contents reported in Media on Macroeconomic Issues

3. Session Plan

Session-1	What Macroeconomics is all about Why we should be studying macroeconomics Distinction between Micro and Macro economics Important Macroeconomic Variables: Growth, Inflation, Unemployment Distinction between Stock and Flow, Output and Wealth Kinds of Macroeconomic Policy:
Sessions 2-6	Measuring the Value of Economic Activity Concepts of GDP, GNP, NDP, NNP Nominal vs. real GDP GDP at basic price, market price and factor cost Interrelations amongst different concepts of GDP GDP as a measure of economic welfare Reading Principles of Economics - Mankiw (4th edition) Chapter- 23 Macroeconomics-Oliver Blanchard (4th edition)
Session-7	Inflation: Meaning and Measurement Inflation Measurement in India- GDP Deflator, WPI, CPI-IW,CPI-AL, CPI-UNME, CPI-Rl Biases in measurement of Inflation Costs of inflation Reading Principles of Economics - Mankiw (4th edition) Chapter-24&35
Session-8	Unemployment : Frictional, Structural and Cyclical Natural rate of unemployment Unemployment Measurement in India - Usual Status, CDS, CWS Principles of Economics - Mankiw (4th edition) Chapter- 23 Macroeconomics - Mankiw (6th edition) Macroeconomics- Dornbusch, Fisher and Statrtz (9th edition)
Session-9	Long run determinants of Growth Concept of Natural Rate of Output Catch up effect and Convergence of Income across nations
Session-10-11	Concept of Equilibrium Income and Multiplier Schools of Macroeconomic Thought –Mercantilism, Classical, Marxian, Neoclassical and Keynesian Fiscal Policy and Its Limitations
Session 12-14	Stylised facts about Short run economic fluctuations Predicting business cycles with leading Indictor Analysis. Framework of Aggregate Demand and Aggregate supply to study business cycles. Aggregate Supply Models of aggregate supply Sticky wage, Sticky Price and the Imperfect-Information models Aggregate supply Curve- Shart run vs. Long run Hard Landing vs. Soft Landing Demand pull vs Cost push Inflation
Session-15	Unemployment-Inflation Relationship Phillips Curve From Aggregate supply to Philips curve Movement along the shift curve vs. Shifts in the Philips curve: The role of Expectations Expectations Augmented Phillips Curve
Session-16	Money-Functions Components of monetary aggregates Banks and Money Supply-Deposit Multiplier Central bank and reserve money Money Multiplier Reading Principles of Economics - Mankiw (4th edition) Chapter-29
Session-17-18	Alternate characterization of goods market equilibrium: Saving-Investment equality vs. Equilibrium Derivation of the IS Curve Money Market The theory of liquidity Preference Derivation of the LM Curve Equilibrium in the short rum and impact of monetary and fiscal policy on short run equilibrium. IS-LM model to aggregate demand curve Reading Macroeconomics - Mankiw (6th edition) Macroeconomics - Dornbusch, Fisher and Statrtz (9th edition)
Session-19	Balance of Payments and Exchange rate Current vs. Capital Account Balance in the Balance of Payments Exchange rates; Fixed vs. Flexible Dirty Floating or Managed Exchange rate regime Purchasing power parity theory of exchange rate Movement in Exchange rate and impact on Balance of Payment – Marshall Lerner Condition J-Curve effect Reading Principles of Economics - Mankiw (4th edition) Chapter-31 Macroeconomics - Mankiw (6th edition) Macroeconomics- Dornbusch, Fisher and Statrtz (9th edition)
Session 20	IS-LM model in the open economy: Effectiveness of monetary vs fiscal policy under different exchange rate regimes The Mundell- Fleming model - Impossible Trinity Reading Macroeconomics- Dornbusch, Fisher and Statrtz (9th edition) Macroeconomics –Mankiw (6th edition)

4. Evaluation Criteria

Quizzes: 35%

Mid-Term Exam: 30%

End-Term Exam: 35%

5. Readings and References
Text Book (Readings from these Books are Mandatory):
1. Principles of Economics: Mankiw (Fourth Edition), 2007. Thomson (South-Western)
2. Macroeconomics: Mankiw (Sixth Edition), 2006. Worth Publishers
Further Readings:
1. Macroeconomics - Abel and Bernanke (Fourth Edition)
2. Macroeconomics: Dornbusch, Fischer, and Startz (Ninth Edition), 2004. Tata McGraw-Hill
3. Macroeconomics: Principles and policy: Baumol and Blinder (Ninth Edition), South-Western Publishing.
4. Macroeconomics: Olivier Blanchard (Fourth Edition), 2007. Pearson Education
Created By: Alora Kar on 11/25/2019 at 12:05 PM
Category: MBA(Exe.)2019-20 T-II Doctype: Document

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