Course Outline

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Dr. Gaur Hari Singhania Institute of Management and Research, Kanpur
Macroeconomics
Trimester II
nd
PGDM Batch 2013-15 (FT)
Faculty: Prof. Kunwar Milind Singh (milind.singh@ghsimr.org)
Text Book: Macroeconomics
Author: R Glen Hubbard and Anthony Patrick OBrien
Publisher: Pearson
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A. Course Objective

This course focuses on macroeconomic concepts and policies to provide the theoretical base. It then takes the student
on the path of linking economic theory with business strategy. Regular reference to ongoing economic policy changes
is made to provide students with the training to apply theory to practice. This course is concerned with the application
of ideas of Economics to understand the various problems faced by managers while making decisions.
The course aims at enabling students to relate the issues of how to develop a strategy, which is in line with
developments in the external environment.
The aim is to emphasize on developing an ability in the student to appreciate the linkages between macro
environmental changes and micro level decision-making, as a manager and as a consumer.
B. Teaching Pedagogy
In addition to in-class exams and homework assignments, each student will undertake a short Assignment. In this
assignment, students in group may require to visit organizations of their interest. Students will be directed to use the
library as well as the Internet resources to obtain the required data. All students will given topic from the course
outline and are expected to visit different organization and make a good report based on their understanding in class
and the knowledge obtained during respective organizations visit of collection of economic information from various
assorted resources. Further instructions about the course project will be given in class. Assignment will based on
understanding the outcome of the chapter and explore the relevant topic with various business news paper coverage.
Assignment can be given on interest area of students in corporate world.
C. Detailed Session Plan

Un
it
Session
No.
Topic & Contents

Chapter
No. of
prescrib
ed text
book &
Page
Nos.
Activity
Details


1
Introduction of Macroeconomics

Overview of Macroeconomics
subject
2
Macroeconomic of Indian economy

Understanding of
Macroeconomics from Indian
economy
I
MACROECONOMIC FOUNDATIONS AND
LONG-RUN GROWTH



3-4 Measuring Total Production and Income
GDP: Calculating GDP , Components of GDP,
Real vs Nominal GDP, Shortcomings of GDP
Ch. 7
234-245
Covers how total production is
measured and difference between
real and nominal variable
Course Outline

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5-6 Unemployment types and Inflation
Unemployment: Measuring Unemployment,
Types, explaining unemployment
Inflation: CPI, real vs nominal interest rate

Ch. 8
260-286
Covers the three type of
Unemployment and inflation
measured, and the difference
between real and nominal interest
rates.

7-9 Economic Growth, the Financial System and
Business Cycle : Saving , Investment and Financial
system , The Business Cycle
Ch.9
292-318
Provides overview of key
macroeconomic issue by
discussing the business cycle in
context of long run growth,
Discusses the role of
entrepreneurship, financial
institution and policy in economic
growth.

10-
11
Long-Run Economic Growth-Source and Policies Ch 10
324-354
Highlight the importance of
institutions, policies and
technological changes for
economic growth.
II
SHORT-RUN FLUCTUATIONS



12-
13
Output and Expenditure in the Short Run : The
aggregate expenditure model, determining level of
aggregate expenditure in the economy,
macroeconomic equilibrium , The multiplier effect
Ch. 11
360-400
Uses the Keynesian 45 line
aggregate expenditure model to
introduce students to the short run
relationship between spending and
production.

14-
15
Aggregate Demand and Aggregate Supply
Analysis: macroeconomic equilibrium in the long
and short run, Dynamic AD-AS model
Ch. 12
402-437
Carefully develops the AD-AS
model and then makes the model
dynamic to account better for
actual movement in real GDP and
price level.
III
MONETARY AND FISCAL POLICY



16-
17
Money, Bank and the Federal Reserve system :
What is money, measurement, creation of money,
Federal reserve system, Quantity theory of money
Ch 13
438-464
Explore the role of money in the
economy, the money supply
process, and the structure to
Federal Reserve

18-
19
Monetary Policy : Monetary policy and economic
activity

Ch.14
470-498
Uses the aggregate demand and
aggregate supply to show the
effect of monetary policy on real
GDP and price level.

20-
21
Fiscal Policy: Expansionary and Contractionary
monetary policy , Taxes and government spending
impact on fiscal policy, Fiscal policy in long run
Ch. 15
504-534
Uses the aggregate demand and
aggregate supply to show how
taxes and government spending
affect the economy. Includes
significant coverage of supply-
side effect of fiscal policy.

22-
23
Inflation, Unemployment and Federal reserve
Policy : Tradeoff between unemployment and
inflation, Phillips Curve, Expectation of the
inflation, Fighting inflation
Ch. 16
546-570
Discusses the short run and long
run Phillips curves. Also covers
the role of expectation formation
and central bank creditability in
monetary policy.
IV
THE INTERNATIONAL ECONOMY


Course Outline

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24-
25
Macroeconomics in an Open Economy
BOP, FX market and Exchange rate, International
sector and national saving and Investment
Ch 17
576-596
Explain the linkages among
countries at macroeconomic level
and how policy maker in all
countries take these linkages into
account when conducting fiscal
and monetary policy

26 -27 The International Financial System : Exchange rate
system, current exchange rate system, International
capital market
Ch. 18
604-647
Covers the international financial
system and explores the role
central bank plays in the system.

28- The Gold standard and Bretton wood system Ch-18 Covers the evolution of
international monetary system

29-
30
Term Paper presentation

D. Evaluation Details

Evaluation in the course shall be out of 150 marks, Internal Evaluation, and End-trimester exam.
The end-term exam shall be of 50 marks, covering the other half of the syllabus. It too will have applied,
conceptual and case based questions. However, case based questions can be from first half also.
Internal Evaluation shall be done out of 60 marks. It is based on the students performance in Assignment, Quiz-
cum-Class Test, Presentation, Classroom Participation and Attendance. The marks assigned for each activity are as
follows:

Attendance = 10 marks
Classroom Participation = 10 marks
Term paper = 15 marks
Assignments = 10 marks
Class Test = 10 marks
Surprise Quiz = 5 marks
Total 60 marks


E. Reference Books:

1. Macroeconomics - R. Glenn Hubbard , Anthony Patrick O Brien , Pearson Education
2. Macroeconomics - N. Gregary Mankiw, latest edition-Worth Publishers
3. Macroeconomics - Andrew B Abel, Ben S Bernanke, Dean Croushore-Pearson
4. Macroeconomics Rudiger Dornbusch- Stanley Fischer- Richard Startz

F. Recommended Journals & Magazines:

1. Business India
2. Business World
3. EPW
4. Economist
5. Focus WTO
6. Asian Economic Review
Newspapers:
7. Business Standard
8. Economic Times
9. Financial Express

Course Outline

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G. Recommended Websites:

1. www.wto.org
2. unctad.org
3. www.imf.org
4. www.worldbank.org