Course Instructor – Dr Vishwa Ballabh and Dr P.C.

Padhan

BM (Batch 2020-22)- Term II

Macroeconomic Theory and Policy

Course Outline
Course description and objectives:

Fundamental shift is occurring in the business environment all over the world and no nation can
remain self-contained entities. Even if a company does not do nor conduct business
internationally, one need to be concerned about the business development around the world as
they may directly affect its own business. Thus, companies today operate in two environments:
domestic and international, in which business managers must operate. How well they perform
in their undertakings will depend in great measure on their understanding of these three
environments. This course is designed to help students understand and analyse macro-
economic environment in which business unit operates. The basic premise of the course is
macroeconomic theories and policy instruments and their implications in understanding
macroeconomic environment of a nation/state in which business units operates.

Every business enterprise is located in complex economic environment. Understanding the

business environment will help the student to make better managerial decisions related to
his/her enterprises and help them decide better competitive strategy. The excellence in decision
making cannot be achieved unless one understands business environment more particularly
economic environment. The business entity faces variety of internal or external economic socks.
A good business decision maker should not only have capacity to understand and analyses it but
also should have capacity to anticipate and forecast better future strategic business decisions.
Thus, the primary objective of the course is to help students comprehend various economic
aggregates and variables and help them understand their relationship in national and
international context.

Course Objective

 To sensitize students, need for understanding of macroeconomic theories and policies;

 To help students analyse complex economic environment, macroeconomic policies and its
implications for business strategy in emerging environment; and

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 To equip students, understand open economy macroeconomics, foreign trade,
competitiveness and productivity and strategic trade theories and policies.
Prescribed Book

E-book Principles of Economics (12th Edition) By Karl E. Case, Ray C. Fair, Sharon Oster

Supplementary Readings:

N. Gregory Mankiw – Macroeconomics

Olivier Blanchard and David R Johnson (2006), “Macroeconomies: Sixth Edition- Pearson”

Pedagogy:

Lectures, Case Discussion, Project and Presentation

Chapters from Course Pedagogy (Case Studies/in-class

Session
Session Topic Textbook and Reading exercise/questionnaire/presentations)
No(s)

1. Introduction to the Specified chapter from Lecture notes /cases/ class activities:
course on the textbook and Case Discussion - India on Move
Macroeconomic Theory reading materials (Assignment 1)
and Policy provided by the course
faculty

2-3 Measurement of Chapter 5 & 6 Lecture notes and class activities.

Economic Activity Case- National
Economic Accounting:
Past, present and
Future [Reading]

4 Business Cycle and Case- Great Foundation of Macro-Economic Models

concern of Macro- Depression: Causes (Two reasons for economic fluctuation-
Economics and Impact (Abridged) Demand and Supply)
[Reading]

Case- What really

prevents companies
from thriving in a
Recession Case
[Reading]

5 Discussion Covid-19 and Its Impact on India

Economy Assignment 2

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 6-8 Demand side Chapter -9 Discussion based on chapters
macroeconomics and
role of Government in A brief Introduction to
Macroeconomics
Economic Management
(Fiscal Policies) [Reading]

Case- Fiscal Policy and

the case of
Expansionary Fiscal
Contraction in Ireland
in the year 1980s

[Reading]

9 Deficit, Debt Crisis and Case: How Case: Mismanagement of Fiscal Policy:
Sustainability Monetary Government Debt Greene’s Achilles’ Heel
Policy Accumulates Assignment 3
[Reading]

10-12 Understanding the Chapter 10 and 11 Discussion based on relevant chapter

financial system and and Cases.
money market
(Monetary Policies)

13-14 Labour Market, Chapter 12-13 Discussion based on prescribed chapter

Aggregate Supply and
Interaction of fiscal and
Monetary Policies

15 Case Discussion U.S. Subprime Mortgage Crisis

Assignment 4

16 Unemployment and Chapter 7 Discussion based on the chapter

Inflation

17 Open economy- Chapter 18-19 Chapter based discussion, flow of

Macroeconomics capital and goods, interest and
exchange rates and their impact on
International Trade, business.
Balance of Payment,
Exchange Rate
management

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 18 Case Discussion Japan’s Automakers Face Endaka
Assignment 5

19-20 The role of saving, Chapter 20 Discussion based on the chapter,

investment, capital understanding the role of capital &
formation and technological change in economic
technology in economic development and change in decision
growth- Summary and making environment.
Discussion on the
course

Details of Evaluation Components

Evaluation Module Weightage for the

Evaluation
Component
Assignments* 30%

Quiz 1 25%

Quiz 2 25%

End-Term 20 %

* Students will have to submit five assignments and randomly three will be selected for
evaluation. The selection of the three assignments will be done by the instructors. Students
cannot raise any questions about the assignments selected for the evaluations.

Evaluation Pattern: Absolute cum relative grading; absolute cut off for different grades are
given in student manual.

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