Macroeconomics Theory and Policy

PART-I: MACROECONOMICS • Nature and Scope of Macroeconomics • Circular Flow of Income and National Income Accounting • The Classical Full-Employment Model • Keynes's Theory of Employment: An Outline • Determination of National Income: Keynes's Simple Two-Sector Model • Determination of National Income with Government: Three-Sector Models • Concepts of Inflationary and Deflationary Gaps • Consumption Function • Post-Keynesian Theories of Consumption • Investment Demand • Theory of Multiplier • Aggregate Demand - Aggregate Supply Model (With Price Flexibility) • Unemployment, Full Employment and Wage-Price Flexibility

PART-II: POST-KEYNESIAN DEVELOPMENTS IN MACROECONOMICS • IS-LM Curves Model • Inflation-Unemployment Trade-off: Phillips Curve and Rational Expectations Theory • Stagflation and Supply-Side Economics • The New Classical Economics: Rational Expectations Model • The New Keynesian Economics

PART-III: MONETARY DEMAND AND SUPPLY • Nature and Functions of Money • Credit and Commercial Banking • Central Banking • Objectives and Instruments of Monetary Policy • Supply of Money and Its Determinants • Demand for Money and Keynes's Liquidity Preference Theory of Interest • Post-Keynesian Theories of Demand for Money

PART-IV: MONEY, PRICES AND INFLATION • Money and Prices: Quantity Theory of Money • Keynes's Monetary Theory: Money, Income and Prices • Monetarism: Friedman's Modern Quantity Theory of Money • Monetarism and Keynesianism Compared • Inflation and Hyper-Inflation: Nature, Causes, Social Costs and Effects,

PART-V: BUSINESS CYCLES AND MACROECONOMIC POLICY • Analysis of Business Cycles • Kaldor and Goodwin's Models of Business Cycles • Monetarist and New Classical (Rational Expectations) Theories of Business Cycles • Real Business Cycle Theory • Economic Stabilisation: Fiscal Policy • Economic Stabilisation: Monetary Policy

PART-VI: GOVERNMENT AND THE MACROECONOMY: GOVERNMENT'S BUDGET CONSTRAINT AND FISCAL POLICY • Public Finance: Public Expenditure • Financing of Government Expenditure: Taxation • Role of Fiscal Policy and Taxation in Resource Mobilisation for Economic Growth • Government Borrowing or Debt-Financing of Budget Deficit • Government Budget Constraint: Money Financing of Budget Deficit

PART-VII: OPEN ECONOMY MACROECONOMICS • Balance of Payments • The Monetary Approach to the Balance of Payments • Foreign Exchange Rate • Determination of National Income in an Open Economy and Foreign Trade Multiplier • Free Trade Versus Protection • International Linkages and Mundell-Fleming Model • Globalisation, Commercial Policy and WTO

PART-VIII: THEORIES OF ECONOMIC GROWTH • Economic Growth and its Determinants • Harrod-Domar Model of Growth • Neoclassical Theory of Growth • New Theory of Growth (Endogenous Growth Model) • Theory of Development with Surplus Labour: Lewis Model • Limitations and Relevance of Keynesian Economics to Developing Countries • Nature of Unemployment in Labour Surplus Developing Countries • Development Strategies for Labour-Surplus Developing Countries • Sen Vs Bhagwati: Debate on Growth, Poverty and Distribution