Syllabus (ECONOMICS)

Course Type: MAJ-4

Semester: 4

Course Code: BECOMAJ04T

Course Title: Macroeconomics with Mathematical Applications

(L-P-Tu): 5-0-1

Credit: 6

Practical/Theory: Theory

Course Objective:

Learning Outcome: Course Objective: This course is formulated to give a solid base with further development of macroeconomic models. Theoretical macroeconomics with applied examples will create a solid base for the students over this. Course Specific Outcome: The macroeco

1. 1. Simple Keynesian Model: (10)

Income Determination in Simple Keynesian System in closed economy, Stability of equilibrium, Investment Multiplier, Paradox of Thrift; Mathematical Application

2. Classical Model: (10)

Classical System; Say’s Law, Quantity Theory of Money; Classical Dichotomy and Neutrality of Money

3. Money Market: (15)

Motives for holding money---Transaction, Precautionary and Speculative; Liquidity Preference Theory of Keynes, Liquidity Trap; Determination of Equilibrium Interest Rate; Inventory Theoretic Approach to Transaction demand for money (of Baumol and Tobin); Friedman’s Restatement of the demand for money.

4. IS-LM Model: (15)

Derivation of IS and LM curves; Determination of equilibrium income and interest rate; Stability of equilibrium; Comparative Static results; effects of fiscal and monetary policies; Real balance effects; Mundell- Fleming model; Mathematical Application

5. Consumption function: (10)

Kuznets Empirical finding; Relative Income Hypothesis; Life cycle hypothesis; Permanent Income Hypothesis; Mathematical Application

6. Investment function: (10)

MEC and MEI; Gorgenson’s neoclassical theory; Acceleration Principle---fixed and variable; Net present value criterion; Mathematical Application

7. Complete Keynesian System: (10)

Derivation of aggregate demand and aggregate supply; Determination of equilibrium output, employment, wage, price and interest rate; Mathematical Application

8. Inflation: (10)

Demand Pull and Cost Push Inflation; Trade-off between Inflation and Unemployment; Short run and Long run Phillips Curves under Adaptive Expectations

Reading References:

1. Mankiw, N., 2016, Macroeconomics, 9^th edition, Worth Publishers.
2. Branson, W., 2013, Macroeconomics, Theory and policy, 3^rd edition, East West Press.
3. Jones, C., 2016, Macroeconomics, 4^th edition, W. W. Norton.
4. Blanchard, O., 2018, Macroeconomics, 7^th edition, Pearson Education.
5. Abel, A., Bernanke, B., 2016, Macroeconomics, 9^th edition, Pearson Education.
6. Errol D’Souza, 2009, Macroeconomics, Pearson Education , New Delhi.
7. Richard T. Froyen, 2016, Macroeconomics, Pearson education Asia, 10^th edition.
8. Sikdar Soumen, Principles of Macroeconomics, Oxford University Press.
9. Ackley, Macroeconomic Theory and Policy, 2^nd edition.
10. Monoronjan Dey, 1999, Macroeconomics, Dhakeswari Library, Dhaka.