BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI

INSTRUCTION DIVISION
SECOND SEMESTER 2019-2020
Course Handout Part II
Dated: 07/01/2020
In addition to part I (General Handout for all courses appended to the time table) this portion gives
further specific details regarding the course.

Course No. : ECON F243

Course Title : Macroeconomics
Instructor-in-charge : Dr Sukumar Vellakkal

1. Course Description: Flow of funds system; monetary circulation & exchange; basic models of
income determination; classical model; obstacles to full employment; Keynes’ model; derivation of
IS and LM functions; three sector model; Monetarists and New Classicals and New Keynesians,
Inflation & Phillips curve, Policy analysis.
2. Scopes and Objective:
The course aims at enabling the students to understand the meaning, interdependence and
determination of the equilibrium level of the macroeconomic variables like National Income,
Saving, Investment, Consumption, Employment, Interest Rate, Wage Rate, Foreign Exchange Rate,
etc. The methods and approach to macroeconomic modeling are also emphasized.
3.Text Book:
T1. Froyen, Richard T, Macroeconomics: Theory and Policies, A. W. Inc. ed; latest ed. 2009.
4. Reference Books:
R1. Snowdon,Brian and Vane,Howard.R ,Modern Macroeconomics: Its Origins, Development and
Current State,Elgar,2005
R2. Avasthi, G.P., Macroeconomics, Vol. I & II, Notes – EDD, 1999.
R3. Rudiger Dornbusch, Stanley Fischer Richard Startz. Macroeconomics, McGraw Hill, 11th
Edition (Indian edition), 2015
5. Course Plan:
L/No. Learning objectives Topics to be covered Ref
1-2 Introduction Macroeconomic System 1, T1
3-5 The Classical Model: Real Sector Equilibrium Output and Employment 2,T1
6-9 The Classical Model: Monetary Quantity Theory of Money, Interest Rate 3,T1
Sector determination, Policy Implications
10 Keynesian Revolution Introduction to General Theory 2,R1
11-12 Keynesian System-I Role of Aggregate Demand 4,T1
13-15 Keynesian System-II Money, Interest and Income: IS-LM models 5, T1
16-20 Keynesian System-III Policy Implications using the ISLM Model 6,T1
21-25 Keynesian System-IV Aggregate Demand and Supply 7,T1
26-30 Aggregate Supply AS: Wages, Prices and Unemployment 6, R3
31-33 Open Economy Macroeconomics Exchange rates; Open economy IS-LM (Mundell- 14,T1
Fleming Model)
 34-37 Keynesian Orthodoxy Challenged Monetarist counter revolution 8, T1
38-39 Behavioral Foundations Consumption theories and Saving 13,R3
40-43 The Anatomy of Inflation and Philips curve on trade-off between inflation and 7, R3
Unemployment unemployment
44-45 Alternative views Output, Inflation and Unemployment: Alternative 9, T1
views
46-47 Skepticism about Stabilization New classical Economics, Rational expectations 10, T1
Policy and the Keynesian counter critique
48-49 Macroeconomic Dynamics RBC models and New Keynesian Models 11,T1
50 Theoretical and Policy Issues Summary of Models Discussed 12,T1
51-54 Big Events, and advanced topics Great depression, recessions, and stagflation, and Class
hyperinflation notes

6. Evaluation Scheme:
Component Marks (tot 100) Date & Time Remarks
30 02/03/2020 Closed Book
Mid sem exam (Monday 9:00 AM-10:30 AM)
Comprehensive exam 40 01/05/2020 (FN) Closed Book
(Friday)
Quiz 20 Surprise
(Max marks for
each quiz will be 4)
Tutorial presentation 5 Tutorial sessions -
Attendance in tutorial sessions 5 Tutorial sessions
7. Chamber consultation hour: Saturday (12 Noon – 1.00 pm) at B-308
8. Notices: Please lookup The Moodle page for course related information
9. Make-up policy: Make-up requests received prior to a test component will be examined on a case-
by- case basis.
10. Additional Materials: Any additional materials that is not mentioned in the handout shall be
provided either in the form of soft copy or hard copy. Students are advised to collect them promptly.

Instructor-in-charge
ECON F243