POST GRADUATE PROGRAMME IN MANAGEMENT
COURSE OUTLINE COVER PAGE
AY 2023-2024
TERM: II
TITLE OF THE COURSE: MACROECONOMICS CREDITS: 4
Name of the Faculty
Faculty Block/ Email
Room No.
Telephone
Number
Prof. Dipayan D. Chaudhuri
A 101
dipayan@iimidr.ac.in
+91-731-2439511
Prof.Rayees Ahmad Sheikh
B-213
rayeess@iimidr.ac.in
+91-731-2439870
Prof. Deepak Sethia
C203
sethiad@iimidr.ac.in
+91-731-2439579
Prof.Subhasankar
Chattopadhyay
B 205
subhasankarc@iimidr.ac.in +91-731-2439549
Course Pre-requisite (if any):NIL
Remarks for Participants (if any):NIL
Resource details to be purchased (Text Book/Software/License/Simulation/Resource): (AS
METNIONED IN THE OUTLINE) TEXT BOOK:
Dornbush, R., Fischer, S. & Startz, R. (2018), Macroeconomics, 12 th Edition. New Delhi: Tata
McGraw-Hill. (Hereafter referred to as Dornbush (2018).) Students should own this book.
Purchase of resources only for the exam(s) purpose when the same is not used and debriefed in
any of the classes in that course is not allowed.
Please indicate the changes made in the course outline based on the measurement of
assurance of learning (closing the loop)/student feedback:
1. nil
Following detail is to be filled by Visiting Faculty (VF) Instructor only:
Please provide feedback, in case the same course was taught earlier in the Programme:
S. No. Instructor’s name
Course Name
1
2
Note (from PGP Office regarding reading materials):
Course
feedback
Instructor’s
feedback
1. Only those cases/readings/articles will be procured that are available in HBSP/ Darden
Pub./IIMA case unit websites.
2. If Instructors (Internal faculty or visiting faculty) plan to use their own cases / articles, they are
expected to provide the same for classroom use. These cases will not be procured by PGP Office.
Signature: Course Instructor/Area Chair
POST GRADUATE PROGRAMME IN MANAGEMENT AY 2023-24
TERM: II
TITLE OF THE COURSE: MACROECONOMICS CREDITS: 4
Name of the Faculty
Faculty Block/ Email
Room No.
Telephone
Number
Prof. Dipayan D. Chaudhuri
A 101
dipayan@iimidr.ac.in
+91-731-2439511
Prof.Rayees Ahmad Sheikh
B-213
rayeess@iimidr.ac.in
+91-731-2439870
Prof. Deepak Sethia
C 203
sethiad@iimidr.ac.in
+91-731-2439579
Prof.Subhasankar
Chattopadhyay
B 205
subhasankarc@iimidr.ac.in +91-731-2439549
CONSULTATION TIME FOR STUDENTS
Name of the Faculty
Timing
Prof. Dipayan D. Chaudhuri
3.00 p.m. to 4.00 p.m. on the day of the classes or by
appointment on other days
Prof.Rayees Ahmad Sheikh
Prof. Deepak Sethia
Prof.Subhasankar Chattopadhyay
COURSE DESCRIPTION
The course covers macroeconomic theory and its applications particularly in the Indian context.
The main theoretical framework for the course will be IS-LM and Aggregate Demand - Aggregate
Supply. We begin the course with understanding national income accounts. We then set up with
simple models of national income determination and relax the assumptions to set up more
complex models. These models are necessary to understand and analyze the effects of fiscal and
monetary policy on the economy. The course will help participants to develop analytical skills to
understand the monetary policy announcements of the central banks and broad fiscal policies of
the government and their impact on the economy.
In the context of globalization of economies, we will discuss the linkages of national economy with
global economy and explore interdependencies among countries. We have allocated 5 out of the
total 20 sessions for international linkages of national economy.
COURSE OBJECTIVES
The course aims at helping participants understand the complex macroeconomic environment,
which confronts business. The participants will be able to understand the rationale behind the
economic policy announcements and anticipate policy changes. The course will equip participants
with analytical tools to decipher the effects of economic policy announcements, particularly
Monetary and Fiscal policy, on crucial macroeconomic factors such as interest rate, income,
inflation etc.
PEDAGOGY/TEACHING METHOD:
The pedagogy will be predominantly lectures and classroom discussions. Applications of
macroeconomic theory and case studies are discussed to reinforce understanding of concepts.
TEXT BOOK: Dornbush, R., Fischer, S. & Startz, R. (2018), Macroeconomics, 12th Edition. New Delhi:
Tata McGraw-Hill. (Hereafter referred to as Dornbush (2018).) Students should own this book.
LEARNING OUTCOMES Expected Learning Outcomes and Associated Measures
At the end of the course student is expected to accomplish the following learning outcomes
(CLO). Alignment of CLO with the Programme Level Goals & Objectives and Assessment of the
learning outcomes of the course is presented below.
Course Learning Outcome
Program Level Goals/ Outcome
Assessment Tool(s)
1. Will be able to understand 1.2 Identify the decision problem
Already Mapped
along
with
sources.
macroeconomic
environment
2. Will be able to appreciate
linkages between
domestic and world
economy
3. Will be able to understand
rationale behind
macroeconomic policies
4. Apply tools of IS-LM and or
AS-AD to understand the
impact of macroeconomic
policies
NA
Already Mapped
1.3 Identifies and presents
appropriate evidence
supporting the analysis of
alternatives
1.4 Evolves one’s own
perspective or takes a position /
makes judgement
Already Mapped
Already Mapped
EVALUATION
Individual Component
Group Component
Weightage
Quizzes
20
Mid Term
35
End Term
35
Class Participation
10
Total
100%
ACADEMIC DISHONESTY
IIM Indore believes in Academic honesty.
Academic dishonesty or misconduct is cheating that relates to an academic activity. It is a violation
of trust between the Institute and its stakeholders. Plagiarism, fabrication, deception, cheating and
sabotage are examples of unacceptable academic conduct. Please consult the Programme manual
for the section on academic dishonesty.
SCHEDULE OF SESSIONS
MODULE I:
Overview of Macroeconomics
Module Objective: To discuss dynamics of price- output determination for an economy in different
time horizons and to understand basic concepts in national income accounting
Sessions 1 &2
Introduction and National Income Accounting
Objective:
To discuss dynamics of price- output determination for an economy in
different time horizons and to understand basic concepts in national income
accounting
Chap. 1, pp.1-17; Chap 2 pp. 22-47, Dornbush (2018).
Reading:
MODULE
II Economy in the Short Run
Module Objective: To discuss the behaviour of goods market and money market and to
understand the impact of monetary and fiscal policy in a closed as well as in an open economy
in the short run
Session 3
The Goods Market: Models of National Income Determination - I: Consumption
and Investment
Objective:
To understand the process of determination of national income in a market
driven economy
Chap. 10, pp.197-209, Dornbush (2018).
Reading:
Session 4
The Goods Market: Models of National Income Determination - II:
Consumption, Investment and Government
Objective:
Reading:
To understand the role of government in determining the national income
Chap. 10, pp. 209-219, Dornbush (2018)
Session 5
Models of National Income Determination - III: Goods Market (IS Curve)
Objective:
Reading:
To derive IS- curve from the goods market Chap.11
pp. 223-236, Dornbush (2018).
Session 6
The Money Market: Demand for Money
Objective:
Reading:
To discuss the components of money stock and motives for holding money
Chap. 16, 381-397, Dornbush (2018).
Session 7&8
The Money Market: Central Bank, Money Supply and Credit: Money Stock
Determination and Money Multiplier
Objective:
Readings:
To discuss money multiplier and different instruments of monetary control 1)
Chap. 17 pp. 402-416, Dornbush (2018).
2) Samuelson, P. A., Nordhaus, W.D., & Chaudhuri, S. (2012). Monetary Policy
and the Economy in Macroeconomics (pp. 297-301). New Delhi: Tata
McGraw Hill.
3) Nidugala, G.K. & Shukla, R. (2015). The 2008 Subprime Crisis and the Indian
Economy [Class handout]. IIM Indore, Indore, India.
4) Chattopadhyay, S. (2015). Monetary policy framework in India [Class
handout]. IIM Indore, Indore, India.
Session 9
Models of National Income Determination - III: Goods & Money Markets (IS-LM
Model)
Objective:
To derive LM curve and to discuss equilibrium condition for goods and money
markets
1) Chap. 11 pp. 236-247 in Dornbush (2018).
2) D'Souza, E. (2014). IS-LM in India in Macroeconomics (pp. 223-225). New
Delhi: Pearson Education.
Readings:
Session 10
Stabilisation Policies in a Closed Economy: Monetary Policy
Objective:
To understand the transmission mechanism in monetary policy in a closed
economy
1) Chap. 12 pp. 252-268 in Dornbush (2018).
2) Economist (2016). When 2% is not enough.
http://www.economist.com/news/leaders/21705826-rich-worldscentralbanks-need-new-target-when-2-not-enough?frsc=dg%7Cd (to be read
online)
Readings:
Session 11
Objective:
Readings:
MODULE
Stabilisation Policies in a Closed Economy: Fiscal Policy
To understand the impact of fiscal policy in a closed economy
1) Chap. 12 pp. 268-286 in Dornbush (2018).
2) Chattopadhyay, S. (2015). Meeting budget deficit target in India [Class
handout]. IIM Indore, Indore, India.
III Economy in the Medium / Long Run
Module Objective: To discuss the relationship between inflation and unemployment and to
understand the impact of monetary and fiscal policy in a closed economy in the medium and long
run.
Session 12
Aggregate Demand and Supply
Objective:
Readings:
To derive the aggregate demand curve and to show how shifts in aggregate
demand can change output in the short run and prices in the long run Chap.
11, pp.245-246, Chap. 5 pp. 97- 115, Dornbush (2018).
Session 13
Phillips curve
Objective:
To understand the relationship between inflation and unemployment in the
short-run and long-run .
Chap. 6 pp. 118-128, Dornbush (2018).
Reading:
Module IV. Short Run and Long run models with open economy
In this module we discuss short and long run models in an open economy framework. The
module will consider external sector – trade and capital flows, in the models of national income
determination with fixed and flexible prices, public debt and inflation.
Session 14
Objective:
Readings:
International Linkages: Extensions of IS-LM in the Context of International
Mobility of Goods
To understand the concepts of balance of payment, fixed and flexible exchange
rates
1) Chap.13, pp. 287-304, Dornbush (2018).
Economic Survey (2014-15). Impact of Falling Global Crude Prices and Fuel
Policy Reforms (Box 2.3) & Implications of Global Crude Oil Price Movements
(Box 4.1) in Economic Survey, 2014-15. New Delhi: Govt. of India.
Session 15&16
International Linkages: Extensions of IS-LM in the Context of International
Mobility of Capital
Objective:
To discuss the impact of monetary and fiscal policies in an open economy with
free mobility of capital
Chap. 13 pp. 305-319, Dornbush (2018).
Readings:
Sessions 17&18
International Adjustments and Interdependence: Adjustments under Flexible
Exchange Rates; Inflation Differentials, Interest Differentials and Exchange
Rate; Exchange Rate Fluctuations and Interdependencies
Objective:
To discuss the impact of monetary and fiscal policies in an open economy with
flexible exchange rates in the long run Chap. 23, pp. 550-566, Dornbush (2018).
Readings:
Sessions 19 &20
Objective:
Readings:
Public Debt and Inflation
To understand the consequences of the government financing large amounts
of debt and its probable impact on inflation.
Chap.20 pp.470-490, Chap.22pp.508-527, Chap.8 pp.175-185, Dornbusch
(2018)
Please indicate the changes made in the course outline based on the measurement of
assurance of learning (closing the loop)/student feedback: Included a topic on Public Debt and
Inflation instead of Derivation of Aggregate Supply Curve
Please give the details of the book if students need to buy the book
Author
Title
Publisher
Edition
Remarks, if any
Dornbush, R.,
Fischer, S. &
Startz, R.
Macroeconomics
New Delhi: Tata
McGraw-Hill
12th Edition
2018
Additional Readings (This book need not be purchased)
D'Souza, E. (2014). “IS-LM in India” in Macroeconomics (pp. 223-225). New Delhi: Pearson
Education.
******