PART ONE—INTRODUCTION
Chapter 1
The Nature and Scope of Macroeconomics
Introduction; Nature of Macroeconomics; Difference Between Microeconomics and Macroeconomics; Dependence of Microeconomic Theory on Macroeconomics; Dependence of Macroeconomics on Microeconomic Theory; Macro Statics, Macro Dynamics, and Comparative Statics; Transition from Microeconomics to Macroeconomics; Stock and Flow Concepts; Selected Readings; Exercises
PART TWO-NATIONAL INCOME
Chapter 2
National Income: Meaning and Measurement
Introduction; Definitions of National Income; Concepts of National Income; Methods of Measuring National Income; Difficulties or Limitations in Measuring National Income; Importance of National Income Analysis; Inter-Relationships Among Different Concepts of National Income; Exercises
Chapter 3
Economic Welfare and National Income
What is Economic Welfare?; Relation between Economic Welfare and National Income; National Income as a Measure of Economic Welfare; Selected Readings; Exercises
Chapter 4
National Income Accounting
Social Accounting; Components of Social Accounting; Input-Output Accounting; Flow of Funds Accounts; Difference between Flow of Funds Accounts and National Income Accounts; Balance of Payments Accounts; Is the balance of payments always in equilibrium? Measuring Deficit or Surplus in Balance of Payments; Selected Readings; Exercises
Chapter 5
The Circular Flow of Income
Meaning, Circular Flow in a Two-Sector Economy, Circular Flow in a Three-Sector Closed Economy, Adding Foreign Sector: Circular Flow in a Four-Sector Open Economy, Importance of the Circular Flow; Exercises,
PART THREE-MACROECONOMIC THEORY
Chapter 6
The Classical Theory of Employment
Introduction; The Classical Theory of Employment; Complete Classical Model—A Summary: Keynes's Criticism of Classical Theory; Selected Readings; Exercises;
Chapter 7
Say's Law of Market
Say's Law; Propositions and Implications of the Law; Criticisms of Say's Law; Exercises;
Chapter 8
The Principle of Effective Demand: Aggregate Demand and Aggregate Supply
Introduction; Effective Demand; Importance of Effective Demand; Selected Readings; Exercises;
Chapter 9
The Consumption Function
Introduction; Meaning of Consumption Function; Properties or Technical Attributes of the Consumption Function; Keynes's Psychological Law of Consumption; Implications of Keynes's Law (or Importance of the Consumption Function); Determinants of the Consumption Function; Measures to Raise the Propensity to Consume; Selected Readings; Exercises
Chapter 10
Theories of the Consumption Function
Introduction; Keynes' Consumption Function: The Absolute Income Hypothesis; The Consumption Puzzle; The Drift Theory of Consumption; The Relative Income Hypothesis; The Permanent Income Hypothesis; The Life Cycle Hypothesis; Selected Readings; Exercises
Chapter 11
The Investment Function
Meaning of Capital and Investment; Types of Investment; The Present Value (PV)
Criterion of Investment; Determinants of the Level of Investment, Factors Other Than the Interest Rate Affecting Inducement to Invest, Exercises;
Chapter 12
The Concept of Multiplier
Introduction; The Investment Multiplier; The Dynamic or Period Multiplier; The Employment Multiplier; Selected Readings; Exercises
Chapter 13
Complex Multipliers
Introduction; Government Expenditure Multiplier; Tax Multipliers; Balanced Budget Multiplier; Exercises;
Chapter 14
Foreign Trade Multiplier
Meaning: Foreign Repercussion or Backwash Effect; Implications of Foreign Repercussion; Selected Readings; Exercises
Chapter 15
The Principle of Acceleration and the Super Multiplier
Introduction; The Principle of Acceleration; The Super-Multiplier or the Multiplier-Accelerator Interaction; Use of Multiplier-Accelerator Interaction in Business Cycles; Selected Readings; Exercises
Chapter 16
Some New Theories of Investment
Introduction; The Accelerator Theory of Investment; The Flexible Accelerator Theory or Lags in Investment; The Profits Theory of Investment; Duesenberry's Accelerator Theory of Investment; The Financial Theory of Investment; Jorgenson's Neoclassical Theory of Investment; Tobin's q Theory of Investment; Selected Readings; Exercises
Chapter 17
The Saving Function
Meaning of Saving Function; Determinants of Savings; The Paradox of Thrift; Exercises
Chapter 18
Saving and Investment Equality
The Classical View; The Keynesian View; Other Views; Selected Readings; Exercises
Chapter 19
The Model of National Income Determination
Introduction; Two-Sector Model; Three-Sector Model; Four-Sector Model: Income Determination in Open Economy; Exercises
Chapter 20
The Keynesian Theory of Income, Output, and Employment: A Summary
Introduction; The Keynesian Theory of Income, Output, and Employment; Selected Readings; Exercises
Chapter 21
The Classical vs. Keynesian Models of Income and Employment
General Theory: Evolutionary or Revolutionary, Criticisms of Keynesian Theory; Selected Readings, Exercises
Chapter 22
Unemployment and Full Employment
Introduction; Types of Unemployment; Meaning of Full Employment; Measures to Achieve and Maintain Full Employment; Exercises
Chapter 23
Applicability of Keynes's Theory to Underdeveloped Countries
Introduction; Keynesian Assumptions and Underdeveloped Countries; The Keynesian Tools and Underdeveloped Countries; Selected Readings; Exercises
PART FOUR-MONETARY THEORY
Chapter 24
Money
Nature and Definition of Money; Theoretical and Empirical Definitions of Money; Money and Near Money; Inside Money and Outside Money; Neutrality and Non-Neutrality of Money, Functions of Money; Selected Readings; Exercises
Chapter 25
Changes in the Value of Money: The Quantity Theory of Money and Its Variants
Meaning of Value of Money, Fisher's Quantity Theory of Money: The Cash Transactions Approach; The Cambridge Equations: The Cash Balances Approach; Transactions Approach vs. Cash Balances Approach; Superiority of Cash Balances Approach over Transactions Approach; Exercises
Chapter 26
The Keynesian Theory of Money and Prices
Introduction; Keynes's Reformulated Quantity Theory of Money; Superiority of the Keynesian Theory Over the Traditional Quantity Theory of Money; Criticisms of Keynes' Theory of Money and Prices; Exercises
Chapter 27
Friedman's Restatement of the Quantity Theory of Money
Introduction; Friedman's Theory; Friedman vs. Keynes; Exercises
Chapter 28
The Supply of Money
Definitions of Money Supply; Determinants of Money Supply; High-Powered Money and the Money Multiplier; Measures of Money Supply in India; Money Supply and Liquidity; Derivation of Money Multipliers; Exercises
Chapter 29
Credit Creation by Commercial Banks
Do Banks Create Credit?; The Process of Credit Creation; Limitations on the Power of Banks to Create Credit; Exercises
Chapter 30
Central Banking: Functions and Credit Control
Introduction; Definition of a Central Bank; Functions of a Central Bank; Central Bank as the Controller of Credit; Exercises
Chapter 31
The Monetarist Revolution
Meaning, Main Features, Criticisms, Exercises
Chapter 32
The Demand for Money
Introduction; The Classical Approach; The Keynesian Approach: Liquidity Preference; The Post-Keynesian Approaches; Exercises
Chapter 33
Theories of Interest Rate
Introduction; The Classical Theory of Interest; The Loanable Funds Theory of Interest; Keynes's Liquidity Preference Theory of Interest; Indeterminacy of the Classical, the Loanable Funds, and the Keynesian Theories of Interest; Modern Theory of Interest; Natural and Market Rate of Interest; Exercises
Chapter 34
Term Structure of Interest Rate
Menning, Pactres Determining the Term Structure of Interest Rates, Theories of Term Structure of Interest Rates, Exercises
Chapter 35
The Real Balance Effect and Pigou Effect
Patinkin's Integration of Monetary Theory and Value Theory: The Real Balance Effect, The Pigou Effect, Differences Between the Pigou Effect and the Real Balance Effect, Exercises
Chapter 36
Wage-Price Flexibility and Full Employment
Introduction, The Classical View, The Keynesian View, The Keynes Effect, Flexible Wage Policy vs. Flexible Monetary Policy, Selected Readings, Exercises
PART FIVE—INFLATION AND BUSINESS CYCLES
Chapter 37
Inflation and Deflation
Introduction; Meaning of Inflation; The Inflationary Gap; Demand-Pull or Monetary Theories of Inflation; Cost-Push Inflation; Demand-Pull Versus Cost-Push Inflation; Mixed Demand-Pull Cost-Push Inflation; Sectoral or Demand-shift Inflation; Structural Inflation; Markup Inflation; Open and Suppressed Inflation; The Phillips Curve: The Relation between Unemployment and Inflation; Rational Expectations and the Long-Run Phillips Curve; Policy Implications of the Phillips Curve; Stagflation; Causes of Inflation; Measures to Control Inflation; Effects of Inflation; Inflation as a Tax, Costs of Inflation, Deflation, Comparison between Inflation and Deflation, Control of Deflation, Exercises
Chapter 38
The Natural Rate of Unemployment
Meaning, Its Determination; How to Reduce the Natural Rate of Unemployment?; Non-accelerating Inflation Rate of Unemployment, or NAIRU; Exercises
Chapter 39
Business Cycles
Meaning: Types of Business Cycles; Characteristics of Business Cycles; Phases of a Business Cycle; Causes of Business Cycles; Effects of Business Cycles; Theories of Business Cycles; Measures to Control Business Cycles or Stabilization Policies; Selected Readings; Exercises
PART SIX-GROWTH MODELS
Chapter 40
The Harrod-Domar Models
Introduction; Requirements of Steady Growth; The Domar Model; The Harrod Model; Limitations of these Models; Exercises
Chapter 41
The Solow Model of Growth
Introduction; Assumptions: The Model; Exercises
Chapter 42
The Solow-Swan Model of Economic Growth
The Solow-Swan Model; Implications of the Model; Exercises
Chapter 43
The Endogenous Growth Theory
Introduction; The Endogenous Growth Models; Policy Implications of Endogenous Growth Theory; Exercises
Chapter 44
Steady-State Growth
Meaning: Properties of Steady State Growth; Exercises
Chapter 45
The Golden Rule of Accumulation
Meaning: Golden Age and Golden Rule of Accumulation; Exercises
PART SEVEN-MACROECONOMIC POLICIES
Chapter 46
Macroeconomic Policy
Meaning: Policy Targets and Instruments; Objectives of Macroeconomic Policy; Conflicts or Trade-Offs in Policy Objectives; Problem of Coordination of Macroeconomic Policy Objectives; The Swan Model; The Assignment Problem: The Mundellian Model; Rules vs. Discretion in Economic Policy; Lags in Effects of Economic Policy; Selected Readings; Exercises
Chapter 47
Monetary Policy
Meaning of Monetary Policy; Objectives or Goals of Monetary Policy; Instruments of Monetary Policy; Expansionary Monetary Policy; Restrictive Monetary Policy; Exercises
Chapter 48
Classical, Keynesian, and Modern Views on Monetary Policy
The Classical View, The Keynesian View, The Modern View, Exercises
Chapter 49
The Liquidity Theory of Money
Introduction: The Radcliffe Committee View Radcliffe Sayers Thesis, The Gurley. Shaw View Exercises
Chapter 50
Fiscal Policy
Meaning: Objectives of Fiscal Policy, Instruments of Fiscal Policy, Crowding Out and Fiscal Policy, Exercises
Chapter 51
Monetarism versus Keynesianism
Introduction; Theoretical Differences; Policy Differences; Conclusion; Exercises
Chapter 52
IS and LM Functions: General Equilibrium of Product and Money Market
Introduction; The Product Market Equilibrium; The Money Market Equilibrium; General Equilibrium of Product and Money Market; Changes in General Equilibrium; Exercises
Chapter 53
Extensions of the IS-LM Model
Introduction; Effects of Changes in Monetary and Fiscal Policies by the Government; Effects of Changes in Fiscal Policy; Monetary-Fiscal Policy Mix; IS-LM model with labor market and flexible prices; IS-LM Model with Flexible Wages and Prices: The Neo-Classical Analysis; IS-LM Model in the Keynesian Analysis with Flexible Prices and Fixed Money Wages; Selected Readings; Exercises
Chapter 54
Effectiveness of Monetary and Fiscal Policy
Introduction; Monetary Policy; Fiscal Policy; The Synthesist View: Three-Range Analysis; Monetary Policy; Fiscal Policy; Monetary-Fiscal Mix; Exercises
PART EIGHT—MODERN MACROECONOMICS
Chapter 55
The Adaptive and Rational Expectations Hypothesis
Introduction; Adaptive Expectations; Rational Expectations; Selected Readings; Exercises
Chapter 56
Supply-side Economics
Introduction; Main Features of Supply-Side Economics; Policy Prescriptions of Supply-Side Economics; Selected Readings; Exercises
Chapter 57
The New Classical Macroeconomics
Introduction; The New Classical Macroeconomics; The Labor Market Policy Implications of New Classical Macroeconomics; Empirical Evidence; Selected Readings; Exercises
Chapter 58
The Real Business Cycle Theory
Introduction; Role of Technological Shocks; Criticisms of the Real Business Cycle Theory; Selected Readings; Exercises
Chapter 59
New Keynesian Economics
Introduction; Differences between New Classical and New Keynesian Macroeconomics; Main Features of New Keynesian Economics; Sticky Nominal Wages; Sticky Nominal Prices: Menu Costs Hypothesis; Sticky Real Wages; Coordination Failure; Policy Implications of New Keynesian Economics; Criticisms of New Keynesian Economics; Selected Readings; Exercises
Chapter 60
Kaldor's Theory of Macro-Distribution
Introduction; Its Assumptions; The Theory;
PART NINE-MACROECONOMICS IN AN OPEN ECONOMY
Chapter 61
Balance of Payments: Meaning and Components
Meaning: Structure of Balance of Payments Accounts; Is Balance of Payments Always in Equilibrium? Measuring Deficit or Surplus in Balance of Payments; Balance of Trade and Balance of Payments; Disequilibrium in Balance of Payments; Measures to Correct Deficit in Balance of Payments; Exercises
Chapter 62
Adjustment Mechanisms of Balance of Payments
Introduction; Automatic Price Adjustment Under Gold Standard; Automatic Price Adjustment Under Flexible Exchange Rates (Price Effect); The Elasticity Approach; The Absorption Approach; The Monetary Approach; Exercises
Chapter 63
Balance of Payments Policies: Internal and External Balance
Introduction; Expenditure Changing Monetary and Fiscal Policies; Monetary-Fiscal Mix: Internal and External Balance Policies Mundell-Fleming Model; Monetary and Fiscal Policies for Achieving Internal and External Balance Simultaneously - Swan Model; The Assignment Problem: The Mundellian Model of Monetary-Fiscal Policies for Internal and External Balance; Expenditure Switching Policies; Exercises
Chapter 64
Foreign Exchange Rate
Meaning of Foreign Exchange Rate; Determination of Equilibrium Exchange Rate; Theories of Foreign Exchange Rate; Causes of Changes in the Exchange Rate; Exercises
Chapter 65
Foreign Exchange Rate Policy
Introduction; Fixed Exchange Rates; Flexible Exchange Rates; Hybrid or Intermediate Exchange Rate Systems; Multiple Exchange Rate Systems; Exchange Rate Regimes in Practice; Exercises
Chapter 66
International Capital Movements
Meaning; Types of International Capital Movements; Factors Affecting International Capital Movements; Exercises
