UNIVERSITY OF DELHI
DELHI SCHOOL OF ECONOMICS
DEPARTMENT OF ECONOMICS
Minutes of Meeting
Subject: B.A. Program with Economics Major
Semester IV
Course & Code: Intermediate Macroeconomics I: Foundations of
Aggregate Income Determination (ECON008)
Credits: 4
Duration (per week): 4 hours (3 L + 1 T)
Date & Time: Wednesday 24th January 2024, 12.30 PM
Venue: 116, Department of Economics, Delhi School of Economics,
University of Delhi
Convenor: Prof. Dibyendu Maiti
Sub-committee:
Nidhi Dhamija
Suvojit Lahiri
S K Sharma
Neha Atri
Kanika Pathania
In attendance:
Dr SNRao Maharaja Agrasen College
Amrisha Bhardwaj Lady Shri Ram College for Women
Dr. Gagandeep Kaur SGTB KHALSA COLLEGE
Sukhvinder Kaur Mata Sundri College for Women
Dr. Neha Atri SGNDKC
Vandana Sethi Motilal nehru college
Dr.Dorothy Roy
Chowdhury Dyal Singh Evening College
Surender kumar sharma Slc eve.
Anil Kumar Sri Aurobindo College
Vandana sethi Motilal Nehru College
Shruti Goyal Zakir Husain Delhi College
Vinay kumar Yadav Sri Aurobindo college
Learning Objectives
The Learning Objectives of this course are as follows:
• This course builds on the basic concepts of macroeconomics. It introduces labour
markets and the aggregate supply (AS) curve.
• Aggregate Demand (AD) and Aggregate Supply (AS) are brought together to determine
equilibrium prices and output and examine the policy impacts.
• The course discusses the Phillips curve and the alleged trade-off between inflation and
unemployment. Both adaptive and rational expectations are introduced.
• A flavour of micro-foundations is introduced with respect to consumption and
investment.
Learning Outcomes
The Learning outcomes of this course are as follows:
• The students enable students to analyse the interaction of aggregate demand and supply
and the effects of fiscal and monetary policy, the trade-off between inflation and
unemployment, and the consumption and investment behaviour of the households.
Readings:
1. Rudiger Dornbusch, Stanley Fischer and Richard Startz (2011). Macroeconomics, 11th
edition, McGraw-Hill.
2. Oliver Blanchard and David R. Johanson (2013). Macroeconomics, 6th edition,
Pearson
3. C.L.F. Attfield, D. Demery and N.W. Duck (1991), Rational Expectations in
Macroeconomics: An Introduction to Theory and Evidence, 2nd edition, Wiley-
Blackwell.
Topic-wise Readings:
Unit 1. IS‐LM Analysis (11 hours)
Derivations of the IS and LM functions; IS‐LM and aggregate demand; shifts in the AD
curve
(i) Dornbusch, Fischer and Startz: Chapter 10 (Boxes & Section 10.5 to be excluded)
(ii) Dornbusch, Fischer and Startz: Chapter 11 (Boxes & Section 11.4 to be excluded)
Unit 2. Short-run and medium-run equilibrium (11 hours)
The labour market, Wage determination; wages, prices and unemployment; natural rate of
unemployment; from employment to output, Derivation of aggregate supply curve,
Interaction of aggregate demand and supply to determine equilibrium output, price level and
employment.
(i) Blanchard and Johnson: Chapters 6 and 7
Unit 3. Phillips Curve and Theory of Expectations (8 hours)
Inflation, unemployment and expectations, Phillips Curve; adaptive and rational expectations;
policy ineffectiveness debate.
(i) Blanchard and Johnson: Chapter 8
(ii) Attfield, Demery and Duck: pp 6 – 9, 18 – 28
Unit 4. Microeconomic foundations of macroeconomic behaviours (10 hours)
Consumption: Keynesian consumption function; Fisher’s theory of optimal intertemporal
choice; life-cycle and permanent income hypothesis; other theories of consumption
expenditure.
Investment: determinants of business fixed investment, residential investment, and inventory
investment.
(i) Dornbusch, Fischer and Startz: Chapter 13 (Boxes & Optional on pp 338 to be excluded)
(ii) Dornbusch, Fischer and Startz: Chapter 14 (Boxes to be excluded)
Assessment:
1. Internal Assessment (IA): 30 marks - one class test, another test or presentation (12
marks each), and attendance (6 marks).
2. Continuous Assessment (CA): 40 marks - projects, presentations etc. (35 marks) and
attendance (5 marks).
3. The end semester exam (90 marks) will comprise of two sections: A and B. Sections A will
comprise short questions of 6 marks each (5 to be attempted out of 7) and Section B will
comprise long questions of 12 marks each (5 to be attempted out of 7). Questions based on
numerical problems of approximately 20 to 30 marks to be included. The examination
weightage: Unit 1 – 25; Unit 2 – 25; Unit 3 – 15; Unit 4 – 25
