GMP

2015-16
Term: I
Prof. Vishwa Ballabh

Managerial Economics Part-I

Course Objectives:
Fundamental shift is occurring in the business environment all over the world and no nation
can remain self contained entities. Even if a company does not do nor conduct business
internationally, one needs to be concerned about the business development around the world as
they may directly affect its own business. Thus companies today operate in two environments:
domestic and international, in which business managers must operate. How well they perform
in their undertakings will depend in great measure on their understanding of these three
environments. Part I of the Managerial Economics course is designed to help students
understand and analyze macro-economic environment in which business unit operates. The
basic premise of the course is macroeconomic theories and policy instruments and their
implications in understanding macroeconomic environment of a nation/state.
The specific objectives of the course are:
- To sensitize students need for understanding of macroeconomic theories and
policies;
- to equip students understand open economy macroeconomics, foreign trade,
competitiveness and productivity and strategic trade theories and policies; and
- to help students analyze complex economic environment, macroeconomic policies
and its implications for business strategy in emerging environment.

Prescribed Book
N. Gregory Mankiw, Principles of Macroeconomics Sixth Edition
Class Schedule

Introductory
Sessions
1

Topics
Overview of Economics and Introduction to Macroeconomics; Difference between
Micro & Macro Economics; Macroeconomic Concern and Scope (Chapters-1 & 2)

Measuring Economic activity and Macroeconomic aggregates (Chapters-10 & 11)

Economic fluctuation: short run Macroeconomics

3

Basics of aggregate demand and aggregate supply and Goods Market (Chapter-20)

4-5

Simple Keynesian Model, Multiplier Model Fiscal Policies (Chapter-21)

6-7

The Money Market, Money demand and Supply, Interest rate, Money Supply &
Inflation and Monetary Policy (Chapters-16, 17 & 21)

IS-LM Framework: Links between the goods and money market.

Economy in medium run

9

The labour market and Unemployment (Chapter-15)

10

The natural rate of unemployment, Phillips curve, Inflation and nominal money
growth and Trade Off between Inflation and Unemployment (Chapter22)

Economic Growth and Open Macro-economics

11

The Fundamentals of Growth (Chapter12)

12

Economic Gains from Trade: Comparative Advantage, Strategic trade theories;

Introduction to WTO (Chapter-3)

13

Open Economy Macro- Economics (Chapter-18 & 19)

Project Presentations Outside Class

Pedagogy: Lectures, case discussion, project and presentations

Evaluation:

Quizzes
Mid-term
Project & Presentation
Class Participation

20%
40%
30%
10%

Evaluation Pattern: Absolute cum relative grading; absolute cut off for different grades
are given in student manual. Overall Weightage will be 50% of the course.
Supplementary Readings:
1. Paul A Samuelson and William D. Nordhans- ECONOMICS
2. Olivier Blanchard (2006), Macroeconomics Fourth Edition Pearson