Macroeconomics Theory and Policy by H.L. Ahuja: A Review
Macroeconomics is the branch of economics that studies the behavior and performance of the economy as a whole. It deals with aggregate variables such as national income, output, employment, inflation, interest rates, and exchange rates. Macroeconomics also analyzes the effects of fiscal and monetary policies on the economy and its growth.
One of the most popular and comprehensive textbooks on macroeconomics is Macroeconomics: Theory and Policy by H.L. Ahuja. The book was first published in 1984 and has been revised and updated several times since then. The latest edition was published in 2020 by S. Chand Publishing.
The book covers all the important theories and policies of macroeconomics in a clear and systematic manner. It traces the relevance of Keynesian theories to the developing economies and has critically examined the post-Keynesian developments. The book also incorporates the recent developments in macroeconomics such as monetarism, rational expectations, supply-side economics, new Keynesian economics, real business cycle theory, and endogenous growth theory.
The book is divided into six parts: (1) Theory of Income and Employment, (2) IS-LM Model, Inflation-Unemployment Trade-off and Recent Developments in Macroeconomics, (3) Monetary Demand and Supply, (4) Money, Prices and Inflation, (5) Business Cycles and Macroeconomic Policy, and (6) Government's Budget Constraint and Fiscal Policy. Each part consists of several chapters that explain the concepts, models, and applications of macroeconomics with the help of diagrams, tables, examples, and exercises.
The book is suitable for undergraduate and postgraduate students of economics as well as for researchers, policy makers, and practitioners who want to understand the macroeconomic issues and challenges facing the world today. The book is also available in PDF format for online access and download.
Macroeconomics: Theory and Policy by H.L. Ahuja is a must-read for anyone who wants to learn about the principles and practices of macroeconomics in a comprehensive and rigorous way. Here is the continuation of the HTML article for the keyword "macroeconomicstheoryandpolicyhlahujapdf235": Part I: Theory of Income and Employment
The first part of the book consists of seven chapters that deal with the basic concepts and theories of income and employment determination. The chapters are:
Chapter 1: Introduction to Macroeconomics
Chapter 2: National Income Accounting
Chapter 3: Classical Theory of Income and Employment
Chapter 4: Keynesian Theory of Income and Employment
Chapter 5: Consumption Function and Saving Function
Chapter 6: Investment Function and Multiplier
Chapter 7: Accelerator and Super-Multiplier
In this part, the author introduces the scope, objectives, and methods of macroeconomics and explains the concepts and methods of measuring national income. The author then compares and contrasts the classical and Keynesian theories of income and employment and shows how they differ in their assumptions, implications, and policy recommendations. The author also discusses the determinants and functions of consumption, saving, and investment and their role in influencing the level of income and employment. The author also explains the concepts of multiplier and accelerator and their effects on income, output, and employment.
Part II: IS-LM Model, Inflation-Unemployment Trade-off and Recent Developments in Macroeconomics
The second part of the book consists of eight chapters that deal with the integration of goods market and money market equilibrium, the trade-off between inflation and unemployment, and the recent developments in macroeconomic theory. The chapters are:
Chapter 8: IS-LM Model
Chapter 9: Aggregate Demand and Aggregate Supply
Chapter 10: Inflation-Unemployment Trade-off: Phillips Curve
Chapter 11: Monetarism
Chapter 12: Rational Expectations Hypothesis
Chapter 13: Supply-Side Economics
Chapter 14: New Keynesian Economics
Chapter 15: Real Business Cycle Theory
In this part, the author presents the IS-LM model as a tool to analyze the simultaneous equilibrium of goods market and money market. The author also shows how the aggregate demand and aggregate supply curves can be derived from the IS-LM model and how they can be used to analyze the short-run and long-run effects of fiscal and monetary policies. The author then examines the relationship between inflation and unemployment as depicted by the Phillips curve and its modifications. The author also reviews the main features and criticisms of monetarism, rational expectations hypothesis, supply-side economics, new Keynesian economics, and real business cycle theory.
Part III: Monetary Demand and Supply
The third part of the book consists of six chapters that deal with the theory and practice of money demand and supply. The chapters are:
Chapter 16: Money Demand: Classical Approach
Chapter 17: Money Demand: Keynesian Approach
Chapter 18: Money Demand: Post-Keynesian Approaches
Chapter 19: Money Supply: Concepts and Measures
Chapter 20: Money Supply: Determinants
Chapter 21: Money Supply Process in India
In this part, the author explains the various approaches to money demand, such as the classical approach, the Keynesian approach, the Baumol-Tobin approach, the Friedman approach, the portfolio approach, and the transactions approach. The author also discusses the concepts and measures of money supply, such as M0, M1, M2, M3, M4, etc. The author also analyzes the determinants of money supply, such as reserve ratio, currency ratio, deposit ratio, etc. The author also describes the money supply process in India, such as reserve money creation, money multiplier, high-powered money, etc.
Part IV: Money, Prices and Inflation
Here is the continuation of the HTML article for the keyword "macroeconomicstheoryandpolicyhlahujapdf235": Part IV: Money, Prices and Inflation
The fourth part of the book consists of seven chapters that deal with the theory and measurement of money, prices, and inflation. The chapters are:
Chapter 22: Quantity Theory of Money
Chapter 23: Cambridge Approach to Quantity Theory of Money
Chapter 24: Price Level: Concepts and Measurement
Chapter 25: Inflation: Concepts and Measurement
Chapter 26: Inflation: Causes and Effects
Chapter 27: Inflation: Theories and Policies
Chapter 28: Inflation in India
In this part, the author discusses the classical and Cambridge approaches to the quantity theory of money and their implications for the relationship between money supply, velocity of circulation, price level, and output. The author also explains the concepts and measurement of price level, such as consumer price index, wholesale price index, GDP deflator, etc. The author also explains the concepts and measurement of inflation, such as headline inflation, core inflation, cost-push inflation, demand-pull inflation, etc. The author also analyzes the causes and effects of inflation on various economic variables, such as output, employment, income distribution, balance of payments, etc. The author also reviews the various theories and policies of inflation, such as monetarism, structuralism, rational expectations, supply-side economics, etc. The author also describes the trends and determinants of inflation in India.
Part V: Business Cycles and Macroeconomic Policy
The fifth part of the book consists of six chapters that deal with the theory and practice of business cycles and macroeconomic policy. The chapters are:
Chapter 29: Business Cycles: Concepts and Features
Chapter 30: Business Cycles: Theories
Chapter 31: Business Cycles: Stabilization Policies
Chapter 32: Fiscal Policy
Chapter 33: Monetary Policy
Chapter 34: Macroeconomic Policy in India
In this part, the author introduces the concepts and features of business cycles, such as phases, amplitude, duration, frequency, etc. The author also discusses the various theories of business cycles, such as Keynesian theory, multiplier-accelerator theory, Samuelson-Hicks model, Kaldor model, Goodwin model, etc. The author also evaluates the various stabilization policies to smooth out the fluctuations in income and employment, such as automatic stabilizers, discretionary fiscal policy, monetary policy, etc. The author also explains the objectives, instruments, and effects of fiscal policy and monetary policy on aggregate demand and supply. The author also describes the macroeconomic policy framework in India, such as fiscal responsibility and budget management act (FRBM), monetary policy committee (MPC), inflation targeting (IT), etc.
Part VI: Government's Budget Constraint and Fiscal Policy
The sixth part of the book consists of four chapters that deal with the government's budget constraint and fiscal policy. The chapters are:
Chapter 35: Government's Budget Constraint
Chapter 36: Ricardian Equivalence Theorem
Chapter 37: Government Debt and Deficits
Chapter 38: Fiscal Policy in an Open Economy
In this part, the author explains the government's budget constraint and its implications for fiscal policy. The author also discusses the Ricardian equivalence theorem and its assumptions and criticisms. The author also analyzes the effects of government debt and deficits on interest rates, crowding out effect, inter