Macroeconomics Theory and Policy by HL 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 trade balance. Macroeconomics also analyzes the effects of fiscal and monetary policies on the economy and its stability.
One of the most comprehensive and popular textbooks on macroeconomics is Macroeconomics Theory and Policy by HL Ahuja. The book was first published in 2010 and has been revised and updated several times since then. The book covers all the important theories and policies of macroeconomics in a clear and rigorous manner. It also provides relevant examples and applications from both developed and developing economies.
The book is divided into six parts: Part I deals with the basic concepts and models of macroeconomics, such as national income accounting, classical and Keynesian theories of income and employment, consumption function, investment demand, multiplier, aggregate demand and supply, and unemployment. Part II discusses the IS-LM model, inflation-unemployment tradeoff, rational expectations theory, new Keynesian economics, and supply-side economics. Part III examines the nature and role of money, credit and banking, central banking, money supply and demand, liquidity preference theory, and post-Keynesian theories of money. Part IV focuses on money, prices, and inflation, including quantity theory of money, money-income causation, monetarism, inflation causes and effects, Phillips curve, expectations-augmented Phillips curve, adaptive expectations hypothesis, natural rate hypothesis, cost-push inflation, stagflation, hyperinflation, anti-inflation policies, indexation, and inflation targeting. Part V explores business cycles and macroeconomic policy, including analysis of business cycles, Kaldor's model, Goodwin's model, monetarist and new classical theories of business cycles, real business cycle theory, fiscal policy, monetary policy, government budget constraint, crowding out effect, Ricardian equivalence theorem, automatic stabilizers, discretionary stabilizers,
Part VI deals with the open economy macroeconomics, including balance of payments, foreign exchange market, exchange rate determination, purchasing power parity theory, interest rate parity theory, flexible and fixed exchange rate systems, exchange rate regimes, foreign exchange intervention, sterilization, international monetary system, balance of payments adjustment mechanisms, Mundell-Fleming model, international macroeconomic policy coordination, and globalization.
The book also contains appendices on mathematical methods in economics, national income accounting in India, and selected macroeconomic data for India. The book is well-written and well-organized, with ample diagrams, tables, and numerical examples. The book also provides review questions, problems and exercises, and suggested readings at the end of each chapter. The book is suitable for undergraduate and postgraduate students of economics, as well as for researchers and practitioners in the field.
Macroeconomics Theory and Policy by HL Ahuja is a comprehensive and authoritative textbook on macroeconomics that covers both theoretical and policy aspects of the subject. The book is based on the latest developments and empirical evidence in macroeconomics. The book is also relevant for the Indian context and provides insights into the macroeconomic issues and challenges faced by the country. The book is a valuable resource for anyone interested in learning and understanding macroeconomics. c481cea774