ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Between Tradition and Modernity

Open Economy Macroeconomics

Macroeconomics and Markets in Developing and Emerging Economies by Ashima Goyal, Oxon and New York: Routledge, 2017; pp xix + 374, ₹ 1,095 (hardback).


This is a difficult time to be a teacher of macroeconomics. Much of contemporary research in macroeconomics makes uses of models in which agents solve dynamic optimisation models under conditions of uncertainty. There exist many excellent monographs and advanced texts teaching the use of these models, but they are accessible only to readers with substantial grounding in mathematical analysis and probability theory. Students entering postgraduate programmes in economics in India often do not have this level of preparedness. As a result, they struggle to make sense of contemporary macroeconomics. Even when they do succeed in deciphering the mathematics, the excessive focus on techniques leads to many of them missing the forest for the trees. As a result, they find the subject dry and tedious to learn. Anticipating this, teachers are tempted to confine themselves to simpler approaches long superseded in the research literature in the hope that they would be able to convey at least some economic understanding to their students.

One way to solve this problem would be to increase the opportunities for students of economics to learn the necessary mathematics at the undergraduate level and then to utilise this training as a prerequisite for admission to postgraduate economics programmes. Another solution would be to remove macroeconomics from the core postgraduate curriculum, making it an elective chosen by students who have adequate training in mathematics. The increasing specialisation in economic research provides a good argument for reducing the postgraduate core, and macroeconomics courses taught after postgraduate-level microeconomics and econometrics can be much richer.

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Updated On : 8th Feb, 2019
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