MACRO ECONOMICS AND  FINANCIAL SYSTEM OF PAKISTAN

1.         ESSENTIAL OF MACROECONOMICS AND BASIC CONCEPT

Macroeconomics: Introduction and Basic Issues

• Why Study Macroeconomics
• Macroeconomic issues, Goals and Policies
• Macroeconomic Methods
• Controversies in Modern Macroeconomics

National Income Accounting

• National Economic Models
• Measuring National Product Expenditures approach vs adding income payments
• Price Indexes; Use of Price Indexes to correct for inflation
• Problem in Using GNP as a measure of Welfare

National Accounting in Pakistan

• Methodology and Problems
• Price Indexes; Measurement of Inflation

Measurement of Poverty in Pakistan

• Poverty Reduction Strategy
• Safety Nets
• Lorentz Curve and Inequitable Distribution of Income

2. BASIC FRAME WORK OF MACROECONOMICS

Policy options for Pakistan

• Fiscal developments
• Money and credit
• Controlling of inflation
• Evaluation of various policy options for controlling inflation

3.         Anatomy of inflation and unemployment.

Relating Out Put and Inflation

• Various types of inflation
• Causes of inflation : Negative impact of inflation
• Various types of unemployment
• Okuns’ law
• Short run Phillips curve
• Macro economic policy and Phillips curve
• The long run Phillips curve

5. International Adjustments

Policy Responses in an Open Economy

• Balance of Payment and Foreign Trade
• Current and Capital Accounts
• Exchange Rate Systems
• Real Exchange Rate and the Interest rate
• Closed economy and open economy
• Monetary and Fiscal Policy in Fixed and Flexible Exchange Rate regimes
• Pakistan’s case: Balance of Payment and Exchange Rate Policies

Financial System of Pakistan

Financial System and Policy

• Major functions of financial policy in a developing country 
• Financial Intermediation
• Shallow Finance
• Financial Deepening
• Need for financial deepening in a developing economy
• Strategies  for financial deepening

Financial Institution Structure in Pakistan

• Money Market and its Components
• Capital Market
• State Bank of Pakistan, its organization and Major. Traditional and

Non-Traditional functions

• Commercial Banking Structure in Pakistan
• Non-Banking Financial Institutions
• Development Finance
• Specialised Credit Institutions
• Impact of Nationalization of Commercial Banking
• Re-defined Role of State Bank of Pakistan

Financial Sector Reforms in Pakistan

• Factors hampering financial intermediation
• Financial Repression.
• Financial Sector Reforms. Importance and Scope
• De-regulation and Liberalization of Financial Sector
• Globalization: Integration with World Financial Sector
• Privatization of Banking Sector
• Strengthening of Supervisory Controls : SBPs’ role.

Challenges for 21^st Century

• Innovation challenges
• Interest Free Banking
• New Areas of Financing

RECOMMENDED READING MATERIAL

1.       Pakistan, Institute of Bankers                Economics

2.       Pakistan, Institute of Bankers                Challenges for Banking Sector of Pakistan in

 21^st Century

3.      Rudiger Dornbusch                                Macroeconomics

    Stanely Fischer, Rechard Stariz           (Macgraw Hill Higher Education 8^th Edition 2001

SUPPLEMENTARY READINGS

1.         Dr. Ishart Husain                                  Pakistan – The Economy of an Elitist State

2.         Pakistan, Institute of Bankers                Challenges for Banking Sector of Pakistan in

21^st Century

3.         Zaidi Akbars                                        Issues in Pakistan Economy

                                                                        Oxford University 2001

4.         Pakistan, State Bank of             Financial Sector Assessment (Latest)

SBP’s, Annual Publication                   

5.         Pakistan, State Bank of             Banking System Development (Latest)

SBP’s Quarterly Publication                 

6.         Pakistan, State Bank of             Annual and Quarterly reports (Latest)

-.-.-.-.-