UNIVERSITY OF MADRAS

INSTITUTE OF DISTANCE EDUCATION

MA ECONOMICS
Choice Based Credit System
(with effect from the academic year 2018 – 2019
SCHEME OF EXAMINATION:

SEMESTER I MAX

CREDIT

TOTAL
MARKS
COURSE SUBJECTS INT EXT
COMPONENT
Core Paper-I Micro Economics – I 4 20 80 100
Core Paper-II Indian Economics – I 4 20 80 100
Core Paper-III Statistics for Economists 4 20 80 100
Core Paper-IV Environmental Economics - I 4 20 80 100
Elective Paper-I Agriculture Economics 3 20 80 100

SEMESTER II MAX

CREDIT

TOTAL
MARKS
COURSE SUBJECTS INT EXT
COMPONENT
Core Paper-V Micro Economics – II 4 20 80 100
Core Paper-VI Indian Economics – II 4 20 80 100
Core Paper-VII Mathematics for Economics 4 20 80 100
Core Paper-VIII Econometrics 4 20 80 100
Elective Paper-II Industrial Economics 3 20 80 100

SEMESTER III MAX

CREDIT

TOTAL
MARKS
SUBJECTS INT EXT
COURSE
COMPONENT
Core Paper- IX Macro Economics – I 4 20 80 100
Core Paper- X Public Finance – I 4 20 80 100
Core Paper- XI International Economics – I 4 20 80 100
Core Paper- XII Development Economics - I 4 20 80 100
Elective Paper- III Economics of Infrastructure 3 20 80 100

MAX
CREDIT

SEMESTER IV
TOTAL

MARKS
SUBJECTS INT EXT
COURSE
COMPONENT
Core Paper- XIII Macro Economics – II 4 20 80 100
Core Paper- XIV Public Finance – II 4 20 80 100
Core Paper- XV International Economics - II 4 20 80 100
Core Paper- XVI Development Economics - II 4 20 80 100
Elective Paper-IV Computer Application in Economic Analysis 3 20 80 100

1
 CREDIT DISTRIBUTION
CREDITS
Core Paper 16 X 4 64
Elective 4X3 12
TOTAL 76

MA ECONOMICS
Choice Based Credit System
(To take effect from the academic year 2018 – 2019)
REVISED SYLLABUS
SEMESTER – I

CORE PAPER I-MICRO ECONOMICS – I

UNIT I: ADVANCES IN DEMAND THEORY

Modern utility analysis of choices involving risk or uncertainty – Bernoulli,Neumann
Morgenstern, Friedman Savage and Markowitz Hypotheses-Revealed preference theory and
derivation of demand-indifference curve-Hicks revision of demand theory-Logical ordering.

UNIT II: THEORY OF PRODUCTION

The production Function – Production Function – short and long run – Relation between
returns to scale and returns to factor – Cobb-Douglas and CES Production Functions –Single
and Multi-product Firms.

UNIT III: THEORY OF COSTS

Total Revenue, Marginal Revenue. Cost Functions – The Traditional Theory of Cost: Short-
Run Costs; Long-Run Costs-‘The Envelope Curve’ – Modern Theory of Costs: Short- Run
Costs; Long-Run Costs-‘The L-Shaped’ Scale Curve – The Relevance of the Shape of Cost
Curves in Decision-making.

UNIT IV: THEORY OF THE FIRM: PERFECT COMPETITION/ MONOPOLY

Market Structure – Perfect Competition – Assumptions – Short-Run Equilibrium – Long-Run
Equilibrium – Dynamic Changes and Industry Equilibrium. Definition – Demand and
Revenue – Equilibrium of the Monopolists: Short-Run Equilibrium – Long-Run Equilibrium
– Comparison of Pure Competition and Monopoly – the Multi-plant Firm – Bilateral
Monopoly – Price Discrimination.

UNIT V: THEORY OF THE FIRM :MONOPOLISTIC COMPETITION AND OLIGOPOLY

Monopolistic Competition – Equilibrium of the Firm – Excess Capacity – Selling Cost –
Comparison with Pure Competition. Oligopoly: Non-Collusive Oligopoly – Cournot; The
Kinked-Demand and Stackelberg Models. Collusive Oligopoly – Cartels – Price leadership.

RECOMMENDED TEXT:
1. Koutsoyiannis. A. : Modern Microeconomics 2nd edition, Macmillan
2. Hal. R. Varian :Intermediate Micro Economics- Modern Approach, 4thedn,
W.W. Narton& Company.
3. W.J.Baumol and Alan Blinder – Micro Economics, Newyork University.

2
BOOKS FOR REFERENCE:
1.Baumol.W.J., (1978) : Economic Theory and Operations Analysis, Prentice
Hall of India.
2.Green, H.A.J (1974) : Consumer Theory, 2nd Edition, Macmillan.
3. Jack Hirschleifer (1980) : Price Theory and Applications, 2nd Edition,
Macmillan
4.Richard, H. Leftwich : The Price System and Resource Allocation.

CORE PAPER II - INDIAN ECONOMICS – I

UNIT I
Meaning of under development – Economic Development and Economic Growth – Major
issues of Economic Development – Economic and Non-economic factors - Features of Indian
Economy - National Income – concepts – measurement and problems –National income at
factor cost and at Market price - National income of India- Trends in National income

UNIT II
Evolution of planning – success and failures of five year plans in India – Public sector and
Indian planning – Disinvestment – twelfth five year plan – inclusive and sustainable growth –
infrastructure and Economic development – Macro perspective – Impact – trends.

UNIT III
Human development –Measurement - Human development index – progress of human
development in India – Poverty – Multidimensional poverty Index – reforms–causes of
poverty – growth and inequality – poverty and inclusive growth -comparison of poverty in
India and China – Poverty alleviation programmes in India- Inequality after economic
reforms in 1991 – Economic development and population growth – India’s demographic
transition – Gender equity and Demographic transition – India’s Demographic dividend and
its impact of economy – Population policies of India.

UNIT IV
Unemployment and employment perspective – concepts and measurements – labour force
and workforce participation rates – characteristics of Indian labour markets – trends and
pattern of employment growth –growth in employment, GDP and employment elasticity -
Employment and labour policy – Indian labour laws and labour markets – Public employment
programmes for unorganised workers – case of NREGA

UNIT V
Importance of Agriculture in National Economy- Agriculture growth- Green Revolution and
Land reformation-its impact –performance of Agriculture sector in five year plans –
agriculture and rural India – rural distress in post-reform India – Agriculture policies – Food
Management – recent policy initiatives Pubic Distributive system in India - – food security
and future sources of growth in Agriculture – food subsidy

BOOKS FOR REFERENCE

1. Indian Economy: performance and policies - UMA KAPILA
2. India Economy since Independence - UMA KAPILA
3. RuddarDutt and KPM. Sundharam: Indian Economy

3
 CORE PAPER III- STATISTICS FOR ECONOMISTS

UNIT - I
Probability – Theorems- Addition- Multiplication-Conditional Probability – Bayes Theorem
Mathematical Expectation-Theoretical Distribution– Normal-Binomial and Poisson

UNIT - II
Index Number – Types of Index Numbers – Construction of Consumer Price Index –
Wholesale Price and Production Indices in India.

UNIT - III
Analysis of Time Series – Measurement of Trend – Semi Averages, Moving Averages -
method of Least Square- Simple Correlation – Partial Correlation - Regression

UNIT - IV
Hypothesis Testing, Standard Error – Large Sample Test for Two Means and Two Standard
Deviations – Two Proportion and Confidence Interval Small Sample Test – t-Test – Paired t-
Test-Chi Square Test

UNIT - V
F Test- Analysis of Variance One Way - Two Way Classifications-Design of Experiments-
Latin Squares.

RECOMMENDED TEXT:
1. Gupta .S.P. Statistical Methods, Sultan Chand and Sons,New Delhi, 2005
2. Sancheti. DC and Kapoor .VK Statistical Theory-Method and Application, Sultan Chand and
Sons, New Delhi, 2005.
3. Shukla .MC &Gulshan.SS, Statistical Theory and Practice. Sultan Chand and Sons,
New Delhi, 2000.

Core Paper – IV: ENVIRONMENTAL ECONOMICS

UNIT - I: INTRODUCTION
The services provided by the environment for the economic system - Environment for the
economic system - The flow of environmental resource

UNIT - II: ECONOMIC ROOTS OF ENVIRONMENTAL DAMAGE

The market as allocation and mechanism: Conditions for efficient allocation - Market failure
and the environment: E environmental damage as an “eternality”, environment as “Public
good”, The “tragedy of the commons”

UNIT - III: ECONOMIC INSTRUMENTS FOR ENVIRONMENTAL PROTECTION

The concept of “Optimum Pollution” - Limitations of Command-and –Control policy -
Pollution Tax - Tradable permits- Property rights to environmental goods (Coase solution)

UNIT - IV: THE ECONOMIC VALUE OF NATURE

The meaning to economic value: Willingness to pay - Types of environmental value: Use and
non-use values - Cost-benefit analysis - “Stated Preference and revealed preference”
approaches to environmental valuation
4
UNIT - V: CLIMATE CHANGE, SUSTAINABLE DEVELOPMENT
Sources of climate change, economic consequences of climate change - Economic Policy for
climate change: costs and benefits of mitigation and adaptation - Definition of sustainable
development, Policy for sustainable development - Poverty –development interrelationship.

BOOKS FOR REFERENCES

1. Charles D. Kolstad (2003),Environmental Economics, Oxford University Press, New
York.
2. Nick Hanley, Jason F. Shogren and Ben White (1999), Environmental Economics: In
Theory and Practice, Macmillan India Limited, New Delhi.
3. Barry C. Field (1997), Environmental Economics: An Introduction, McGraw-Hill
Companies, Singapore.
4. UlaganathanSankar (2008), Environmental Economics, Oxford University Press, New
Delhi.
5. Rabindra N. Bhattacharya (2005), Environmental Economics: An Indian Perspective,
Oxford University Press, New Delhi.
6. Katar Singh and Anil Shishodia (2007), Environmental Economics: Theory and
Applications, Sage Publications,New Delhi.
7. Subhashini Muthukrishnan (2010), Economics of Environment, PHI Learning Private
Limited, New Delhi.
8. Jhingan, M.L. and Chandar K. Sharma (2007), Environmental Economics: Theory,
Management and Policy, Vrinda Publications (P) Ltd., Delhi.
9. A. Jonathan Lesser, Daniel E. Dodds and Richard O. Zerbe Jr. (1997), Environmental
Economics and Policy, Addison-Wesley Ltd., New York.
10. Anil Markandya and Julie Richardson (eds.) (1992), the Earthscan Reader in
Environmental Economics, Earthscan Publications Ltd., London.
11. M.V. Joshi (2001), Theories and Approaches of Environmental Economics, Atlantic
Publishers and Distributors, New Delhi.

Elective paper – I: AGRICULTURAL ECONOMICS

UNIT - I
Agricultural Production and Productivity: Resource use and efficiency - Production function
analyses in agriculture - Factor combination and resource substitution - Cost and supply
curves - Size of farm and laws of returns - Theoretical and empirical findings - Farm
budgeting and cost concepts - Supply response of individual crops and aggregate supply.

UNIT - II
Economics of Rural Infrastructure: Use of land, water and energy - Rural transport,
communication, banking, extension services – Role and modes - Problems of rural
electrification - Rural social infrastructure - education and health and information
dissemination - Rural Finance - Role of capital and rural credit - Organized and unorganized
capital market - Characteristics and sources of rural credit - Institutional and non-institutional
- Rural Labour - Mobility of labour and segmentation in labour markets - Marginalisation of
rural labour - Nature, extent and trends in rural unemployment - Agricultural wages in India -
Male-female wage differences - Non-agricultural rural employment - Trends and
determinants.

5
UNIT - III
Diversification of Rural Economic Activities: Livestock economics - Livestock resources and
their productivity - Problems of marketing - White Revolution - Fishery and poultry
development - Forestry, horticulture and floriculture - Issues and problems in rural
industrialization and development of agro-based industries.

UNIT - IV
Agricultural Growth in India: Recent trends in agricultural growth in India - Inter-regional
variations in growth of output and productivity - Cropping pattern shifts - Supply of inputs -
Irrigation, power, seed and fertilizers - Pricing of inputs and role of subsidies - Distribution of
gains from technological change - Role of Public investment and capital formation in Indian
agriculture - Strategy of agricultural development and technological progress - Sustainable
agriculture - Indigenous practices - Bio-technological practices and growth potential.

UNIT - V
Agriculture and External Sector: International trade in agricultural commodities - Commodity
agreements - Role of World Trade Organization - Issues in liberalization of domestic and
international trade in agriculture - Nature and features of agri-business - Role of MNCs -
Globalization of Indian economy and problems and prospects of Indian agriculture - Impact
of World Trade Organization on Indian agriculture.

RECOMMENDED TEXT
1. Sadu and Singh – Fundamentals of agricultural economics.
2. C.B. Mamoria - Agricultural economics.

6
 SEMESTER – II

CORE PAPER V- MICRO ECONOMICS – II

UNIT- I: MODERN THEORIES OF THE FIRM

Baumol’s Theory of Sales Revenue Maximisation – Marris ‘s Model of the Managerial
Enterprise – O. Williamsons’s Model of Managerial Discretion – the Behavioural model of
Cyert and March.

UNIT – II:DISTRIBUTION THEORIES

Macro theories of distribution – Ricardian, Marxian, Kalecki and Kaldor’s – Marginal
productivity theory – Product Exhaustion theorem – Elasticity of Technical Substitution –
Theory of distribution in imperfect product and factors markets – Determination of wages,
interest and profit

UNIT – III: ECONOMICS OF INFORMATION

Asymmetric Information -Moral hazard problem, adverse selection, principal agent
problem, implications of asymmetric information, market signaling, information and
insurance.

UNIT – IV: GENERAL EQUILIBRIUM THEORY

Two Sector Model of General Equilibrium: Assumptions – Static Properties of a General
Equilibrium State – General Equilibrium and the Allocation of Resources and Money.

UNIT – V: WELFARE ECONOMICS

Criteria of Social Welfare: The Pareto-Optimality Criterion – Arrow impossibility theorem -
The Kaldor-Hicks ‘Compensation Criterion’ – the Bergson Criterion ‘Social Welfare
Function’ – Maximisation of Social Welfare.

RECOMMENDED TEXT:
1. Koutsoyiannis. A. : Modern Microeconomics 2nd edition, Macmillan
2. Hal. R. Varian :Intermediate Micro Economics- Modern Approach, 4thedn, W.W.
Narton& Company.
3. W.J.Baumol and Alan Blinder – Micro Economics, Newyork University.

BOOKS FOR REFERENCE:

1.Baumol.W.J., (1978) : Economic Theory and Operations Analysis,Prentice Hall
of India.
2.Green, H.A.J (1974) : Consumer Theory, 2nd Edition, Macmillan.
3. Jack Hirschleifer (1980) : Price Theory and Applications, 2nd Edition, Macmillan
4.Richard, H. Leftwich : The Price System and Resource Allocation.

7
 CORE PAPER VI- INDIAN ECONOMICS – II

UNIT-I
Savings and investments in India – various plan periods– its impact on Indian Economy –
factors affecting savings in India –Savings in post reform periods - Capital formation and its
determinants – growth performance of capital formation in India – External shocks and its
impact on savings, investment and capital formation in India .

UNIT-II
Industrial development and policies – New Industrial policy reforms 1991-its comparison
with previous industrial policies - performances of small, medium and large industries in
India -employment trends in manufacturing sector -– Industrial development and foreign
direct investment – strategies of disinvestment and privatisation – Industrial growth
performance in India – pre reform and post reform periods.

UNIT- III
India’s external sector – Export promotion vs import substitution – foreign trade policies -
Structural changes in India’s foreign trade during 80 and 90s – India’s services trade – Gold
and Oil trade - special economic zones –Balance of payments of India – Exchange rate
fluctuations and its impact on Indian Economy – external debt and Indian economy– external
sector reforms.

UNIT - IV
Foreign direct investment and portfolio investment in India – Foreign Aid vs Foreign direct
investment- Foreign Direct Investment and Economic Development -sectoral performance - –
growth trends of foreign direct investment – India-china comparison ––performances of
foreign institutional investments.

UNIT - V
Globalization and India–WTO negotiations and India– Impact of globalization on Indian
Economics –Pre and Post reform period - Reforms in Money market and Capital Market –
Globalization, External shocks and Indian Economy – Global financial crisis and its impact
on Indian economy – Environmental changes and sustainable development of India – issues
and challenges.

BOOKS FOR REFERENCE

1. Indian Economy: performance and policies - UMA KAPILA
2. India Economy since Independence - UMA KAPILA
3. RuddarDutt and KPM. Sundharam: Indian Economy

8
 CORE PAPER VII- MATHEMATICS FOR ECONOMICS

UNIT - I
Matrices – Matrix operations – Commutative Associative and Distributive Laws –
Determinants – Rank of a matrix – Matrix Inverse – Cramer’s Rule - Finding the values of
unknown variables in the market(Prices)

UNIT - II
Differentiation – one variable-AC,MC-AR,MR –Elasticities-Price-income-cross Elasticities-
– Conditions for Profit Maximisation and Cost Minimisation

UNIT - III
Partial Derivatives - Functions of two Variables ––– Properties of Homogenous Functions-
Euler’s Theorem- Uses of Homogenous Functions in Economics-Cobb-Douglas Production
Function.

UNIT - IV
Constrained Optimisation – Use of Lagrange Multiplier Method – Application to Utility
Maximisation, Profit Maximisation and Cost Minimisation.

UNIT - V
Elementary Integration Techniques – Indefinite Integrals – Definite Integrals – Economic
Applications of Integrals – Consumer’s Surplus and Producers Surplus

RECOMMENDED TEXT
1. Edward. T. Dowling, Mathematical Economics, 2nd Edition, McGraw Hill, New York,
1992.

BOOKS FOR REFERENCE

1. Chiang A.C. Fundamental Methods of Mathematical Economics, McGraw Hill Book
Company, New York, 1974.
2. Mehta V.L. and Madnani G.M.K, Mathematics for Economists, Sultan Chand and
Sons, New Delhi, 2005.
3. Monga, G.S. Mathematics and Statistics for Economists, Vikas Publishing House,
New Delhi, 1972.
4. K. Sydsaeter and P. Hammond, Mathematics for Economic Analysis, Pearson
Educational Asia: Delhi, 2002.

Journals:
1. Journal of Applied Mathematics
2. Journal of Mathematical Economics

9
 Core Paper – VIII: ECONOMETRICS

UNIT - I: INTRODUCTION TO ECONOMETRICS

Origin, definition, objectives and scope of econometrics, limitations of econometrics,
Methodology of econometric research, specification and estimation of an econometric model

UNIT - II: ESTIMATION AND REGRESSION ANALYSIS

Basic concept of estimation, desirable properties of estimators, Unbiasedness, Efficiency,
Consistency and Sufficiency. Correlation and regression, coefficient of determination,
estimation of an equation

UNIT - III: ESTIMATION THEORY AND PROBLEMS

Ordinary Least Squares (OLS) method-assumption, Gauss-Markov theorem standard errors
of estimates. Testing of regression coefficient; coefficient of determination-test; problems of
heterosedasticity and auto correlation (1st order); multicollinarity–their consequences, test
and remedies.

UNIT - IV: THEORETICAL DISTRIBUTION AND HYPOTHESIS TESTING

Theoretical frequency distribution, basic concept of binomial, Poisson and normal
distribution. Hypothesis testing-Design and evaluation of test: Type-I and type-II errors,
standard errors.

UNIT - V: LAG MODELS AND SUMMARY VARIABLES

Lag in econometric models-concepts, Koyck model, partial adjustments and adaptive
expectation models. Summary variable; Qualitative data, seasonal analysis, use of dummy
variables for pooled data and uses.

RECOMMENDEDTEXT:
1. Gujrati, D. (1995), Basic Econometrics, (3rd Edition), MacGraw Hill, New Delhi.
2. G.S. Madalla, Basic Econometrics.

Elective Paper – II: INDUSTRIAL ECONOMICS

UNIT – I
Meaning of Industrialisation - The role of Industry in Economic Development - Theories of
Industry - Hoffman - Chenery and Gerschenkron

UNIT – II
Concept and Organisation of a Firm - Market Structure - Sellers Concentration - Product
Differentiation - Entry Conditions - Economics of Scale - Profitability and Innovation

UNIT – III
Theories of Industrial Location - Weber - Sargant Florence - Factors Affecting Location

UNIT – IV
Growth of the Firm - Size and Growth - Growth and profitability of the Firm - Constraints on
Growth - Productivity - Efficiency - Capacity Utilisation - Concept - Measurement

10
UNIT – V
Classification of Industries - Use Based - Resource Based -Industrial Policy in India - Role of
Public and Private Sectors - Recent Trends in Industrial Growth - India as a Global Hub -
MNCs - Transfer of Technology – Liberalisation –Privatisation

BOOKS FOR REFERENCE:

1. Ahulwalia .I.J. -Industrial Growth in India, Oxford University Press, New Delhi.
2. Ahulwalia .I.J. -Industrial Growth in India,
3. Chernuliam .F -Industrial Economics; Indian Perspective, Himalaya publishing
House.
4. Desai .B - Industrial Economy in India (3rd Ed.)HPH, Mumbai.
5. Kuchhal .S.C. -Industrial Economy of India(5th Edition), Chaitanya Publishing
House.
6. Sing, AandA.N. Sadhu -Industrial Economics, Himalaya Publishing House, Mumbai.
Government of India, Economic Survey (Annual).

11
 SEMESTER – III

CORE PAPER IX- MACRO ECONOMICS – I

UNIT - I: KEY MACRO ECONOMIC VARIABLES

Aggregate Income- Expenditure and circular flow- computation of GDP – Real Vs – Nominal
GDP – Measurement of Cost of Living (CPI and WPI) – Measurement of Unemployment rate

UNIT - II: THEORIES OF CONSUMPTION AND INVESTMENT

The Consumption function and its determinants – Hypotheses of Absolute, Relative and
Permanent Incomes and Life Cycle. The Investment function and its determinants, The
Saving function and Marginal Efficiency of Capital. Investment Function – Marginal
Efficiency of Investment, Multiplier Analysis, Accelerator and Investment behavior concepts
of super multiplier.

UNIT - III: THEORY OF INCOME AND EMPLOYMENT

Basic assumptions of the classists, Says Law of Market, Classical theory of Employment
saving and Investment theory wage and price flexibility criticisms of classical theory-
Keynesian theory of employment and income - Aggregate demand – Effective Demand - The
concept of under employment equilibrium.

UNIT - IV: THEORY OF DEMAND FOR MONEY

Quantity theory of money - Fisher's and Cambridge equation, Keynesian theory of money –
Milton Friedman restatement of Quantity theory of money – Patinkin's Real Balance Effect –
Tobin's Portfolio analysis, Crisis in Keynesian economics and the revival of monetarism.

UNIT - V: THEORY OF SUPPLY OF MONEY:

RBI Approach to money supply: narrow money, broad money, reserve ( high powered)
money - open market operations - cash reserve ratio – Fractional banking - repo rate - money
multiplier - Money Supply in open economy- market for loanable funds in an open economy
- Control of money supply.

RECOMMENDED TEXT:
1. Branson, W.A.(1989) : Macroeconomic Theory and Policy, (3rd Edition), Harper and
Row, New York.
2. Shapiro, E. (1996) : Macroeconomic Analysis, Galgotia Publications, New Delhi.
3. N.GregoryMankiw : Macro Economics, Worth Publishers.

BOOKS FOR REFERENCE

1. Ackley, G. (1978) - Macroeconomics: Theory and Policy, Macmillan, New York
Blackhouse,
2. R.and A. Salansi (2000) - Macroeconomics and the Real World (2 Vols.) Oxford
University Press, London.
3. Dornbusch, R.andF. Stanley (1997) - Macroeconomics, McGraw Hill, Inc., New York.
4. GuptaS.B(1993) - Monetary Economics, S Chand Publications, New Delhi.
5. Hall, R.E. and J.B. Taylor (1986) -Macroeconomics,W.W.Norton, New York.
6. Heijdra, B.J. and V.P. Fredericck (2001) - Foundations of Modern Macroeconomics,
Oxford University Press, New Delhi.
7. Jha, R. (1991) - Contemporary Macroeconomic Theory and Policy, Wiley EasterLtd., New
Delhi.

12
8. Romer, D.L. (1996) - Advanced Macroeconomics, McGraw Hill Company Ltd.,New York.
9. Scarfe, B.L. (1977) - Cycles, Growth and Inflation, McGraw Hill, New York.
10. Surrey, M.J.C. (Ed.) (1976) - Macroeconomic Themes, Oxford University Press,
Oxford.

CORE PAPER X- PUBLIC FINANCE –I

UNIT - I: INTRODUCTION
Public Finance and Public Economics - Government in Mixed Economy – Public and Private
Sectors – Cooperation or Competition – Role of Public Enterprises in India – Pricing Policies
of Public Enterprises – Administered prices – Peak load pricing – Marginal cost pricing.

UNIT -II: PUBLIC GOODS AND PUBLIC CHOICE

Allocation, growth and stabilization function of government – private goods, public goods
and merit goods – market failure – imperfections, decreasing costs, externalities, uncertainty
and non-existence of future markets - Theory of second best – problems of allocating
resources – problems of preference revelation and aggregation of preferences – voting
systems.

UNIT - III: PUBLIC GOOD AND TAXATION

Samuelson theory of public goods - Lindahl solution, theory of clubs, median voter
theorem, theory of rent seeking-Taxation :Theories of Taxation –– Concept of Excess Burden
of Taxes – Excess burden of an Excise Tax – Excess burden of Tax on Wage incomes– direct
Vs. Indirect taxes, efficiency and equity, dead weight loss (income tax, commodity tax)

UNIT -IV: TAXATION AND PUBLIC DEBT

Taxation and labour supply, taxation and savings, risk-taking and wealth, general
equilibrium (Herberger) models of tax incidence, theory of optimal taxation- Deficit
Financing- Concept of Burden of Public debt – Compensatory aspect of debt policy – debt
management

UNIT - V: BUDGETING
Budgeting-type of budgeting-public budget, kinds of budgets, zero based budgeting-
programme and performance budgeting-Union and State government Budgets-Neutral and
compensatory and functional finance-balanced budget multiplier.

RECOMMENDED TEXT:
1. Bhargava (2004) : Public finance, Its Theory and working in
India, Chaitanya Publishing House.
2. Musgrave, R.A. (1959) : The Theory of Public Finance, McGraw
Hill, Kogakhusa, Tokyo
3. Musgrave, R.A. and P.B. Musgrave (1976) : Public Finance in Theory and Practice,
McGraw Hill, Kogakusha, Tokyo.
BOOKS FOR REFERENCE
1. Atkinson, A.B. and J.E. Siglitz (1980) : Lectures on Public Economics, Tata
McGraw Hill, New York.
2. Auerbach, A.J. and M. Feldstern (Eds.) (1985) : Handbook of Public Economics,
Vol. I, North Holland, Amsterdam.

13
 3. Buchanan, J.M. (1970): The Public Finances, Richard D. Irwin, Homewood.
4. Goode, R. (1986)Government Finance in Developing Coutnries, Tata McGraw
Hill,New Delhi.
5. Houghton, J.M. (1970) : The Public Finance : Selected Readings, Penguin,
Harmondsworth.
6. Jha, R. (1998) Modern Public Economics, Routledge, London.
7. Menutt, P. (1996) : The Economics of Public Choice, Edward Elgar, U.K.
8. Shoup, C.S. (1970) : Public Finance, Aldine, Chicago.
9. Shome, P. (Ed.) (1995):Tax Policy : Handbook, Tax Division, Fiscal Affairs
Department, International Monetary Fund, Washington D.C.

CORE PAPER XI- INTERNATIONAL ECONOMICS – I

UNIT- I
Nature and scope of international economics – Inter-regional and International Trade-
theories of International trade – Basic concepts: - Community Indifference Curve –– offer
curve -Classical theories – Adam Smith – David Ricardo –– J.S.Mill’s reciprocal theory –
Heberler and Opportunity cost theory

UNIT - II
Modern theory of International Trade – Huckster-Ohlin theory of International Trade ––
Superiority of H-O theory over classical theories of International Trade –– Factor price
equalisation theorem –factor price and factor reversals – obstacles – Lerner and Kindelberger
analysis of factor price equalisation theorem- Stopler-samuelson theorem –
Rybczynskitheorem-

UNIT - III
Inter- industry trade and Intra-industry trade- differences –global pattern of intra industry
trade –An explanation of Intra-industry trade

UNIT- IV
Economies of Scale and Trade: Differential products and trade, differences in taste and
Trade; The specific factor model – single and two specific factor case – Technological Gap
and product cycle models– increasing returns to scale

UNIT - V
Terms of Trade – concepts of terms of trade – Determinants of Terms of trade – static and
dynamic gains from trade – Samuelson on gains from trade – immiserising growth –
Economic Growth and trade -Technical progress and Trade – Hicksian graphical analysis –
neutral, capital and labour saving technologies and its impact on terms of trade- Prebisch-
singer thesis – impact of deterioration of terms of trade on developing countries.

RECOMMENDED TEXT:
1. International Economics – Bo sodersten
2. International economics paulkrugman
3. International Economics – K.C.Rana and K.C.Verma
4. International Economics theory and policy – D.N Dwivedi

14
BOOK REFERENCES
1. International trade theory and policy – Giancarlo Gandolfo
2. International Economics: Miltiades Chacholiades
3. International Economics – K.C.Rana and K.C.Verma
4. International Economics Francis cherunilam

CORE PAPER XII- DEVELOPMENT ECONOMICS – I

UNIT - I: INTRODUCTION
Features of less developed economics- Similarities and differences
Distinction between growth and development; Indicators of development: GDP as
development indicator; purchasing power points; Human Development Index

UNIT - II: INEQUALITY, POVERYT & DEVELOPMENT

Measuring inequality: Lorenz curve and Gini co-efficient
Economic growth and inequality: Kuznets inverted U Hypothesis; consequences of inequality
Measuring Poverty: Head count index, income gap index and capability poverty ---
The impact of growth and poverty

UNIT - III: THEORIES OF DEVELOPMENT - I

Adam smith’s Theory
Malthus Theory
Ricordo’s Theory
Marx Theory of Capitalist development

UNIT –IV: THEORIES OF DEVELOPMENT - II

Development with unlimited supplies of labour (Lewis Theory)
Schumplter’s Theory of development
Rostow’s Stages of growth theory
UNIT –V: THEORIES OF GROWTH
Harrod-Damon model
Solow ; growth theory: the convergence hypothesis, Solow residual
New growth theory (Romer)

RECOMMENDED TEXT
1. Adelman, I (1961) : Theories of Economic Growth and Development, Stanford
University Press, Stanford.
2. Thirillwall, A.P. (1978) : Growth and Development, 2ed. Macmillan
3. Michael P. Todaro and Stephen C. Smith (2003): Economic Development, Pearson
Education Pte. Ltd., Singapore.

BOOKS FOR REFERENCE:

1. Chakravarthy, S. (1982): Alternative Approaches to a theory of Economic Growth,
Oxford UniversityPress.
2. Chakravarthy, S. (1989): Development Planning: The Indian Experience, Clarendon
Press.
3. Chatak, S. (1986) An Introduction to Development Economics, Allen and Unwin.
4. Kindleberger, C.P. (1977) : Economic Development 3ed McGraw Hill.

15
 5. Meler, G.M. (ed.) (1984) : Leading Issues in Economic Development 4ed. Oxford
University Press.
6. Mair, G.M., and D. Seers (Eds.) (1987): Pioneers in Development, Oxford
University Press.
7. Pathway to Economic Development by Amilaya Krishna Dutt (New Delhi, Oxford
University Press, 2014).

Elective Paper – III: ECONOMICS OF INFRASTRUCTURE

UNIT-I
Infrastructure and economic development – Infrastructure as a public good; Social and
physical infrastructure; Special characteristics of utilities. The peak-load, Off-Load Problem,
Dual Principle Controversy

UNIT-II
The structure of Transport Costs and Location of Economic Activities. Demand for
Transport. Models of Freight and Passenger Demand. Model Choice; Cost Functions in the
Transport Sector. Principle of Pricing. Special Problems of Individuals Modes of Transport.

UNIT-III
Primacy of Energy in the Process of Economic Development- Factors Determining Demand
for Energy; Effects of Energy Shortages- Energy Conservation-Renewable and Non-
conventional Sources of Energy- The search for an Optimal Energy Policy in the Indian
Context.

UNIT-IV
Organization and Financing of Services - Private vs. Public Sector Financing - the fixation of
prices of social services-Health, Education and Human Development Concept- scope and
relevance of Human Resource Development - Education and Economic Growth - Educational
Planning -Social Demand -The case for Universal, Free, Primary Education; Structure of
higher
education and problems of its financing in India; The issues in education policy – importance
of health and its impact on Economic development.

UNIT –V
Infrastructure in Modern India – strategies for Infrastructure development – differences in
infrastructure building between China and India – infrastructure investments in India –
prioritization of infrastructure sectors for development – Macro perspective of Infrastructure
development in India - Infrastructure and Plans.

RECOMMENDED TEXT
1. Crew, M.A. P.R. Kleindorfer (1979), Public Utility Economics, Macmillan, London.
2. Indian Council of Social Sciences Research (ICSSR)(1976), Economics of
Infrastructure, Vol. VI,New Delhi.
3. National Council of Applied Economic Research (NCAER) (1996), India
Infrastructure Report;
4. Policy Implications for Growth and Welfare, NCAER, New Delhi.
5. Parikh, K.S. (Ed.) (1997), India Development Report , Oxford, New Delhi.
6. Turvey. R. (Ed.) (1968), Public Enterprises, Penguin, Harmondwoth.

16
BOOKS FOR REFERENCE
1. Goyal, S.K. (Ed.) (1995), Public Enterprises, Indian Institute of Public
Administration, New Delhi.
2. Panchamukh, P.R. (1980), Economics of Health: A Trend Report in ICSSR, A
Survey of Research in Economics, Vol. VI, Infrastructure, Allied, Delhi.
3. Tilak, J.B.G. (1994), Education for Development in Asia, Sage Publications,
New Delhi.

17
 SEMESTER – IV

CORE PAPER XIII- MACRO ECONOMICS II

UNIT – I: KEYNESIAN THEORY THROUGH IS-LM FRAMEWORK

IS-LM Model – Derivation of IS-LM Curves - Fiscal Policies in IS-LM Framework -
Monetary Policies in IS-LM Framework - Policy Implications of Keynesian Economics:
Philips Curve

UNIT – II: MONETARISM

The Crisis in Keynesian Theory: Stagflation - Expectations Augmented Philips Curve
(NAIRU) Policy Implications of Monetarism

UNIT III: NEW CLASSICAL ECONOMICS AND NEW KEYNESIAN ECONOMICS

New Classical Economics: Rational Expectations Hypothesis – The Concept of Policy
Irrelevance - Policy Implications of New Classical Economics - New Keynesian Economics:
Similarities and Differences between Traditional Keynesian Economics and New Keynesian
Economics - Explaining the Upward Slopping Short run Aggregate Supply Curve through
Sticky Wages and Sticky Prices - Policy Implications of New Keynesian Economics

UNIY - IV: BUSINESS CYCLE:

Theories of Schumpeter, Kaldor, Samuelson, Hicks and Goodwin model, Control of Business
Cycles, relative Efficiency of Monetary and Fiscal Policies

UNIT - V: OPEN ECONOMY AND MACRO ECONOMY

The GDP in an Open Economy - Capital Movement and Interest Rate Parity - Mundell–
Fleming model – Merits - Dangers of Free Capital Flows–The Global Recession of 2008

RECOMMENDED TEXT:
1. Branson, W.A.(1989) : Macroeconomic Theory and Policy, (3rd Edition), Harper and
Row, New York.
2. Shapiro, E. (1996) : Macroeconomic Analysis, Galgotia Publications, New Delhi.
3. N.GregoryMankiw : Macro Economics, Worth Publishers.

BOOKS FOR REFERENCE

1. Ackley, G. (1978) - Macroeconomics: Theory and Policy, Macmillan, New York
Blackhouse,
2. R.and A. Salansi (2000) - Macroeconomics and the Real World (2 Vols.) Oxford
University Press, London.
3. Dornbusch, R.andF. Stanley (1997) - Macroeconomics, McGraw Hill, Inc., New York.
4. GuptaS.B(1993) - Monetary Economics, S Chand Publications, New Delhi.
5. Hall, R.E. and J.B. Taylor (1986) -Macroeconomics, W.W.Norton, New York.
6. Heijdra, B.J. and V.P. Fredericck (2001) - Foundations of Modern Macroeconomics,
Oxford University Press, New Delhi.
7. Jha, R. (1991) - Contemporary Macroeconomic Theory and Policy, Wiley Easter Ltd.,
New Delhi.
8. Romer, D.L. (1996) - Advanced Macroeconomics, McGraw Hill Company Ltd.,New York.
9. Scarfe, B.L. (1977) - Cycles, Growth and Inflation, McGraw Hill, New York.
10. Surrey, M.J.C. (Ed.) (1976) - Macroeconomic Themes, Oxford University Press,
Oxford.

18
 CORE PAPER XIV- PUBLIC FINANCE -II

UNIT - I: PUBLIC POLICY

Demand revealing schemes for public goods – Contribution of Clarks, Groves and Leyard,
Tiebout model, theory of club goods, stabilization policy – Keynesian case for stabilization
policy: Uncertainty and expectations, Failure of inter – temporal markets.

UNIT - II: PUBLIC EXPENDITURE

Public Expenditure – Wagner's Law – Wiseman – Peacock Hypothesis – Structure and
Growth of Public Expenditure – Evaluation of Public expenditure – Cost Benefit Analysis –
Shadow Prices – Discount Rate – Reforms in Public Expenditure –Performance Budgeting –
Programme Budgeting - Zero Base Budgeting – Appraisal of Public Expenditure Policy in
India.

UNIT - III: FISCAL FEDERALISM

Fiscal federalism: Theories of Fiscal Federalism- Concepts of Deficits – Deficit Financing –
Budget Deficit – Issues of Equity and Efficiency – Designing Equalisation transfers –
Conditional and Unconditional grands.

UNIT - IV: INDIAN FISCAL FEDERALISM

Indian federalism- Tax assignments to Centre and States-–Particular Taxes – Personal
income Tax – Corporation Income Tax – Capital Gains Tax –Union Excise Duties -
MANVAT, MODVAT –VAT- GST –Service tax; Tax Evasion –State Taxes- Appraisal of
Tax Policies of India-Goods; tax reforms in India-Goods and services tax.

UNIT - V: FISCAL POLICY

Objectives – Fiscal and monetary policies – Fiscal policy for stabilization – Automatic Vs
Discretionary stabilization – Alternative measures of Resource mobilization and their impact
on growth, distribution and prices.

RECOMMENDED TEXT:
1. Bhargava (2004) : Public finance, Its Theory and working in
India, Chaitanya Publishing House.
2. Musgrave, R.A. (1959) : The Theory of Public Finance, McGraw
Hill, Kogakhusa, Tokyo
3. Musgrave, R.A. and P.B. Musgrave (1976): Public Finance in Theory and Practice,
McGraw Hill, Kogakusha, Tokyo.

BOOKS FOR REFERENCE

1. Atkinson, A.B. and J.E. Siglitz (1980) : Lectures on Public Economics, Tata
McGraw Hill, New York.
2. Auerbach, A.J. and M. Feldstern (Eds.) (1985) : Handbook of Public Economics,
Vol. I, North Holland, Amsterdam.
3. Buchanan, J.M. (1970): The Public Finances, Richard D. Irwin, Homewood.
4. Goode, R. (1986)Government Finance in Developing Countries, Tata McGraw Hill,
New Delhi.
5. Houghton, J.M. (1970) : The Public Finance : Selected Readings, Penguin,
Harmondsworth.
6. Jha, R. (1998) Modern Public Economics, Routledge, London.
7. Menutt, P. (1996) : The Economics of Public Choice, Edward Elgar, U.K.

19
 8. Shoup, C.S. (1970) : Public Finance, Aldine, Chicago.
9. Shome, P. (Ed.) (1995):Tax Policy : Handbook, Tax Division, Fiscal Affairs
Department, International Monetary Fund,Washington D.C.

CORE PAPER XV- INTERNATIONAL ECONOMICS –II

UNIT - I
Trade policy – Free trade vs Restricted trade policy –Barriers to trade – Tariff- Meaning and
types of Tariff – General Equilibrium analysis of tariff – Effects of Tariff – Theory of
optimum tariff –– Non-tariff barriers – Quotas – Dumping – Export taxes and subsidies –
Voluntary export restraints –– the state trading- International trade cartels – Theory of
Customs Union – trade creation and trade diversion – effects of customs union- Trade
problems and policies of developing countries. Foreign trade and National Income –trade
multiplier and export multiplier

UNIT - II
Balance of payments and trade – Structure of balance of payments –– Balance of payments
equilibrium -Balance of payments adjustments – exchange rate – Devaluation and balance of
payments –Elasticity approach – The J-curve effect – Absorption approach – Balance of
payment adjustments - domestic price , income , capital movements, monetary approach and
expenditure policies – balance of payment adjustments through controls

UNIT - III
Foreign exchange - functions – determination of equilibrium – sport and forward rates of
exchange – Theories of exchange rate determination – Mint parity theory-purchasing power
parity theory – balance of payment theory – Fixed exchange vs flexible exchange – Exchange
controls –current account and capital account convertibility

UNIT - IV
International capital movements – Foreign aid and development – Aid vs Trade effects of
International capital flows – Internal and external balance –The Mundell-Fleming model–
internal and external balance through monetary –fiscal policy mix – fixed exchange rate
system and flexible exchange rate system – balance of payments with inflation and
unemployment.
UNIT-V
International monetary system – Problems of international monetary system – Bretton wood
system and its breakdown - GATT- WTO - European currency markets – European monetary
system -Globalization and integration of global economy – Global financial crisis and global
Economy – International trade and Environment

RECOMMENDED TEXT:
1. International Economics – Bo sodersten
2. International economics paulkrugman
3. International Economics – K.C.Rana and K.C.Verma
4. International Economics theory and policy – D.N Dwivedi

BOOK REFERENCES
1. International trade theory and policy – Giancarlo Gandolfo
2. International Economics: Miltiades Chacholiades

20
 3. International Economics – K.C.Rana and K.C.Verma
4. International Economics Francis cherunilam

CORE PAPER XVI- DEVELOPMENT ECONOMICS – II

UNIT - I: SECTORAL CONTRIBUTION IN DEVELOPMENT

Agricultural sector’s contribution to development and policies for enhancing agriculture’s
role in development
Rural-Urban migration: Push and Pull factors.
Manufacturing sector and developmental.
Urban informal sector: Characteristics of the sector and consequences of its growth.

UNIT - II: HUMAN CAPITAL AND DEVELOPMENT

Population: Demographic transition, population – development interrelationship
The role of health in national and economic performance
Education and Economic growth: the return on education; and productivity
Economic rationals for government’s role in providing health care and education in poor
economics

UNIT - III: STRATEGIES FOR DEVELOPMENT

Balanced and Unbalanced growth
The role of market and state in development
Strengths and limitations of inward-oriented and outward trade policies
The “Washington Consensus” components and critical evaluation

UNIT - IV: GENDER EMPOWERMENT

The concept of gender empowerment UNDP’s Gender Empowerment Measure
The mutual interrelationship between gender empowerment and economic development
The concept of sustainable development (Brundland definition), policies for sustainable
development

UNIT - V: NON-ECONOMIC FACTORS IN DEVELOPMENT

Geography and development; the “internal resource curse” (DUTCH Disease)
Social capital and economic growth
Institution for development: Property rights, “inclusive” political institutions

RECOMMENDED TEXT
1. Adelman, I (1961) : Theories of Economic Growth and Development, Stanford
University Press, Stanford.
2. Thirillwall, A.P. (1978) : Growth and Development, 2ed. Macmillan
3. Michael P. Todaro and Stephen C. Smith (2003): Economic Development, Pearson
Education Pte. Ltd., Singapore.
BOOKS FOR REFERENCE:
1. Chakravarthy, S. (1982): Alternative Approaches to a theory of Economic Growth,
Oxford University Press.
2. Chakravarthy, S. (1989): Development Planning: The Indian Experience, Clarendon
Press.
3. Chatak, S. (1986) An Introduction to Development Economics, Allen and Unwin.
4. Kindleberger, C.P. (1977) : Economic Development 3ed McGraw Hill.

21
 5. Meler, G.M. (ed.) (1984) : Leading Issues in Economic Development 4ed. Oxford
University Press.
6. Mair, G.M., and D. Seers (Eds.) (1987): Pioneers in Development, Oxford
University Press.
7. Pathway to Economic Development by Amilaya Krishna Dutt (New Delhi, Oxford
University Press, 2014).

Elective Paper – IV: COMPUTER APPLICATION IN ECONOMIC ANALYSIS

UNIT - I
Introduction to Computers and Peripherals Basic components of computer - CPU, input-
output devices, keyboard, mouse and scanner, video display, printers and plotters, data
storage and retrieval, hard disk, floppy disk and CDROM; Type of computers and their
applications; Computer networking and resource sharing, hardware, software and
firmware.

UNIT - II
Data Processing, Techniques and Algorithms Concept of data, record and file; Types of data
and data structures, data analysis; File handling and operations like opening, appending and
cascading, closing and attribute control; Data storage and retrieval; Data operations;
Algorithms like sorting, merging, joining and bifurcation; Database concepts and
operation on database; DBMS and RDBMS.

UNIT - III
Statistical Processing Techniques and Methods Series, groups, tables, graphs and objects;
Time and frequency series, regression methods and techniques; Regression analysis;
Data Validation; Trends and cyclecity forecasting; System equation; Specification; Error
and correction strategies, Statistical modeling and descriptive statistics; Distribution
functions, Regression statistics.

UNIT - IV
Review of Multivariate models & Factor Analysis:a ) Estimation of Recursive and
simultaneous Equations models. Analysis of qualitative data: ANOVA, ANCOVA etc.
Multivariate statistical analysis: Multiple correlation and multiple regression; b) Cluster
analysis, discriminate analysis etc., Application of Excel, SPSS and LIMDEP for
statistical and econometric analysis. Database in Indian Economy: Census, CSO, NSSO,
CMIF etc.

UNIT - V
Applications to Finance & Commerce a) On line banking; ATM's Electronic stock
exchange; Electronic trading; Data sharing and decimation; Electronic transaction;
Document delivery; Authentication and validation transaction processing. b) Electronic
trading and marketing; On line shopping and malls, B2B, B2C, B2B and G2B models
and their applications; Document and transaction security and digital Signature;
Integrated transaction on mobile platforms.

RECOMMENDED TEXT
1. Sanders, D.H. (1988): Computers Today, McGraw Hill (3 rd Edition),New York.

22
2. Sinha, P.K. (1992) : Computer Fundamentals, BPB Publications, New Delhi.
3. Handbook of Statistic

BOOKS FOR REFERENCE

1. Rajasekaran, S. (1986) : Numerical Methods in Science and Engineering, A.H. Wheeler,
Allahabad.
2. Rajasekaran, S. (1986) : Numerical Methods in Science and Engineering, A.H. Wheeler,
Allahabad.
3. Sanders, D.H. (1988) : Computers Today, McGraw Hill (3 rd Edition), New York.
4. Sinha, P.K. (1992) : Computer Fundamentals, BPB Publications, New Delhi.

23