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ADAMAS UNIVERSITY

School of Economics and Commerce


Economics

Course Structure and Syllabi

UG & PG

Time Tables
PROPOSED COURSE STRUCTURE IN PROCESS

FOR

B.A. / B.Sc. (Hons.) in ECONOMICS

2017-20

1
SCHOOL OF ECONOMICS & COMMERCE
UNDERGRADUATE COURSE STRUCTURE
UNDER CHOICE BASED CREDIT SYSTEM

B.A. / B.Sc. (Hons.) in ECONOMICS

SEMESTER I

S CONTACT HOURS PER


L. TYPE OF COURSE WEEK
TITLE OF THE COURSE REMARKS
N COURSE CODE
o. L T P C

1 CC CEC31101 INTRODUCTORY MICROECONOMICS 5 1 0 6


2 CC BASIC MATHEMATICS 5 1 0 6
3 AECC ENGLISH LANGUAGE (MIL) 2 0 0 2
4 AEEC PRINCIPLES OF FINANCIAL ACCOUNTING 2 0 2 2
6 GE GENERIC ELECTIVE I 5 1 0 6

SUB TOTAL 22

SEMESTER II

S CONTACT HOURS PER


L. TYPE OF COURSE WEEK
N COURSE CODE TITLE OF THE COURSE REMARKS
o. L T P C

CC CEC31102 INTRODUCTORY MACROECONOMICS 5 1 0 6


CC BASIC STATISTICS 5 1 0 6
AECC ENVIRONMENTAL STUDIES 2 0 0 2
AEEC FUNDAMENTALS OF FINANCE 2 0 2 2
GE GENERIC ELECTIVE II 5 1 0 6
INT CEC31606 SUMMER SCHOOL /INTERNSHIP One Month Audit, 2

SUB TOTAL 24

SEMESTER III

2
S CONTACT HOURS PER
L. TYPE OF COURSE WEEK
N COURSE CODE TITLE OF THE COURSE REMARKS
o. L T P C

CC CEC32101 MICROECONOMICS 5 1 0 6
CC CEC32103 INDIAN ECONOMY SINCE INDEPENDENCE 5 1 0 6
CC CEC32105 MATHEMATICAL ECONOMICS 4 0 2 6
PRINCIPLES OF HUMAN RESOURCE
SEC MBA32121
MANAGEMENT 2 0 0 2
GE GENERIC ELECTIVE III 5 1 0 6
OE ELECTIVE School of E& T/Science 5 1 0 6 Optional
SUB TOTAL
26

SEMESTER IV
S
CONTACT HOURS PER
L. TYPE OF COURSE WEEK
N COURSE CODE TITLE OF THE COURSE REMARKS
o. L T P C

CC CEC32102 MACROECONOMICS 5 1 0 6
CC CEC32104 DEVELOPMENT ECONOMICS 5 1 0 6
CC CEC32106 STATISTICAL METHODS 4 0 2 6
SEC BUSINESS REGULATORY FRAMEWORK 2 1 0 2
GE GENERIC ELECTIVE IV 5 1 0 6
ELECTIVE School of Management/Law/Social
OE
Science 5 1 0 6 Optional
SUMMER INTERNSHIP One Month Audit, 2
SUB TOTAL
28

SEMESTER V
S CONTACT HOURS PER
L. TYPE OF COURSE WEEK
N COURSE CODE TITLE OF THE COURSE REMARKS
L T P C
O.

CC CEC33101 COMPARATIVE ECONOMIC DEVELOPMENT 5 1 0 6


CC CEC33103 BASIC ECONOMETRICS 4 0 2 6
DSE DISCIPLINE SPECIFIC ELECTIVE I 5 1 0 6
DSE DISCIPLINE SPECIFIC ELECTIVE II 5 1 0 6
SUB TOTAL
24
SEMESTER VI

3
S CONTACT HOURS PER
L. TYPE OF COURSE WEEK
N COURSE CODE TITLE OF THE COURSE REMARKS
o. L T P C

CC CEC33102 MONEY, BANKING & FINANCIAL MARKETS 5 1 0 6


OPEN ECONOMY MACRO AND ITS
CC
CEC33104 GOVERNANCE 5 1 0 6
DSE DISCIPLINE SPECIFIC ELECTIVE III 5 1 0 6
DSE DISCIPLINE SPECIFIC ELECTIVE IV 5 1 0 6
CEC33412 PROJECT 0 2 0 6 OPTIONAL
SUB TOTAL
24
TOTAL
148
(REQUIRED CREDIT)

Discipline Specific Electives (DSE):


Students are required to study FOUR elective Papers from the Major/ Hons discipline during semester V
and VI. The list of the electives are given below.

Choose any Two in Semester-V Choose any Two in Semester-VI


1. Public Finance CEC33105 5. International Trade CEC33106
2. Industrial Economics CEC33107 6. Labour Economics CEC33108
3. Economics of Health and Education CEC33109 7. Environmental Economics CEC33110
4. 8.

ABBREVIATIONS:

CC : Core Course
AECC: Ability Enhancement Compulsory Course
AEEC: Ability Enhancement ElectiveCourse
SEC : Skill Enhancement Course
GE : Generic Elective Course
DSE : Discipline Specific Elective Course
OE : Open Elective Course

List of Generic Electives:

1. Mathematics

2. Statistics

3. Political Science

4
4. Sociology

5. History

6. Psychology

List of Generic Electives offered from Department of Economics:

1. Introductory Microeconomics

2. Introductory Macroeconomics

3. Indian Economy since Independence

4. Development Economics

5
FIRST YEAR

Semester I

6
INTRODUCTORY MICROECONOMICS
[CEC31101: CC/Credit-6]
This paper will introduce students with subject matter of Microeconomics around economic
agents. Broadly the paper discusses the behaviour of the consumers at the demand side of the
economy, the decision making process by the producers at the supply side of the economy in
terms of theories of production and cost structures. How the consumers and producers in a
simple framework of competitive market interact with each other will be taught under Market.
The simple most market structure being the Perfectly Competitive Market will be elaborated in
details to lay the foundation of allied theories of different markets. The paper also explores how
institutional interventions influence the decision making process of economic agents in an
economic system. This course is designed to build strong foundation in undergraduate students
of Economics as a pre-requisite to allied papers to be taught in consecutive semesters. The
students will learn to apply their mind in assessing rational decision making processes of
different economic agents and their interaction at the end of the semester.

Unit 1: Basics of Demand and Supply

Conceptual framework of Microeconomics Positive and Normative Science of Decision


making Economic Agents Producers and Consumers Law of Supply and Demand
Determinants, Exceptions Types of commodities: Substitutes, Complementary goods -
Equilibrium determination Elasticity of Demand Point elasticity - Income Elasticity Cross
Price Elasticity Long and Short Run elasticities

Unit 2: Theory of Consumers Behaviour

Concept of Utility - Cardinal and ordinal utility - Consumer Preferences Preference ordering
Revealed preference approach;

Basic assumptions about preferences - Indifference Curve - Indifference Maps - Marginal Rate
of Substitution - Shape of Indifference curves - Perfect substitutes - perfect complements -
Budget Constraint - Budget Line - Effects of changes in income and prices - Consumer choice -
condition for optimal choice - Individual Demand - Income Effect and Substitution effect
Slutsky Equation - From individual to market demand Price consumption Curve Engel
Curve - Elasticity of Demand Consumer Surplus

Unit 3: Theory of Production

Production Decision of a firm - Production function - short run versus long run production -
Production with one variable input - TP, AP, MP - Law of diminishing marginal return -

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Production with two variable inputs - Input flexibility - Input substitution Isoquant curve -
MRTS - Returns to scale;
Unit 4: Cost of Production

Different types of costs - opportunity cost, sunk cost - fixed cost, variable cost - Costs in the SR
production, TC, AC, MC, Cost curves - Costs in the LR production, LR cost curves, relation
between SR and LR cost curves - Input choices, Iso-cost line, Change in technology and change
in input prices - Optimal choice of inputs, Expansion path - Economies of Scope, Economics of
Scale, Learning Curve;

Unit 5: Market under Perfect Competition

Perfectly competitive markets Assumptions - profit maximization Marginal Revenue,


Marginal Cost and Profit Maximization Choosing output in the Short run Short run profit
Short run supply Elasticity of Market Supply Producers Surplus; Choosing output in Long
run Long run profit maximization - Long run Competitive equilibrium Economic Rent -
Producers Surplus in Long run Industrys Long run Supply Curve Constant cost Industry
Increasing Cost Industry Decreasing cost industry The effects of a tax Long run elasticity
of supply;

Unit 6: Institutions and Competitive Markets

Gains and Loss from Govt. Policies Consumer and Producer surplus Market Efficiency
Price Ceiling and floor Price support system Production quotas Import Quota and Tariff
Taxes and subsidy: Impacts;

Text:
1. Microeconomics. R. S. Pindyck, D.L. Rubinfeld, and P.L. Mehta. Pearson, India,
7thedition, 2013

References:
2. Microeconomics: Theory and Applications. G.S. Maddala, and E. Miller. McGraw Hill
Education (India) Private Limited; 3rd edition, 2004.
3. Modern Microeconomics. Koutsoyiannis. Palgrave Macmillan; 2nd edition, 2008.
4. Principles of Microeconomics. D. Salvatore. Oxford University Press (5th or later
edition).
5. Microeconomic Theory. Ferguson, and Gould. All India Traveler Book Sellers (6th
edition).
Intermediate Microeconomics: A Modern Approach. H.R. Varian. East West Press; 8th edition
(2010).

8
BASIC MATHEMATICS
[CEC31103: CC/Credit-6]

Knowledge of mathematics is pre-requisite to understand the modern theoretical as well as


applied economics. This course is a review course to help students brush up their high school
mathematics and getting a foothold of basic mathematical tools needed for the beginners of
economics. This course will help them to understand the basics of linear algebra, different
functional forms, and graphical presentation. They will learn to solve linear equation system, and
its application in equilibrium determination. It will continue to strengthen the basic knowledge of
mathematics for Economics students. The objective is not to transmit any particular body of
economic theory, but to transmit the body of basic mathematics that enables the creation of
economic theory in general. The emphasis is on the understanding and developing the skill in the
application of mathematical theorems and techniques in economics.

Unit 1: Basic Algebra

Representation, Evaluation, Logic and proof techniques; Solving simple equations, Inequality
signs. Basics of Trigonometry.

Definition of a set, Different types of Set, Operations on sets; Concepts of range, domain and
mapping; Nested sets.

Number system, Real Line, The Plane, Cartesian product; Concept of Euclidean Space. Points
and lines in Euclidean space.

Unit 2: Graphs and Functions

Graphs- line, curves, slopes, tangent; Functions- Elementary types of functions: quadratic,
polynomial, power, exponential, logarithmic; Sequences and series: convergence, algebraic
properties and applications; Continuous functions: characterizations, properties with respect to
various operations and applications; Differentiable functions; Homogeneous functions;
Homothetic functions.
Graphs- Graphs of linear functions, non-linear functions, Geometric properties of functions:
convex functions, concave function.

Unit 3: Linear Equations

9
Simultaneous linear equation, solving simultaneous linear equations, Graphical solution,
Equating to same variable-Substitution, Row operations. Solving in case of more than two
unknowns.
Application: Static Equilibrium Analysis.

Unit 4: Matrix Algebra

Introduction to matrix, Matrix operation- addition, subtraction, matrix multiplication, transpose;


Determinants- Minors, cofactors, adjoint, inverse. Special kind of matrices- Diagonal,
nonsingular, symmetric. System of linear equations in matrix form, Cramers rule.

Unit 5: Differential Calculus

The differential calculus, Rules for differentiation, Differentiability and Continuity, Using first
derivative for graphs, Second derivative and convexity. Derivatives of different functional forms.
Partial differentiation, Second-order partial derivatives, Total differentials and total derivatives.

Applications: Marginal revenue and total revenue, Marginal cost and total cost, Point elasticity
of demand, Tax yield, The Keynesian multiplier.

Unit 5: Integral Calculus

Concept of integral calculus. Areas under curves; indefinite integrals; the definite integral.

Applications: Consumer Surplus, Producer Surplus, from marginal function to a total function,
Investment to capital formation.

Readings:

1. Simon, Carl. P., Blume, Lawrence. (2010). Mathematics for Economists, Norton.
2. Rosser, Mike (2003), Mathematics for Economists, Second Edition, Routledge.
3. Chiang, Alpha and Kevin Wainwright (2013), Fundamental Methods of Mathematical
Economics, Fourth Edition, McGraw-Hill
4. Sydseater, K., Hammod, P. (2002). Mathematics for Economics Analysis. Pearson Education
India.

10
PRINCIPLES OF ACCOUNTING
[########: AEEC/Credit-2]
COURSE DESCRIPTION
Economics as a discipline does not deal with any free commodity be it output or input. Every
output or input must command a price explicit or implicit, in order to be studied in the
discipline of Economics and as such Economics has usually a quantitative dimension with
regard to transactions inside and outside the markets. Wherever transactions take place, there
are two sides income (credit) and outgo (debit). Hence In the fields of business as well as
administration knowledge of accounting is imperative side by side with the knowledge of
economics like preparation of budget statement in public finance and preparation of balance
of payment statement in international trade. This is the first course in accounting. The course
begins with the definition of accounting, types of accounting, basic concepts of accounting
and covers basic accounting topics such as accounting cycle; accounts hierarchy (account
classes, account groups, accounts, subsidiary accounts), journal entries related to sales,
purchases, collections, payments, and expenses. Posting, accounting of depreciation,
accounting of current assets and current liabilities; trial balance, preparation of financial
statements, and closing/opening entries are also included in this course.

OBJECTIVES

1. Appreciate the relevance of accounting in economics

2. Acquiring basic knowledge of accounting such as to be able to comprehend issues in


daily life as well as academics that crop from interdisciplinary areas like banking and
finance.

CONTENTS

Unit 1: Theoretical Framework

Meaning and Scope of Accounting; Accounting Concepts; Accounting, Principles, Conventions and
Standards Concepts, Objectives, Benefits; Accounting Policies; Accounting as a Measurement
Discipline Valuation Principles, Accounting Estimates

11
Unit 2: Accounting Process

Documents & Books of Accounts: Invoice, Vouchers, Debit & Credit Notes, Day books, Journals,
Ledgers and Trial Balance Capital and Revenue: Expenditures and Receipts; Current Assets and
Current Liabilities, Contingent Assets and Contingent Liabilities Rectification of Errors

Unit 3: Depreciation Accounting

Methods, Computation and Accounting Treatment of Depreciation; Change in Depreciation Methods

Unit 4: Preparation of Final Accounts

Preparation of Profit & Loss Account, Balance Sheet, Cash Flow Statement, Projection of Cash Flow,
Dynamic Balancesheet

References
1. Fundamentals of Accounting and Auditing, The Institute of Company Secretaries India

2. Accounting for Non-accounting Students, John R Dyson, Pearson Education, 2010

12
FIRST YEAR

Semester II

13
INTRODUCTORY MACROECONOMICS
[CEC31102: CC/Credit-6]
The course is in continuation of Introductory macro economics offered in semester-II to
B.A(Hons) Economics students. After completion of the course students will be able to apply the
tools of aggregate demand and supply to analyze implications of different macroeconomic
policies as well as standard macroeconomic debates on inflation and unemployment.

Unit 1: Aggregate Demand and Aggregate supply Analysis

Derivation of the Aggregate Demand curve using IS-LM curve; Shifts of the AD curve;
Derivation of the AS schedule from the Labour market equilibrium; Analysis of the fiscal and
monetary policy using AD-AS schedule; Keynes vs Classics using AD-AS framework.

Unit 2: Expectation
Role of expectation; Adaptive Expectation; Rational Expectation; Lucas Critique and policy
ineffectiveness.

Unit 3: Inflation and Unemployment

The short-run trade -off between inflation and unemployment; Phillips Curve; Shifts in the
Phillips curve;; Natural Rate of unemployment ;The Phillips curve and the Aggregate supply
curve; The debate

Suggested Readings;

1. Macro Economics, R Dornbusch, S Fischer ; Mc Graw Hill Education(Sixth Edition);


2005
2. Principles of Macroeconomics. N. G. Mankiw. South-Western Cengage Learning (6th
edition),2012.
3. Macroeconomics. N. G. Mankiw. Macmillan; 6th edition (2008)
4. Olivier Blanchard, Macroeconomics, Pearson Education, Inc., 5th edition, 2009.
5. Steven M. Sheffrin, Rational Expectations, Cambridge University Press, 2nd

14
edition, 1996.

BASIC STATISTICS
[CEC31104: CC/Credit-6]
The main objective of this course is to train the students to use the techniques of statistical
analysis, which are commonly applied to understand and analyze economic problems. The paper
deals with simple tools and techniques, which will help a student in data collection, presentation,
and to understand the basic descriptive properties of the data. This paper introduces the concept
of bivariate data and their application in real life. A major emphasis is given on the fundamental
knowledge of probability where the true essence of statistics lies.

Unit 1: Introduction to Statistics

Basic concepts: Population, Sample, Parameter; Techniques of data collection- Sampling vs.
Population, primary and secondary data. Classification and presentation of data. Graphic and
diagrammatic representation of data. Frequency distribution and its diagrammatic representation.

Unit 2: Measures of Central Tendency

Arithmetic Mean, Median and Mode for grouped and ungrouped data, Comparison of Mean,
Median and Mode, Geometric and Harmonic Mean, Composite Mean.

Application: Index Numbers: Index number as weighted averages, Price and quantity index
numbers, Cost of Living Index Number, Wholesale Price Index, Stock market indices.

Unit 3: Measures of Dispersion

Range, Mean Deviation, Quartile Deviation and Standard Deviation, Measures of Relative
Dispersion, Curve of Concentration

Application: Measurement of Economic Inequality: Gini Coefficient and Lorenz Curve.

Unit 4: Moments, Skewness, Kurtosis

Central and non-central moments, different measures of skewness and kurtosis.

Unit 5: Bivariate Data

15
Definition of bivariate data, scatter diagram, bivariate frequency distribution-Simple and
multiple correlation and regression. Covariance as a measure of association; Coefficient of
Correlation; Rank correlation; Difference between correlation and regression approach.

Unit 6: Probability Theory

Elements of Probability Theory: Sample Space, Probability Space, Events, Classical Definition
of Probability. The Addition Rule, the Multiplication Rule, Theorems of Total Probability,
Conditional Probability and Statistical Independence. Limitations of the Classical definition,
Frequency definition, Axiomatic Approach, Bayes Rule.

Readings:

1. Lind, Marchal, Wathen. Basic Statistics for Business and Economics, McGraw Hill Education;
Seventh edition (2013).

2. Goon, Gupta, Dasgupta Fundamentals of Statistics, Vol I, World Press Private limited
(2016).

3. Gupta, S. C., Kapoor, V. K. Fundamentals of Mathematical Statistics. Sultan Chand & Sons
(2014).

16
FUNDAMENTALS OF FINANCE
[########: AEEC/Credit-2]
This course starts with the concept of time value of money, continues with the risk literature and ends at
financing decisions by a firm. As a store of value money transmits the value to the assets and that value
accretes through trading and revenue earning. Depending on the nature and issuer of the asset the speed
and quantum of accretion varies. This is the risk element an asset is fraught with. The concepts of risk and
return in finance go hand in hand because higher risk means discounting with a higher rate of return.
Finance literature revolves around the concept of time value of money that is based on present value or
compound value of an asset or liability on case to case basis. Consumption and investment are the two
most important components of national income. Finance comes to the picture when a consumer buys a
product on credit, not on cash, that attracts interest and other charges which has future implications unlike
cash purchase where the transactions end then and there. The credit purchase is financed by a third party
who could be different than the producer of the goods purchased. All investments have underlying
financial principles because investments aim at future earnings.

Objectives

To learn

1. how Finance literature evolves as separate branch of Economic literature,


2. the basics such as to prepare for competitive examination, and
3. how financing decisions are taken in workplaces

Unit 1: Time Value of Money

Definition and Functions of Money


Money as a store of value
Concept of financial security and their classification in terms of liquidity
Creation of Asset Out of Money - Issue of Securities - Securitization
Concepts of Present Value and Compound Value of an asset
Valuing Securities - Bonds and Common Stocks
Net Present Value and Other Investment Criteria for making Investment Decisions
Concepts of Projects and Project Finance

Unit 2: The Risk Literature

Concepts of Risk and Return


Concept of Investment Portfolio
Capital Asset Pricing Model
Concept of Project Risk

17
Unit 3: Options

Concepts of Financial Securities


Concepts of Options
Concept of Real Options

Unit 4: Financing Decisions

Concept of Efficient Market


Behavioural Finance
Concept of Corporate Finance

Reference: Principles of Corporate Finance, R A Brealey, S. C. Meyers, Franklin Allen, McGraw-Hill


Irwin, New York, 10th Edition.

18
SUMMER SCHOOL / INTERNSHIP
[CEC31606: CC/Credit-6]
Summer internship will be of one month duration, during the summer vacation after the end
semester exams of Semester IV. The students will be given a list of internship opportunities with
NGOs, civil society organisations, think tanks, governmental agencies and private companies. At
the successful completion of summer internship, students have to submit a detailed internship
report. Students will receive certificates both from the organisation and the University.

19
SECOND YEAR

Semester III

20
MICROECONOMICS
[CEC31102: CC/Credit-6]
Course Objective: This paper will introduce students with more complicated issues of
Microeconomics around different market structures under imperfect competition like monopoly
and monopolistic competition. Different types of pricing strategies and market power adopted by
of the producers. This paper also gives brief idea about other imperfectly competitive markets
under oligopoly. The theoretical concepts of theories of distribution will be covered. In addition
the conflicts of efficiency versus equity along with general idea of welfare are also discussed.
Finally the students will be introduced to major problems associated with market failure.

Unit 1: Market under imperfect competition: Monopoly and Monopsony

Monopoly: Average and Marginal Revenue Output decisions rule of thumb pricing shifts in
demand effect of tax; Monopoly power: measures, sources; Social cost of monopoly power:
rent seeking behaviour, price regulation; Natural Monopoly; Monopsony: sources of monopsony
power, comparison with monopoly; Bilateral monopoly;

Unit 2: Pricing under Market Power

Pricing with Market Power: First, Second and Third degree Price discrimination; Intertemporal
Price discrimination Peak Load Pricing Two part Tariff Bundling;

Unit 3: Market under imperfect competition: Monopolistic Competition

Monopolistic Competition: Equilibrium in Short and Long run - Economic Efficiency;

Unit 4: Market under imperfect competition: Oligopoly

Oligopoly: Equilibrium The Cournot Model - Stackelberg Model - Pricing under homogenous
products: Bertrand Model - Pricing under differentiated products;

The Payoff Matrix of a Game - Nash Equilibrium - Competition versus Collusion: Prisoners
Dilemma price Rigidity and Kinked Demand Curve Model - Price Leadership Cartels, Cartel
pricing;

Unit 5: Microeconomic theory of Distribution

Product Exhaustion theorem; Land Theory of Economic Rent (genesis in a rent, rent in a
market economy); Theory of Profit - Theory interest wage rate backward bending labour
supply curve;

21
Unit 6: Market Failure

General Equilibrium: Edgeworth Box Diagram - Efficiency and Equity;

Markets with asymmetry of information Uncertainty and Market Failure Market Signalling
Moral Hazard Principal-Agent Problem Efficiency wage theory;

Externalities: Positive and Negative Externality and property rights - Public goods Public
Goods and Market failure; private return and public return, private and public cost examples in
public expenditure in education;

Text:

1. Microeconomics. R. S. Pindyck, D.L. Rubinfeld, and P.L. Mehta. Pearson, India,


7thedition, 2013

References:

2. Microeconomics: Theory and Applications. G.S. Maddala, and E. Miller. McGraw Hill
Education (India) Private Limited; 3rd edition, 2004.
3. Modern Microeconomics. Koutsoyiannis. Palgrave Macmillan; 2nd edition, 2008.
4. Principles of Microeconomics. D. Salvatore. Oxford University Press (5th or later
edition).
5. Microeconomic Theory. Ferguson, and Gould. All India Traveler Book Sellers (6th
edition).
6. Intermediate Microeconomics: A Modern Approach. H.R. Varian. East West Press; 8th
edition (2010).

22
INDIAN ECONOMY
[CEC32103: CC/Credit-6]
This course will be relevant to the students in terms of the overall Indian economic experience
since independence. The basic trajectory of Indian economic (capitalist) development is to be
covered with special emphasis on the shift from a mixed economy towards market orientation.
Four economic spheres - production, distribution, trade and finance are to be followed to bring
out the major changes in the Indian economy.

Unit-1: Indian Economy at the time of Independence


Features of Indian Economy around 1947-1950 and characteristics of economic
underdevelopment of India (with reference to colonial rule of India)

Unit-2: Planning: Evolution of Indias Development Goal and Strategy

The background and Structure of Indian Planning, Structural Constraints and Indias
development strategy Choice of industrialization strategies public vs. private sector, capital
goods versus consumer goods Mahalanobis Plan Model (basic argument), import substitution
vs. export promotion strategy; Agriculture-industry relationship demand side and supply side
linkages agriculture-industry terms of trade - food crisis of the 1960s and imperatives for
agricultural growth, genesis of green revolution fourth plan (basic argument); Poverty
Eradication, foreign aid and self-reliance Fifth Five Year Plan Model (basic argument);
Regional inequality in India causes; policies for balanced regional development; Planning
deficiencies and its abandonment 7th five year plan and Indian economic crisis

Unit-3: New Reform Policy

Context, liberalisation, market and state (introduction), privatisation, disinvestment policy,


consequences, impact on growth and employment

Unit-4: Production and distribution


Agriculture- Characteristics, Land Reforms, Evaluation, Green Revolution, Agricultural policies
and pricing, rural credit and institutionalisation; Industry- Structure and composition of Industry
issues of concentration, large vs small industry industrial location, small scale reservation
policy, trends and patterns of industrial growth, industrial Policies industrial licensing system,
Growth of the Service Sector, Inclusive development;; Food security, Food Procurement and
Public Distribution System
23
Unit-5: Trade and finance
Foreign trade regime, protection and foreign competition, Productivity; import substitution
versus export Competitiveness, effect on export competitiveness, foreign policy in the post-
liberalisation period; Finance- Nationalisation, fixed vs. Flexible exchange rate system,
Privatisation, foreign capital, land acquisition, SEZ

Unit- 6: Employment, Wages and Inflation


The trends and pattern of employment and wages in India informalisation and tertiarisation of
employment - problems of unemployment and under-employment, Government policies on
employment and wages and employment employment guarantee scheme minimum wage,
Movement of prices in India trends and patterns causes, consequences and policies adopted

Readings on India:
1. Contemporary Issues of Indian Economy. DhirendraNathKonar. Akansha Publishing
House; 1st edition (2009)

2. Indian Economy: Performance and Policies. Uma Kapila. Academic Foundation; 15th
Revised edition (2015)

3. The Indian Economy: Problems and Prospects. Bimal Jalan (ed.); Penguin

4. Indian Economy. A.C. Fernando. Pearson

5. S Chakraborty. 1987. Development Planning: The Indian Experience. Clarendon


Press.

6. Vaidyanathan A.1994. Performance of Indian Agriculture since Independence in


Kaushik Basu (ed.) Agrarian Question, Oxford University Press.

7. C D. Wadhwa. Some problems of Indias Economic Policy, Tata McGraw Hill.


8. J. Sachs, A Varshney and N Bajpai (ed). India in the Era of Economic Reforms.
Oxford University Press.
9. I, Judge Ahluwalia. 1985. Industrial Growth in India since the Mid-sixties. Oxford
University Press.
10. PC Joshi. 1975. Land Reforms in India: Trends and Perspectives. Allied Publishers:
New Delhi.
11. Pramit Chaudhuri. 1979. Indian Economy: Poverty and Development.George Allen
and Unwin, London.

24
MATHEMATICAL ECONOMICS
[CEC32105: CC/Credit-6]
This course intends to equip the students with mathematical analysis of the economic problem
they are learning in fundamental courses like microeconomics and macroeconomics. The basic
mathematics course in first year has laid down the ground for this course where a higher level of
mathematics will be taught and students will learn to apply it with real life data. This course is a
mapping of mathematical tools into economic theories, where the students will be dealing with
more complex theorems and their formulation and interpretation. The concept of optimization, in
unconstrained and constrained set up, is the core of the course. Moreover, different economic
models in discrete and continuous time frame will be taught where the concept of difference
equation and differential equation has been applied.

Unit 1: Unconstrained Optimization

Concept of optimization. First-order conditions, Second-order conditions, Global maxima and


minima.

Applications- Profit maximization, Inventory control, Comparative static effects of taxes.

Unit 2: Constrained Optimization I

Constrained optimization and resource allocation, Equality Constraints, Inequality Constraints.

The Lagrangean technique for optimization: constrained optimization with two variables, first
order condition, second-order conditions; Constrained optimization with more than two
variables.

Application: Consumers utility maximization, Firms cost minimization.

Unit 3: Constrained Optimization II

Kuhn-Tucker Formulation- Non-negativity restrictions, Inequality constraints, Interpretation;


Maximum Value Function, Envelope Theorem- for unconstrained optimization, for constrained
optimization. Interpretation of Lagrange Multiplier.

Unit 4: First Order Difference Equation: Discrete Time

Discrete time, Differences, and Difference Equation; Solving a first order difference equation;.
Application: The Cobweb Model, Dynamic stability of equilibrium.

25
Unit 5: First Order Differential Equation: Continuous Time

Continuous time, Differential Equations. First order differential equation- with constant
coefficient, with variable coefficient. Solving linear differential equation. Application: Market
Model, Time path, Dynamic stability of equilibrium.

Readings:

1. Simon, Carl. P., Blume, Lawrence. (2010). Mathematics for Economists, Norton.

2. Rosser, Mike (2003), Mathematics for Economists, Second Edition, Routledge.

3. Chiang, Alpha and Kevin Wainwright (2013), Fundamental Methods of Mathematical


Economics, Fourth Edition, McGraw-Hill

4. Sydseater, K., Hammod, P. (2002). Mathematics for Economics Analysis. Pearson Education
India.

26
SECOND YEAR

Semester IV

27
MACROECONOMICS
[CEC32102: CC/Credit-6]
This course is in continuation of Introductory Macroeconomics . Students are already aware of
the aggregate consumption function and investment function. In this course they will be
introduced with the micro foundation of these macro aggregates. A brief introduction with open
economy will also be used along with the long run dimension of economic growth.

Unit 1: Micro foundations of Macroeconomic aggregates


Consumption; Keynesian consumption function, inter-temporal choice, life cycle and permanent
income hypothesis.
Investmentbusiness fixed investment, neo-classical approach, Tobin's q, Residential
investment and accelerator model of inventories; Dixits model of investment theory;

Unit 2: Theory of Demand for Money


Demand for money; Tobins portfolio balance approach; Baumols model of demand for
money;

Unit 3: Open Economy Macroeconomics

IS-LM framework in open Economy; Capital mobility, role of expectation; covered-uncovered


interest rate parity;Fiscal and Monetary policy under short-run open economy; The Mundel-
Flemming Model;Balance of payment; exchange rate determination; different types of exchange
rate ;
Unit 4: Long-run analysis: Economic growth
Cross-country evidence of economic growth; Production function and economic growth; Harrod-
Domar model of economic growth; Solow model of economic growth

1. Macro Economics, R Dornbusch, S Fischer ; Mc Graw Hill Education(Sixth Edition);


2005
2. Principles of Macroeconomics. N. G. Mankiw. South-Western Cengage Learning (6th
edition),2012.
3. Macroeconomics. N. G. Mankiw. Macmillan; 6th edition (2008)
4. Olivier Blanchard, Macroeconomics, Pearson Education, Inc., 5th edition, 2009.

28
5. Charles I Jones, Introduction to economic growth , second edition, Viva-Norton Student
Edition

DEVELOPMENT ECONOMICS
[CEC31104: CC/Credit-6]
This course aims at a basic introduction to the ideas of growth and development. A chronological
development of the measures of development and the major theoretical works is to be attempted
to make it clear to the students that development is a multidimensional process and need to be
addressed accordingly. Finally, the recent advances in the direction of free trade as a vehicle of
development are to be discussed.

Unit-1: Concepts and measures of development

Nature, Questions and Values of Development, Meanings of development economic growth,


redistribution form growth and capabilities approach to development, objectives of development;
measures of development- purchasing power parity and per capita income as an index of
development, difference between growth and development, human development index,
characteristics of a developing economy

Unit-2- Growth theories

Classical growth theory, Theories of transition Clark and Fisher on change in sectoral share,
Rostows stages of growth; Kuznetss characteristics of Growth; Industrialisation, Growth and
Kaldors growth laws; production-function approach - Harrod-Domar growth model, Neo-
classical growth theory, endogenous growth theories

Unit 3- Development theories

Underdevelopment as a coordination failure, multiple equilibria, different approaches- vicious


cycle of poverty, circular causation, the Big Push, balanced and unbalanced growth; Dual
economy Models- Lewis, Harris-Todaro, Trap models- Nelson and Leibenstein, Choice of
technique in a labour suplus economy, Two gap model, Dualism

Unit-4: International- dependence Revolution

The Neocolonial Dependence Model, the False paradigm model, the dualistic-development
thesis, the Marxian legacy

Unit-5: Development- Population, Inequality and Poverty

29
Concepts of Population: definitions of fertility, mortality, birth rates, death rates, fertility rate,
life expectancy, infant mortality rate, youth dependency ratio; Theory of demographic transition.

Meaning of inequality, Measures of Inequality - Lorenz Curve, Range, Coefficient of variation,


Gini-coefficient, Kuznets Inverted U hypothesis.

Poverty, relative and absolute deprivation with respect to income, Poverty line, Poverty measures
Head count ratio, Poverty gap ratio, Income gap ratio, Human Poverty Index.

Readings:

1. Growth and Development. A.P. Thirlwall. Palgrave McMillan; 8th edition (2010)

2. Development Economics. Debraj Ray . Oxford University Press; 1st edition (1999)

3. Economic Development. M.P. Todaro, and S.C. Smith. Pearson India; 10th edition
(2011)

4. Recent Economic Growth in India: Contemporary Issues. S. Gupta, and A. K. Mohapatra.


Prateeksha Publications (2011)

5. Leading Issues in Economic Development. G.M. Meier and J.E. Rauch.. Oxford
University Press (2005)

6. India: Leading Issues in Economic Development. R. K. Mishra. Academic Foundation;


2nd edition (2014)

7. K. Basu. Analytical Development Economics: The Less Developed Economy Revisited.


Oxford University Press

30
STATISTICAL METHODS
[CEC32106: CC/Credit-6]

This course aims to build up the advanced knowledge on the basic statistics taught in the first
year. Here students will learn more tools and techniques which are useful for analyzing
economic issues in real life. Concept of random variable and their probability distribution are the
main focus of the paper. Students will learn the concept of statistical independence and joint
probability distribution in case of bivariate data. The difference between population and sample,
why sampling is required for any study, has to be understood clearly before one delves into
statistical analysis. In this paper students will get an idea of sampling theory and techniques and
also learn sampling distribution and its different forms.

Unit 1: Random Variables and Probability Distributions

Definition of random variable: discrete and continuous random variable, probability mass
function and probability density functions, Expectation and Variance of random variables,
Univariate Probability Distributions: Binomial, Poisson, Normal and Standard Normal
Distribution. Skewness and Kurtosis. Moment Generating Functions.

Unit 2: Bivariate Data and Joint Probability Distribution

Concept of Bivariate data; Joint Probability Distribution: Statistical Independence, Marginal and
Conditional Distribution. Descriptive statistics of the distribution.

Unit 3: Sampling Theory

Population and Sample, Parameter and Statistic, Random Sampling: Methods of Drawing
Random samples (with and without replacement), Circular systematic sampling. Basic Concepts
of different methods of sampling Stratified Sampling, clustered sampling, multistage sampling,
purposive sampling

Unit 4: Sampling Distribution and their uses

31
Sampling Distribution, Standard Error, Sampling Distributions associated with Normal
Population, Law of Large number. Derived Distributions: Chi-Square Distribution, Students t
Distribution, F Distribution, Fishers t distribution, concept of degrees of freedom.

Elementary ideas of point estimation- population mean-sample mean, small sample test and t-
distribution, Chi-Square Distribution and non-parametric test.

Readings:

1. Jay L. Devore, Probability and Statistics; Seventh Edition; Cengage Learning, 2010.

2. Goon, Gupta, Dasgupta Fundamentals of Statistics, Vol I, World Press Private limited
(2016).

3. Gupta, S. C., Kapoor, V. K. Fundamentals of Mathematical Statistics. Sultan Chand & Sons
(2014).

32
THIRD YEAR

Semester V

33
COMPARATIVE DEVELOPMENT EXPERIENCE
[CEC33101: CC/Credit-6]

Capitalism, when compared with the other previous modes of production in the history of
mankind, is a comparatively recent phenomenon (originality in Western Europe since the 14th
century). It is marked by a continuous urge towards greater marketable production and profit
motive, backed by technological advancements and specialized division of labour. In this paper,
we trace the development of capitalism in the West and the challenges that emerged in the post
World War II scenario, especially in relation to the third world economies (the developing
countries), both theoretically and practically. The shifts in the capitalist discourse in the recent
neo-liberal regime are finally attempted here for a better understanding of globalization.

Unit 1: Genesis of capitalism

Enlightenment, modernity, capitalist development and poverty eradication, different types of


social organization, feudalism, precapitalist societies other than feudalism, capitalism in the
West, Industrial revolution in Great Britain - Causes Why Great Britain became the pioneer,

Mercantilism, physiocrats, Adam Smith and the labour theory of value, colonialism, imperialism

Unit 2: Industrialization Experiences in Early Part of 20th Century

Capitalism vs socialism, The Great Debate in Soviet Union on the assignment of priority on
development of heavy industry in the process of planned economic development;

The Great Depression of the 1930s and recovery Experiences of USA and Great Britain.

Unit 3: Post Second World War Development Scenario


The World Bank approach - Global Change, Welfare state and mixed economy, Post War global
institutions: International Monetary Fund, World Bank, United Nations Conference on Trade and
Development, Development as a programme, Trade- Infant industry argument, Import
substitution versus export promotion in less developed countries. Illustrations from South Asia,
Latin America and East Asia. FDI, MNCs, portfolio investment.

34
Unit 4: Development and underdevelopment as historical processes

Transition to capitalism as underdevelopment: Center-periphery, unequal exchange, Dependency


Approach., regulation theory on a world scale; world system theory. Transition beyond
capitalism- post-developmentalism

Unit 5: Evolution of New international economic order.

Neo liberalism, Washington consensus, North-South Divide, Recasting of IMF and World Bank,
General Agreements on Tariff and Trade (GATT) and the Dunkel Draft controversy-World
Trade Organization (WTO), Economic Integration

Readings:

1. A.P. Thirlwall. Growth and Development. Palgrave McMillan. (8th edition)


2. M.P. Todaro and S.C. Smith. Economic Development. Pearson Education.
3. G.M. Meier and J.E. Rauch. Leading Issues in Economic Development. Oxford
University Press. (8th edition or latest).
4. Sunanda Sen. 2007. Globalisation and Development, National Book Trust, India
5. C. Roe Goddard, Patrick Cronin and Kishore C. Dash. (ed). International Political
Economy. Viva Books Private Limited. (articles by Theotonio dos Santos and Samir
Amin.
6. Maurice Dobb. Soviet Economic Development since 1917. Chap. 8.
7. A.K. Bagchi. The Political Economy of Underdevelopment. Orient Longman.
8. J. Stiglitz. Globalisation and its Discontents. Penguin.
9. Soumyen Sikdar. Contemporary Issues in Globalisation. An Introduction to Theory
and Policy in India. Oxford University Press.
10. Schumpeter (1954): History of Economic Analysis, Harvard University Press
11. Screpanti & Zamagni (2005): An Outline of the History of Economic Thought, OUP
12. Snowdon and Vane (2005): Modern Macroeconomics, Edward Elgar Publishing
Limited
13. Resnick, S. and R. Wolff. 2012. Contending Economic Theories. MIT Press.

35
BASIC ECONOMETRICS
[CEC33103: CC/Credit-6]
Econometrics is concerned with the application of statistical theory to the analysis of economic
data and the estimation of economic relationships. This course intends to expose students to the
statistical techniques that economists use for estimating, testing, and forecasting economic
relationships. In this paper students will be introduced with what Econometrics is about. The
basic concept of linear regression model under classical assumptions, statistical inference tools
and techniques in a regressed model will be taught in a lucid approach. Moreover, the
consequences of violations of classical assumptions will also be taught. This course covers a
range of applications through statistical software.

Unit 1: Introduction to Econometrics

What is Econometrics? Steps in Econometric Analysis; Specification of Econometric Model and


Assumptions; Basic Concepts of Estimation and Desirable Properties of Estimators; Data for
Econometric Analysis.

Unit 2: Classical Statistical Inference

Basic concepts of estimation: Desirable properties of estimators, Methods of Point Estimation -


Maximum Likelihood Estimators and their properties.

Testing of Hypothesis: Confidence Intervals, p-values, Type-I and Type-II Errors, Simple
applications of tests for the Mean and Variance of a Univariate Normal Population.

Unit 3: Classical Linear Regression Model

Stochastic and non-stochastic relationships; The concept of regression, Two Variable Case,
Specification of the relationship; Estimation- Method of Least Squares, Assumptions; Gauss-
Markov Theorem; Properties of Least Squares estimates; BLUE.

Unit 4: Statistical Inference in Classical Linear Regression Model

Statistical Inference in simple linear regression model- Confidence Intervals for parameters,
Testing of Hypothesis- Testing of regression coefficient; Test for regression as a whole,
Coefficient of determination, Goodness of Fit, F-test, Analysis of Variance.

Unit 5: Violations of Classical Assumptions and Remedies

36
Problems of Heteroscedasticity; Auto correlation (first order) their consequences, tests and
remedies.

Unit 6: Application of Econometric Methods

Estimation of demand and supply functions, production and cost functions and consumption
function and investment function.

Readings:

1. Damodar N. Gujarati, Dawn C. Porter, and SangeethaGunasekar. Basic Econometrics.


McGraw Hill Education (India) Private Limited; 5th edition (2011)

2. Jeffrey M. Wooldridge. Introductory Econometrics: A Modern Approach Cengage


Learning India Pvt. Ltd.; 5th edition (2014)

3. G. S. Maddala, KajalLahiri. Introduction to Econometrics. Wiley India Pvt Ltd; 4th


edition (2012)

37
PUBLIC FINANCE
[CEC33105: DSE/Credit: 6]

Course Objective: Public finance is the study of government policy from the points of view of
economic efficiency and equity. Inherently, this study involves a formal analysis of government
taxation and expenditures. The subject encompasses a host of topics including public goods,
market failures and externalities. The paper deals with the nature of government intervention and
its implications for allocation, distribution and stabilization. The paper is dealing with the theory
of public economics on one hand and the other with the public finances.

Detailed Syllabus:

Unit 1: Introduction to public finance

Functions of Government - Economic functions -allocation, distribution and stabilization;


Regulatory functions of the Government and its economic significance;

Government budget and its structure Receipts and expenditure; Concepts of current and capital
account, balanced, surplus, and deficit budgets;

Federal Finance: Different layers of the government; Inter governmental transferhorizontal vs.
vertical equity;

Unit 2: Public Revenue and Tax structure

Concept of tax, Optimal taxation; types of tax direct tax and indirect tax;

Canons of Taxation; Principles of taxation -Ability to Pay principle; Benefit Approach of


Taxation;

Indirect tax principles of commodity taxation; Demand elasticity and supply elasticity;
Efficiency in tax collection; VAT, GST, Subsidy and Transfer Policy;

Non-tax revenue resources - Earnings from public undertakings Earnings from business of the
Govt. public services;

Unit 3: Public Expenditure and Public goods

Concept of public goodscharacteristics of public goods; national vs. local public goods;
determination of provision of public good;

Externality, concept of social versus private costs and benefits; merit goods, club goods;
Provision versus production of public goods;

38
Market failure and public provision;

Unit 4: Deficit or surplus: Public debt

Concept of budget deficit vs. fiscal deficit; Functional classification of budget; Concept of
Revenue Deficit; Instruments for stabilization; Public Debt - internal and external burden of
public debt; Elementary aspects of Public finance in an open economy;

Texts:
1. Musgrave and Musgrave: Public Finance in Theory and Practice (Fifth Edition).
2. Dorbusch, R.: Open Economy Macroeconomics.
3. Gruber J. (2011): Public Finance and Public. Worth publishers

4. Amaresh Bagchi (ed.). Readings in Public Finance. Oxford University Press.


5. Misra and Puri. Indian Economy.

39
INDUSTRIAL ECONOMICS
[CEC33107: DSE/Credit-6]
This course along with labour economics and industrial organizations will provide a thorough
understanding to the students regarding major developments in Industrial economics and its
allied issues. This course is a basic introduction to the Industrial Economics in terms how
structures of a industrial set up affects its functioning. Along with that the application of research
and development and the importance of location will be analyzed.

Unit I: Industrial Structure

Industrial structure and market structure; Industrial Concentration; Structure-Conduct-


Performance (S-C-P) model

Unit 2: Expansion of firms

Mergers, acquisition and diversification; Foreign capital; MNCs and Transfer pricing; Indian
experience

Unit 3: Research and Development in the process of Industrialization

Research and Development and international patent laws; Product and process patent; Diffusion
of technology;

Unit 4: Location of the Industrial development and Industrial Policy

Location of the particular plant; Regional Development; Industrial policy

Suggested Readings:

1. R.R.Birthwal, Industrial Economics, 2nd Edition

2. F.M. Scherer: Industrial Market Structure and Economic Performance. 2 edition edition.

40
ECONOMICS OF HEALTH AND EDUCATION
[CEC33109: DSE/ Credit 6]

The importance of education and health in improving well-being is reflected in their inclusion
among the Millennium Development Goals adopted by the United Nations member states, which
include among other goals, achieving universal primary education, reducing child mortality,
improving maternal health and combating diseases. This course provides a microeconomic
framework to analyse, among other things, individual choice in the demand for health and
education, government intervention and aspects of inequity and discrimination in both sectors. It
also gives an overview of health and education in India.

Unit 1: A theoretical understanding

Health Economics: A new subject? - Health and health care; Market for health care and its
uniqueness: Introducing externality and uncertainty; Demand for health care: Can usual
neoclassical framework do?

Unit 2: Measurement of health

Morbidity & Mortality; Disability Adjusted Life Years; Epidemiological Transition Theory

Unit 3: Providers

Doctors and fee structure; Pharmaceutical Industry; Insurance Market

Unit 4: Issues related to health care policy

Health care reform and its experience; Health care finance; Public private partnerships;
Sanitation policy;

Unit 5: Economics of Education

Public expenditure in Education; Productivity, citizenship, Credit Market Failure, Failure to


maximize family utility; Redistribution; Govt. involvement in education: Free public education
and crowding out and solutions;

Unit 6: Market for Education

41
Direct expenditure on education; measuring returns on education on productivity; Market failure
and govt. expenditure on higher education;

References:

1. Gruber J. (2011): Public Finance and Public. Worth publishers

2. World Health Organisation (2000), Report of Commission on Macroeconomics and


Health;
3. World Health Organization (2010), Socioeconomic Determinants of Health;
4. Cuyler A and J Newhouse (ed) (2000), Handbook of Health Economics. Elsevier.
5. Chattopadhyay Saumen (2012) Education and Economics: Disciplinary Evolution and
Policy Discourse. OUP;

42
THIRD YEAR

Semester VI

43
MONEY BANKING AND FINANCIAL MARKETS
[CEC33102: CC/ Credit 6]
This course demonstrates the role of banks in creation and circulation of money in the forms of assets in
the real sector as well as financial sector. The banks create money in the lending process through the
multiplier method. This money crystallizes in the forms of fixed capital and consumer durables, which
remain hypothecated with the banks during the life of the loan. This loan in turn contributes to the
aggregate demand in the form of investment products and thus augments the economy's output. This
output generates income in the hand of households, corporates and the governrnent, a part of which is
saved and channelized to the financial sector towards acquisition of financial securities. This course starts
with introduction to the functions of the banks with special reference to lending, continues with the
description of the financial markets and their work profiles and ends with relevant regulations on Banks
and Financial Markets that affect determination of interest and income.

Objectives:

To learn

(i) the financial aspect of monetary economics,


(ii) operation of banks and financial instructions, such that the knowledge helps when the
learners gets employed there or starts self employment like brokerage or rendering financial
advisory services.
(iii) the foundation of banking and finance to pursue higher studies in this area,

Unit 1: Introduction to Banking

Concept of Financial Intermediaries


Definition and Functions of Bank
Structure of the Banking Industry
Role of Banks in Creation of Money: The Lending Process
The Money Multiplier Process
Regulations on Lending

Unit 2: Introduction to Financial Markets

Concept of Financial Market


Money Market vis--vis Capital Market
Concept of Financial Securities and their Credit Rating
Concept of Issuer and Investor in the Financial Markets
The role played by financial markets in determination of yields through price discovery
The Concept and Construct of Yield Curve

44
The Role of Yield in Income Determination

Unit 3: Regulator and Regulation

Introduction to Central Banking and Monetary Policy


RBI Regulations on Lending
Role of CRR and SLR in determining the volume of loans
Auction and buy back of government securities by RBI in open market operations
Money Markets Operations by RBI - Repo, Reverse Repo and Marginal Standing Facility
Role of RBI in creation of a vibrant debt market

Unit 4: International Finance and Monetary Policy

The Foreign Exchange Market


The International Financial System
Monetary Policy Strategy: The International Experience
Lessons from Banking and Financial Crises

References

Frederic S Mishkin, The Economics of Money, Banking and Financial Markets, 7th Edition, Pearson
Addison Wesley

Jagdish Handa, Monetary Economics, Routledge, Oxon, 2nd Edition

Glyn Davies, A History of Money, University of Wales Press, Cardiff, 1st Edcition

Financial Institutions and Markets, Anthony Saunders and Mercia Cornett, MgGraw-Hill, 6th Edition

Note: Study material may be supplied by faculty.

45
OPEN ECONOMY MACRO AND ITS GOVERNANCE
[CEC33104: CC/ Credit 6]
This course is designed to analyze the aggregate macroeconomic issues of price, output, and rate
of interest in the context of an open economy. The course is also designed for the undergraduate
students to get equipped with policy issues especially under open economy framework. The
course also provides theoretical insights into the issue of governance under open economy
framework.

Unit 1: Macro economy in a small open economy without money

Macroeconomic identities under open economy; multipliers in an open economy; foreign trade
multipliers; current account; the government sector.

Unit 2: Macro economy in a small open economy with money; policy analysis

Interest rate and prices in a open economy framework; Commodity and money market
equilibrium; money, exchange rates and prices; Fiscal and monetary policy under open economy
framework; fixed and flexible exchange rate; perfect and imperfect capital mobility; interest rate
parity; Mundell-Flemming model under fixed and flexible exchange rate; Impossible trinity.

Unit 3: Balance of Payment management under fixed and flexible exchange rate

Balance of payment adjustment under fixed exchange rate regime; the role of price in an open
economy; automatic adjustment; exchange rate management

Balance of payment adjustment under flexible exchange rate; Relative price and the trade
balance; the J-Curve, Monetary approach to balance of payment.

Unit 4: Governance in an open economy

Government budget deficit and its impact on open economy; Trade-off in deficit financing and
exchange rate management; Trade policy; political instability and capital flight;

Suggested Readings:

1. Mankiw, N.G, Principles of Macroeconomics. N. G. Mankiw. South-Western Cengage


Learning (6th edition), 2012.
2. Rodseth Asbjorn, Open Economy Macroeconomics, Cambridge University Press,
Cambridge.

46
3. Macro Economics, R Dornbusch, S Fischer ; Mc Graw Hill Education(Sixth Edition);
2005.
4. Dornbusch, Rudiger, Open Economy Macroeconomics (New York: Basic Books, 1980).

INTERNATIONAL TRADE
[CEC33106: DSE/ Credit 6]
This course is based on the international trade theory derived from the price theory in general. It
begins with the basics of price theory to advance to the different standard trade theories that
evolved over time. Once this is accomplished, the course then helps the students move to the
applications and techniques essential in the field of international trade policy. Finally, an
introduction to international finance is to be provided to the students, preparing them for the
contemporary debates from the perspective of the third world countries. International Finance
emerges from transactions in the capital account, which get place in multi-currency
balancesheets and income statements. In this context behaviour of exchange rates, risks in
fluctuations of the exchange rates
Objectives
(i) To learn basic concepts and theories of trade such as to be able to appear in competitive
examination like Indian Economic Service and Civil Service.
(ii) To prepare for higher studies in Economics with specialization in trade
(iii) To join the foreign treasury department of some bank or financial institution.
(iv) To start an export business or foreign currency brokerage/conversion business.

Detailed Syllabus:

Unit 1: Classical theory of international trade

Introduction, Mercantilists views on trade, the labour theory of value, Adam Smiths absolute
advantage, Ricardos comparative advantage, the opportunity cost theory, gains from trade
(constant costs)

Unit 2: Neoclassical theories


Production possibility frontier with increasing costs, community indifference curves, equilibrium
in isolation, gains from trade, incomplete specialization, partial equilibrium analysis- the
equilibrium- relative commodity price with trade, offer curves, general equilibrium, terms of
trade
Unit 3: Modern theory of trade

The Heckscher- Ohlin theory, Assumptions, factor intensity, factor abundance, the production
frontier, factor endowments, factor- price equalization theorem, New trade theories, imperfect
competition, dynamic technological changes

47
Unit 4: International Finance
Balance of payments, foreign exchange market, foreign exchange rate, spot and forward rates,
purchasing power parity theory, fixed exchange rate system vs. flexible exchange rate system,
managed floating, adjustments, stability, Marshal-Lerner condition

Unit 5: International Monetary System

The gold standard, the interwar experience, the Bretton woods System, its collapse, the present
International Monetary System

Unit 6: Exchange Rate Determination, Behaviour, Risk and Management thereof

Demand for and Supply of Currency - Exchange Rate Equilibrium - Determinants of Exchange
Rate - Forwards, Futures and Options in Currencies - Arbitrage - Interest Rate Parity

Readings:
o Obstfeld, (8th Economics:
International Ed.), Pearson
Paul
Education
R. Krugman, Maurice
o International Economics: Dominick Salvatore (8th Ed.),
Wiley India
o International Financial Management, Jeff Madura, 12th
Edition, Cengage Learning, Connecticut
o Open Economy Macroeconomics: R Dornbusch, (International Students
o Edition), Basic Books, New York.
o World Trades and Payments: Caves, Frankel, Jones (9th Ed.), Pearson Education.
o Sodersten, B. and Reed G.(1994) : International
Economics, Macmillan, London, 3rd edition
o Marjit, S. (2008): International Trade and Economic
Development: Essays in Theory and Policy,Oxford
University Press, New Delhi.
o World Trades and Payments: Caves, Frankel, Jones (9th
Ed.), Pearson Education
o International Trade Theory and Policy:
M.Chacholiades, McGraw Hill Book Company (1978)

48
LABOUR ECONOMICS
[CEC33108: DSE/ Credit 6]
This course is designed to provide the theoretical background of labour Economics with special
emphasis on trade union. The course is aimed as complementary to the undergraduate students
studying industrial economics. The course will highlights major theoretical models existing in
labour economics and will highlights theoretical explanations of unemployment.

Unit 1: Aggregate Labour Market

Basic theories of Labour Demand; Labour Supply: A household choice; Empirical Estimation of
the labour demand schedule; Nominal Wage rigidity;

Unit-2: Labour Market: A closer looks

Some stylized facts; Some standard Macroeconomic models for the labour markets; Real wage-
rigidities; Summary

Unit-3: Trade Union Models

Basic Trade Unions Model; Monopoly Trade Union Model, Right to Manage Model; Efficiency
Bargaining Model; Hysteria and persistence of Unemployment.

Unit-4: Unemployment

Insider -Outsider model; Efficiency wage model; Search Model; Labour market institutional
models of Unemployment.

References:

1. Ben J Heijdra and F Van der Ploeg ,The Foundations of Modern Macroeconomics by,
Oxford University Press.

2. Daniel S.Hamermesh, Labour Demand, Princeton University Press,1996.

3. Cahuc, Pierre, and Andre Zylberberg. Labor Economics. Cambridge, Mass. and London:
MIT Press, 2004.

4. Bhattacharjea,Aditya (2006), labor Market Regulation and Industrial Performance in


India:A Critical Review of the Empirical Evidence, The Indian Journal of labor
Economics, 49(2):211-32.

49
5. Deakin Simon (2014), Labour Law and Inclusive Development,Centre for Business
Research, University of Cambridge ,Working Paper No. 458.

50
ENVIRONMENTAL ECONOMICS
[CEC33110: DSE/ Credit 6]
This course is designed to introduce under-graduate students to the economic issues around
natural resources as well as environmental problems from the perspective of economics. Natural
resources being scarce lead to core economic questions regarding the optimal rate of extraction.
On the other hand, how discovery of new resource bases change the pricing and usage of one
resource comes under the domain of resource economics. Designing economic instruments for
regulation of environmental problems as well valuation of environmental services are major two
focus of this course. In addition to that, some global environmental issues along with their
macroeconomic policy impact will be addressed in this course.

Unit 1: Economics and Environment

Introduction; Economics and Environment; Review of Microeconomics and Economic Welfare;


Definition and role of Environmental Economics; Scope and Significance of Environmental
Economics; Relationship between the Environment and the Economic System; Environment as a
Resource: Environmental Quality;

Unit 2: Economics of Exhaustible Resources

Intergenerational liquidity Intertemporal - Dynamic Framework of Optimal Control Market


structure of Non-renewable resources problem of Uncertainty Depletion vs. Discovery
Examples;

Unit 3: Economics of Renewable resources

Renewable resources Problem of uncertainty Case study of Forestry: Single versus Multiple
use Forest Fishery: The concept of Maximum Sustainable Yield (MSY) - Economic Decision
regarding optimal rate of Extraction;

Unit 4: Market Failure and Problem of Externality and Environmental Regulation

Concept of Externalities and Public Bad; Concepts of Rivalry and Excludability; Environmental
Pollution as a Public Bad; Externality (Pigou), Property Rights (Coase), Optimal Pollution;

Pollution Control: Alternative Market Based Instruments Pure policies (Emission Fees,
Standard setting, and Tradable Pollution Permits), Hybrid instruments (two-part tariff),

Unit 5: Environmental Valuation

Measuring values, benefits and costs overview; total value use and non-use values of goods;

51
Total Economic Valuation; Valuation Methods: Stated Preference Approach, Revealed
Preference Approach (intuitive discussion on different valuation methods)

Unit 6: Macroeconomic Purview of Environment

Environment and Global Climate Change; Kiyoto Protocol and Issues around Carbon trading;
Ecological Footprints; International Environmental Policies; Environmental Performance Index:
choice of indicators; Environmental Performance Index: Comparison across Developing and
Developed World;

References:
1. Charles Kolstad, Intermediate Environmental Economics, Oxford University Press, 2nd
edition, 2010
2. Costanza, et.al. (1998): An Introduction to Ecological Economics.
3. Bhattacharyya, R.N. (2001): Environmental Economics: Indian Perspective, OUP
4. Hanley, Shogren & White (1997): Environmental Economics, McMillan.
5. James, Mishra & Murty (1999) Economics of Water Pollution: The Indian Experience.OUP
6. Kadekodi , G. (2004): Environmental Economics in Practice: Case Studies from India, OUP
7. Environmental Performance Index, http://epi.yale.edu/ , Yale University;
8. United Nations Framework on Climate Change, http://newsroom.unfccc.int/
Kiyoto Protocol http://www.kyotoprotocol.com/

52
PROJECT
[CEC33412: 6 Credits]
This course plan aims to provide exposure to the fundamentals of project writing techniques and
methods. Students are expected to learn critical reviewing of literatures in the area they are
interested in. Writing a short project will enhance their analytical and critical view towards
contemporary issues.

It is intended to enable students with writing guidelines which include the structuring of an
economic problem in reference to existing literature. The search of literature both theoretical
along with empirical evidences will train them into critical thinking. They need to present their
understanding first, later on they need to write a short project. It is expected that the students will
identify one particular research area which they will carry forward in writing dissertation in the
next semester. Identifying the research question in vast academic literature is the requisite of this
course. Students should be able to present their own viewpoint on the topic in the form of a
critique and future research ideas.

The final project report should include an Abstract, Introduction, Literature review, Research
Issue/Question and References. However depending on the type of topic the sections for Project
writing may vary student wise. In due course the students will learn proper referencing of
literature (APA, MLA styles of referencing), formatting styles etc.

53
DETAILED SYLLABI IN PROCESS

FOR

M.A. / M.Sc. in ECONOMICS

2017-19

1
COURSE STRUCTURE

FOR

M.A. / M.Sc. in ECONOMICS

2017-19

2
SCHOOL OF ECONOMICS & COMMERCE
POST GRADUATE PROGRAMME STRUCTURE

(UNDER CHOICE BASED CREDIT SYSTEM)


M.A./M.Sc. in ECONOMICS
SEMESTER 1
Contact
TYPE Hours per Week
SL. COURSE
OF TITLE OF THE COURSE REMARKS
NO CODE
COURSE L T P C

HC CEC51101 ADVANCED MICROECONOMICS 3 1 0 4


HC CEC51103 ADVANCED MACROECONOMICS 3 1 0 4
HC CEC51105 MATHEMATICAL ECONOMICS 3 1 2 4
HC CEC51107 HISTORY OF ECONOMIC THOUGHT 3 1 0 4
HC CEC51109 INSTITUTIONAL ECONOMICS 3 1 0 4
SUB TOTAL 20
SEMESTER 2
POLITICAL ECONOMY OF
HC CEC51102 3 1 0 4
DEVELOPMENT
HC CEC51104 INTERNATIONAL TRADE 3 1 0 4
INDIAN ECONOMY IN THE GLOBAL
HC CEC51106 3 1 0 4
CONTEXT
HC CEC51108 ECONOMETRIC METHODS 3 1 2 4
TOOLS FOR QUANTITATIVE &
HC CEC51110 3 0 3 4
QUALITATIVE RESEARCH
Audit,
INT CEC51612 INTERNSHIP One Month
4
SUB TOTAL 24
SEMESTER 3
GLOBALIZATION AND
HC CEC52101 CONTEMPORARY ISSUES OF 3 1 0 4
DEVELOPMENT
SC SOFT CORE (Paper-A) 3 1 0 4
SC SOFT CORE (Paper-B) 3 1 0 4
SC SOFT CORE (Paper-C) 3 1 0 4
OE OPEN ELECTIVE 3 1 0 4
SUB TOTAL 20

SEMESTER 4
3
HC CEC52102 INTERNATIONAL FINANCE 3 1 0 4
HC CEC52104 ECONOMICS OF SOCIAL ISSUES 3 1 0 4
SC SOFT CORE (Paper-D) 3 1 0 4
SC SOFT CORE (Paper-E) 3 1 0 4
MDS CEC52718 DISSERTATION - 6 - 6
OE OPEN ELECTIVE 3 1 0 4 OPTIONAL
SUB TOTAL 22

TOTAL REQUIRED CREDIT 86

Soft Core Courses (SC):


Soft Core Courses are offered in Semester III and Semester IV. Students are required to specialize in one stream
during second year. They need to opt for any one stream from the list below. Under each stream five
paperswill be taught.

List of Specialization:
This list is amendable subject to availability of faculty resource and university infrastructure.
1. Applied Economics
2. Economics of Public Policy
3. Banking & Finance
List of Soft Core Courses under Each Specialization
Applied Economics Economics of Public Policy Banking & Finance
Pap Paper Name Code Paper Paper Name Code Pap Paper Name Code
er er
SEMESTER III
A Statistical Inference A Economics of CEC52109 A Financial CEC52115
And Estimation Public Health Institutions And
CEC52103
Methods Market

B Advanced B Economics of CEC52111 B Principles of CEC52117


Econometric CEC52105 Private Health Modern
Methods Market Banking
C Econometric CEC52107 C Economics of CEC52113 C Corporate CEC52119
Analysis Of Data Education Finance
SEMESTER IV
D Multivariate Data D Economics of D Principles of
Analysis CEC52106 Natural CEC52110 Investment CEC52114
Resources Banking
E Analysis of Big E Environmental E Security
Data Regulation And Analysis And
CEC52108 CEC52112 CEC52116
Valuation Portfolio
Management

4
ABBREVIATIONS
HC : Hard Core Course SC : Soft Core Course
SEC : Skill Enhancement Course OE : Open Elective Course
INT : Internship
MDS : Masters Dissertation

5
FIRST YEAR

Semester I

6
CEC51101
ADVANCED MICROECONOMICS
[HC: 4 Credits, 60 Contact Hours]
This course aims at a clear understanding of the micro foundations of modern economic theory. Consumption
and production are to be taught based on the principle of self-interest maximization, at the individual level.
Next, the two aspects are to be integrated in a perfectly competitive market framework. Finally, the theorization
is to be produced towards various market imperfections line externalities, asymmetric information and others.

Unit 1: Theory of consumer behavior

History of utility theory (Shift from Cardinal to Ordinal Approach); Classical demand theory: Preference
relation, their properties, the utility Functions, homothetic preference, utility maximization, indirect utility
functions, Roys Identity, expenditure minimization, Hicksian demand, duality, income Effect, substitution
effect and Slutsky equation; theory of revealed preference: WARP, SARP, compensating and equivalent
variations; intertemporal choice, time preference, utility maximization, discounted value; choice under
uncertainty, expected utility function, attitude towards risk

Unit 2: Theory of firm


Production Sets, input requirement sets and production functions, returns to scale and homogeneity; Cost
minimization, properties of cost functions, Input demand functions and Shephards Lemma, Duality between
cost and production functions, short run and long run cost functions; duality between cost and production
functions, short run and long run cost functions; Factor market: marginal productivity theorem, labour market,
envelope theorem, Eulers theorem;

Unit 3: Market: Partial Equilibrium analysis


Perfect Competition: Profit maximization and profit functions, input demand Functions and Hotellings Lemma,
Short run profit maximization: break-even and shut down points, short run market equilibrium and the supply
function, Long run supply, market equilibrium under perfect competition: short and long runs, Stability of
equilibrium, comparative static: exogenous changes and impact of policy, Imperfect completion: Monopoly-
output and price, price discrimination, social costs; Monopolistic competition, features, equilibrium,
Chamberlain, Robinson models; Oligopoly: features, equilibrium, Cournot, Bertrand, Stackleberg models

Unit 4: General equilibrium analysis and welfare economics

7
From partial to general equilibrium framework; The basic model: Edgeworth Box analysis of an exchange
economy, equilibrium (Existence, uniqueness, stability), the general structure - Walras Law, Pareto Optimality,
concept of core - Core equivalence theorem; Welfare economics: from Pigou to Pareto, Fundamental Theorems
of Welfare Economics, Equity- efficiency trade-off, Compensation criteria, social welfare function, theory of
second best

Unit 5: Market failure


Externalities: Positive, negative, consumption, production; Solutions: government interventions, Coase
Theorem; Public goods: optimality, overproduction, Lindahl equilibrium, Asymmetric information

Unit 6: Economics of information


Introduction to Game Theory, Simultaneous games: Dominant and dominated strategies, Nash equilibrium,
Dynamic games: sequential rationality, backward induction, sub-game perfection, Incomplete information
games: Adverse selection, signaling, moral hazard, screening, principal-agent problem, Bayesian Nash
equilibrium

Suggested Readings
1. Microeconomic Theory. Andreu Mas-colell, Michael D. Whinston, and Jerry R. Green John. Oxford
University Press India; 1st edition (2012)
2. Microeconomic Analysis. Hal R. Varian. W W Norton & Company; 3rd edition (2010)
3. Microeconomics. H. Gravelle, R. Rees. Pearson India; 3rd edition (2007)
4. Advanced Microeconomic Theory. Geoffrey A. Jehle, Philip J. Reny. Pearson India; 2nd or later edition
5. Microeconomics: Theory and Applications. Anindya Sen. Oxford University Press; 2nd edition (2006)
6. Microeconomic Theory: Basic Principles and Extensions. Walter Nicholson and Christopher Snyder.
Cengage; 11th edition (2014)
7. An Introduction to Game Theory. M. J. Osborne. Oxford University Press India; 1st edition (2012)
8. Game Theory: An Introduction. E. N Barron. Wiley India Pvt. Ltd.; 2009

8
CEC51103
ADVANCED MACROECONOMICS
[HC: 4 Credits, 60 Contact Hours]
This course will explore at a deeper level some of the topics of open economy macroeconomics and
study other research topics in macroeconomics.This course will take students through models of aggregate
demand and aggregate supply, consumption behaviour, investment behaviour, macroeconomics of developing
countries, overlapping generation model and its application.
Unit 1:Open Economy Macroeconomics
Balance of payments, Exchange rate systems, Fixed vs. Flexible Exchange Rate; Perfect and Imperfect Capital
Mobility; Mundell-Fleming model: Monetary and Fiscal Policy; Expectations and Exchange Rates, Monetary
approach to Balance of Payments.
Unit 2: Aggregate Demand & Supply
Models of aggregate supply, Phillips curve, Adaptive and Rational Expectations, Policy evaluation and the
Lucas critique, New classical analysis, Real business cycles;
Unit 3: Consumption Behaviour
Permanent Income and Life cycle theories, Consumption Theory and Halls Random Walk;
Unit 4: Investment Behaviour
Neoclassical theory, Tobins q, Imperfect information and investment;
Unit 5: Macroeconomics of Developing Countries
World Bank- IMF model; Structural Change and Unbalanced Growth; Financial Repression; Exchange Rate
Dynamics; International Financial Markets and Financial Crises;
Unit 6: The Overlapping Generations model
The RamseyCassKoopmans Model; The Overlapping Generations Model (OLG model) or the Diamond
model;

Readings:
1. Lectures on Macroeconomics . Blanchard and Fischer. Phi Learning; 1st edition (2009)

2. Advanced Macroeconomics. David Romer. Tata McGraw - Hill Education; 4th edition (2011)

3. Macroeconomics: Theories & Policies. R. Froyen. Pearson Education; 10th Edition (2013)

4. Rudiger Dornbusch, Stanley Fischer and Richard Startz, Macroeconomics, 7th (or later) edition, McGraw Hill.

Suggested Readings:
9
1. Macroeconomic Theory & Policy. Amit Bhaduri. Setu Prakashani (2014)

2. Analytical Development Economics: The Less Developed Economy Revisited. Kaushik Basu. Oxford
University Press India; 1st edition (2010)

3. Advanced Macroeconomics (Volume 1 & 2). K. R. Gupta. Atlantic; 2nd edition (2010)

4. Macroeconomics for Developing Countries. Raghbendra Jha. Taylor & Francis Ltd; 2nd Revised edition
(2003)

5. Introduction to Economic Growth. Charles I Jones. Viva Books; 2nd edition (2013)

10
CEC51105
MATHEMATICAL ECONOMICS
[HC: 4 Credits, 60 Contact Hours]
The course is intended to deliver knowledge of mathematical techniques suitable for economic analysis. It
assumes some prerequisite knowledge of mathematics, albeit the approach is lucid and aims to show students
how to do and apply the mathematics they require for a successful study of economics. Economic applications
are considered to map successful application of mathematics in economics. Topics covered include optimization
techniques, real analysis, and linear algebra, differential equations.
Unit 1: Static Optimization I
Unconstrained Optimization, Real-Valued Functions of Several Variables, Second Order Conditions, Economic
Applications.
Unit 2: Static optimization II
Classical Constrained Programming, Kuhn Tucker Formulation, Envelope Theorem, Economic Applications.
Unit3: Dynamic Optimization
The Nature of Dynamic Optimization, Alternative Approaches to Dynamic Optimization, Optimal Control
Theory.
Unit4: Introduction to Real Analysis
The Real Number System, Basic Notions of Set Theory, Limits and Continuity, Derivatives.
Unit5: Introduction to Linear Algebra
Vector Spaces, Linear Transformations, Matrices,Linear Equations and Determinants.
Unit6:Differential Equations and Stability Issues
Differential Equations, Stability Theory, Phase Diagrams.
Readings:
1. Mathematics for Economists. Carl P. Simon, L Blume. Viva Norton (Student edition). Reprint 2015.

2. Essential Mathematics for Economic Analysis. Knut Sydsaeter, Peter J. Hammondand , and Arne Strm.
Pearson India; 4th edition (2013).

3. Optimization in Economic Theory. Avinash K. Dixit. Oxford University Press; 2nd Revised edition
(2010)

4. Linear Algebra. Hadley. Narosa Book Distributors (2002)

5. Real Analysis. H. L. Royden. Prentice Hall India, 4th edition (2011)

11
6. Fundamental Methods of Mathematical Economics. A. C. Chiang, and Wainwright. McGraw Hill
Education (India) Private Limited; 4th edition (2013)

7. Elements of Dynamic Optimization. Chiang, Alpha. C. Sarat Book Distributors (2012)

8. Mathematical Optimization and Economic Theory. Michael D. Intriligator. PHI Learning (SIAM); 2012

9. Linear Algebra - A Geometric Approach. Ted Shifrin, Malcolm Adams., W. H. Freeman (2010)

10. Optimization and Stability Theory for Economic Analysis. Beavis & Dobbs. Cambridge University
Press (1990)

12
CEC52101
INSTITUTIONAL ECONOMICS
[HC: 4 Credits, 60 Contact Hours]

The main objective of this course is to understand how the role of the evolutionary process and the role of
institutions are shaping economic behaviour. It helps to understand the social systems, or "institutions," that
constrain the use and exchange of resources (goods and services) and their consequences for economic
performance. It makes us to understand how a countrys institutions can encourage or prevent the efficient use
of a societys human and natural resources.

Unit-I: Preliminaries of the Old Institutional Economics


The concept of Institutions in the old institutional economics; Adam Smiths The Theory of the Moral
Sentiments; The pragmatic philosophy of William James, Charles Peirce, John Dewey and Clarence Ayers;
formation of habits, the rule of thumb, development of customs traditions and mores as regulators of social
conduct; development of legal institutions. TB Veblen: The Theory of the Leisure Class - informal
institutions/habits and traditions, government as part of the established, institutional system (vested interests),
proposal of a system of industrial planning by technical experts, Jungian Archetypes and social psychology; R
Commons and JK Galbraith - formal (legalized) institutions, Scientific investigation methods; WC Mitchell-
Establishment of Institutions, National Bureau of Economic Research (NBER), Statistical basis for study of
institutions, New School for Social Research, origins of agent-based theory; G Myrdal interdependence of
social, political, economic and institutional phenomena, modernization ideals. Religion as an institution: Max
Webers The Protestant Ethic and the Spirit of Capitalism. Kenneth Boulding: Grants Economics; The three-
fold taxonomy of social organization
Unit-II: Introduction to Institutional Analysis
The concept of institution in the New Institutional Economics: Institutions and organizations. Functions of
social and economic institutions; Interaction situations and the types of norms: prisoners' dilemma-type
situation; co-ordination situation; inequality situation; Enforcement characteristics; Institutional structure of a
society; Formal and informal institutions; Sanctions for disobeying norms (self-enforcing sanctions, guilt,
shame, informational sanctions, bilateral costly sanctions, multilateral costly sanctions); Conditions of norms'
effectiveness. Interaction of formal and informal institutions; The limits of imitations of institutions from best-
performing countries; The problems of their enforceability; A Comparative view of the Old Institutional
Economics and the New Institutional Economics and modern institutionalism.
Unit-III: Transaction Costs
The concept of transaction; Market and intra-firm transactions; Transaction costs as friction in the economy;
Transaction costs and transformation costs; Interdependency between transaction costs and transformation
costs; Types of market transaction costs and means of transaction costs minimization (search and information
costs; measurement costs; bargaining and decision costs; supervision and enforcement costs); Comparative
advantages and shortcomings of the legal enforcement mechanism; Reputation as a contract enforcement
device; Ideal model of "perfect reputation"; Shortcomings of the reputation as a contract enforcement

13
mechanism. Reputation and the "free rider problem"; Reputations aided by institutions. Transaction costs, the
main types of economic exchange and their institutional structure; Coexistence of the main types of economic
exchange in the modern society; Transaction cost measurement.
Unit-IV: Economic Theory of Property Rights
The definition of property rights; Property rights in different Laws/traditions; The property rights approach:
some basic concepts. Specification of property rights, the bundle of rights, partitioning of property rights,
attenuation of property rights; Assigning of property rights: the internalization of externalities; The Coase
Theorem; Critic of Coase (dynamic effects of alternative legal rules, wealth effect, distributional effects,
strategic behavior and the problem of holding-out, endowment effect, sociological critic, unrealistic assumption
about zero transaction costs); Alternative property rights regimes; Common property (open access) and the
tragedy of the commons; Exclusive property rights and the conditions for their emergence; The first economic
revolution. Communal property; Optimal group size; Private property; Moral and economic aspects of private
property; Public property; The emergence of property rights; The optimistic theory of the emergence of
property rights (naive model); The interest-group theory of property rights; The costs of collective action; The
theory of rent-seeking; Interest-groups and rent-seeking behavior in an economy.

Basic Reading List


Barzel, Y. (1982): Measurement Cost and the Organization of Markets, Journal of Law and
Economics, Vol.25, pp. 27-48.

Blaug, M. (1978): Economic Theory in Retrospect (3e), CUP, Cambridge and NY.

Coase, R. (1937): The Nature of the Firm, Economica, Vol.4, pp. 386-405.

Coase, R.H. (1960): The Problem of Social Cost, Journal of Law and Economics, Vol.3, pp.1-44.

Dahlman, C. (1979): The Problem of Externality, Journal of Law and Economics, Vol.22, pp. 141-
162. 6. Eggertson, Thr. (): Institutions and Economic Behavior, Ch.1, pp.1-32.

Eggertson, Thr. (): Institutions and Economic Behavior, Ch.2, pp.33-78, Ch.4, pp.83-124, Ch.8,
pp.247-280, Ch.9, pp. 281-316.

Elster, J. (1989): Social Norms and Economic Theory Journal of Economic Perspectives, 3, 99-117.

Menard, C. and M. Shirley (eds.) (2005): Handbook of New Institutional Economics, Springer.

Milgrom, P. and J. Roberts (1992): Economics, Organization and Management, Prentice-Hall Int., Ch.2,
pp.19-35, Ch.5, pp.147-149, Ch.8, pp.259-269.

Milgrom P. (...): Roberts J. Economics, Organization and Management, Ch.9, pp.288-307.

North, D. (1990): Institutions, Institutional Change and Economic Performance, CUP, Ch.5, 6, 7.

North, D. (1990): Institutions, Institutional Change and Economic Performance, CUP, Ch.8. 14. Posner,
R. (1997): Social Norms and the Law: an Economic Approach, AER, 87, 365-369.

14
FIRST YEAR

Semester II

15
CEC51102
POLITICAL ECONOMY OF DEVELOPMENT

[HC: 4 Credits, 60 Contact Hours]

Unit 1: Introduction to political economy


Renaissance, Enlightenment, Modernity, Colonialism, Capitalism, Merchantilism, Physiocracy;

Unit 2: Classical Political Economy


The labour theory of value - Adam Smith, invisible hand, theory of growth, role of state, value theory; Ricardo
income distribution, theory of rent, value theory, J.S. Mill, the Marginalist revolution,

Unit 3: Marxian Theory- A Critique of Political Economy


Idealism vs. Materialism, Dialectics as a method, Commodity and Money, Labour power, Labor process, the
capitalist mode of production, surplus value and capital, historical materialism, value theory
Unit 4: Overdetermination
Epistemology, ontology, determinism, dualism, economic dualism, Transition, capitalist development and
poverty eradication, history of Capitalist transition and Imperialism,
Introduction to critique of economic dualism and alternatives, Transition beyond capitalism;

Unit 5: Class and Development


Class focused economy: class, overdetermination, economy, capitalism, class justice and post-capitalist
economy, Class and need: surplus, class and development distribution, development justice, public policy,
inclusion, poverty, Capitalist Hegemony: nodal point foregrounding and foreclosure;

Unit 6: Critique of Political Economy of Development

Critique of Political Economy of Development; re-examining dual economic model (Lewis, informal-formal,
etc.); interrogating alternative theories of transition and development; rethinking transition: reconstruction
beyond the capitalist hegemonic; post-capitalist politics; Capitalism and globalization: neo liberalism and global
capitalism; formation of economic order in post-globalization period, capitalist development and Primitive
Accumulation of third world/world of the third;
Readings:

1. Schumpeter (1954): History of Economic Analysis, Harvard University Press


2. Screpanti & Zamagni (2005): An Outline of the History of Economic Thought, OUP
3. Snowdon and Vane (2005): Modern Macroeconomics, Edward Elgar Publishing Limited
4. A.P. Thirlwall. Growth and Development. Palgrave McMillan. (8th edition or latest)
5. Resnick, S. and R. Wolff. 2012. Contending Economic Theories. MIT Press.
16
6. Marx, K. Capital: A Critique of Political Economy. Volumes 1, 2 and 3. Progress Publishers or
Penguin Classic.
7. Marx, K. 1976. Grundrisse: Foundations of the Critique of Political Economy. Penguin Classic.
8. Lukcs, G. 1971. What is orthodox Marxism?. History and Class Consciousness: Studies in Marxist
Dialectics. Cambridge, Massachusetts: The MIT Press.
9. Engels, F. 1976. Ludwig Feuerbach and the end of Classical German Philosophy. Peking: Foreign
Languages Press.
10. Cohen, G.A. 1978. Karl Marxs Theory of History: A Defence. Princeton University Press.
11. Resnick, S. A. and Wolff, R. D. 1987. Knowledge and Class: A Marxist Critique ofPolitical Economy.
University of Chicago Press.
12. Escobar, A. 1995.Encountering development: the making and unmaking of the third world. Princeton
University Press.
13. Sanyal, K. 2007. Rethinking Capitalist Development: Primitive Accumulation,Governmentality and
Post-Colonial Capitalism. Routledge.
14. Chakrabarti, A, S, A, Dhar and Cullenberg, S. 2012. World of the Third and GlobalCapitalism.
Worldview Press.
15. Chakrabarti, A and Dhar, A. 2009. Dislocation and Resettlement in Development: FromThird World to
World of the Third.Routledge.
16. Gibson-GrahamJ.K. 2006. The Postcapitalist politics. University of Minnesota Press.
17. Sen, A, K.2003. Rationality and Freedom, Oxford University Press: New Delhi.
18. Sen, A, K. 2009. The Idea of Justice, Penguin.
19. Sen, A. 1988. The Concept of Development. Handbook of Development. Vol I.
20. Sen, A. 2000. Development as Freedom. Oxford University Press.
21. Sen, A.1990. On Ethics and Economics. Oxford University Press.
22. Sen, A.1999. Commodities and Capabilities. Oxford University Press.
23. Basu, P. K. 2008. Globalization: An Anti text. Aakar Books.

17
CEC52103
INTERNATIONAL TRADE
[HC: 4 Credits, 60 Contact Hours]

This is an advanced course on international trade theory and empirics. It begins with a classical trade model and
proceeds by introducing various complexities thereby tracking the evolution of modeling in international
economics. In the latter part, we revisit the classical models, in a more theoretical manner to bring out the
ongoing arguments in favour of and against free trade. Finally, we attempt an understanding of the global
scenario from the third world perspectives to bring out the shark contrasts in views.

Unit I: Trade Theory & Policy under Perfect Competition


Arbitrage, gains from trade and the concept of comparative advantage,
Fixed endowments: the exchange model,
Labor productivity and comparative advantage: the Ricardian model,
Immobile factor and International trade: the short-run specific-factor model,
Structure of endowments and the pattern of comparative advantage: the long run,
Heckscher-Ohlin-Samuelson model. The theory of tariff, Trade policy with domestic distortions,
International Political Economy: WTO and the non-tariff barriers, Basic Accounting, Internal and
External Balance, Capital Mobility
Unit II: Trade, Imperfect Competition and Development
Rethinking International Trade, International Trade with Increasing Returns to Scale, Oligopolistic
competition and Strategic Trade Theory,
Trade and Development Background, Brief views of Smith, Ricardo, Mill, Marx Rosenstein-Rodan,
Nurkse, Hircsmann, Myrdal, Trade as a vent for Surplus, The core periphery interpretation of trade and
development and the drain theory, The infant industry argument
The Prebisch Singer argument, Unequal exchange theories, The open dual economy, Terms of trade and
development, Immiserizing growth, Bhagwati Johnson Brecher and Alejandro, Trade on growth,
growth on trade, Technology and trade, empirical support for trade and development, GATT, WTO and
the less developed countries

References:
1. Rogoff & Obstfeld (1998): Foundations of International Macroeconomics, MIT Press
2. Dornbusch (1980): Open Economy Macroeconomics, Norton
3. Benassy (1984): Macroeconomics, Academic Press
4. R. Jones, R. Caves and J. Frenkel (CJF), World Trade and Payments, 4th edition,
5. R. Jones, International Trade: Essays in Theory, North Holland,1979.
6. Ronald Findlay, International Trade and Development Theory, Columbia University Press, 1973.

18
7. Paul Krugman, Rethinking International Trade, 1994, MIT press.
8. Jagdish N. Bhagwati, T. N. Srinivasan and Arvind Panagariya, Lectures on International Trade, MIT
Press, 1998.
9. Helpman & Krugman (1989): Trade Policy & Market Structure, MIT Press
10. Kierzkowski (ed.): Monopolistic Competition and International Trade, 1984, OUP
a. Bhagwati, J. (Ed.) (1981). International Trade: Selected Readings, Cambridge University Press,
Massachusetts.
11. Chacholiades, Miltiades (1990). The Pure Theory of International Trade, McGraw Hill, Kogakusha,
Japan.
12. Cherunilam, Francis (2006), International Economics, Tata McGraw-Hill Publishing Co. Ltd., New
Delhi.
13. Heller, H. Robert (1988). International Trade: Theory and Empirical Evidence, Prentice-Hall of India
Pvt.
14. Ltd., New Delhi
15. Kenen, Peter B. (1989). The International Economy, Prentice-Hall of India Pvt. Ltd., New Delhi.
16. Kindleberger, C.P. (1977). International Economics, D.B. Taraporevala Sons & Co. Pvt. Ltd., Bombay.
17. Meade, James Edward (1952). A Geometry of International Trade, George Allen and Unwin Ltd.,
London.
18. Roy, P.N. (1986). International Trade: Theory and Practice, Wiley Eastern Ltd., New Delhi.
19. Sodersten, Bo (1991). International Economics, The Macmillan Press Ltd., London.

19
CEC51106
INDIAN ECONOMY IN THE GLOBAL CONTEXT
[HC: 4 Credits, 60 Contact Hours]

This course will cover the contemporary issues in Indian Economy with primary focus of Post Reform period.
The paper will discuss about the changes in Indias Remarkable Growth experience after shift of the trajectory
from Planned Economy to Market Economy. Along with detailed outlay of the output and employment pattern,
this paper will also elaborate the infrastructure and policies as an emerging economy. Finally the Growth versus
Distribution debate will be covered with special emphasize on the challenges of the State in Post Globalization
era.
Unit 1: India as an emerging economy
Economic Reforms (Structural adjustment and Stabilization policies; Membership of WTO; Second Generation
Reform; High growth rate since 2004 and BRIC membership; Sectoral performance in terms of output and
employment; what has become the engine for growth; Macroeconomic Policies and their role: Fiscal Policy,
Monetary Policy, Trade Policy etc. (Brief discussion); Distribution Implications - Growth vs. poverty,
inequality jobless growth?
Unit 2: Sectoral Performances in Indian Economy: Output Composition
Agriculture: Change in growth, yield and cropping pattern; Sectoral contribution in GDP; Crop failure
increased vulnerability - Farmers suicide;
Industry: Change in the composition Identification of high growth industries; composition of Secondary
sector; Primary industries (traditional and dirtier) to Modern sophisticated industries (cleaner and
technologically advanced);
Service sector growth: skill intensive sector; high return for investment in education (skill accumulation)
Unit 3: Employment Implications of Growth
Chnages in Labour Market: Changes in employment and Labor Productivity; Trends in Wages and wage
inequality; Increased casualization of labour; increase in labour mobility viz-a-viz loss of social security; High
risk and high return in job market;
Gender and Labour Market;
Countering unemployment by State: Implications of Employment Generation Schemes;
Unit 4: Infrastructural Development in India Public Private Partnership
Infrastructural Development; How to Finance, Maintain and Implement User Right; Conflict between Economic
Efficiency and Social Justice; Private investments in Infrastructure; Public Private Partnership: Definition,
Structure, and Operation; PPP Initiatives in Developing Countries: Case studies;

Unit 5: Fiscal, Monetary and Trade Policies

20
Macroeconomic Policies and their role: Economic Reforms in 1990s; Crisis and Contraction, Slowdown in
investment, Sources of Policy Failures;
Recovery from Crisis: Fiscal Policy, Monetary Policy, Trade Policy;
Unit 6: Growth vs. Distribution
Growth with Disparity; Growth vs. Distribution Poverty, Inequality, Human Development; Income change
with increased Vulnerability;
References:
1. India's Emerging Economy: Performance and Prospects in the 1990s and Beyond (2004): ed.
KaushikBasu, OUP.
2. Employment with Dignity (2005): Amit Bhaduri.
3. India in Transition: Freeing the Economy, by Jagdish Bhagwati, OUP.
4. Employment and wages in Indian manufacturing: Post-reform performance, by Bishwanath Goldar and
Amit Sadhukhan, Working Paper No. 185, ILO, Geneva;
5. India development reports.
6. Development and Sustainability: India in a Global Perspective (2013): eds. Sarmila Banerjee and Anjan
Chakrabarti, Springer;
7. Economic Survey of India.
8. Indian Economy: A Macro-Theoritic Analysis (2016): Chandana Ghosh and Ambar Ghosh, PHI
learning.
9. India: Economic Development and Socila Opportunity (1995): Jean Dreze and Amartya Sen, OUP.
10. Indian Economy: Performance and Policies (2015): Uma Kapila. Academic Foundation; 15th Revised
edition.
11. Indian Economy (2015): Gaurav Datt, Ashwani Mahajan. S. Chand Publishing.
12. Vaidyanathan A.(1994). Performance of Indian Agriculture since Independence in Kaushik Basu (ed.)
Agrarian Question, Oxford University Press.
13. M.S. Ahluwalia. 2002. Economic Reforms in India since 1991: Has Gradualism Worked? The Journal
of Economic Perspectives, Vol. 16, No. 3.
14. I.J. Ahluwalia & I.M.D. Little (ed.). 1999. Indias Economic Reforms and Development, Essays in
honour of Manmohan Singh, Oxford University Press, New Delhi.
15. M Rakshit. (2007): Services-led growth: The Indian Experience in Money and Finance, February
16. G S Bhalla. (2004): Globalisation and Indian Agriculture: State of the Indian Farmer. Academic
Publishers: New Delhi

21
CEC51108
ECONOMETRIC METHODS
[HC:4 Credits, 60 Contact Hours]
Econometrics is concerned with the application of statistical theory to the analysis of economic data and the
estimation of economic relationships. This course intends to expose students to the statistical techniques that
economists use for estimating, testing, and forecasting economic relationships. This course covers both an
introduction to econometric theory and methods, and a range of applications.
Unit 1: Statistics Prerequisites
Data - Classification and presentation; Frequency distribution - Diagrammatic representation of frequency
distribution; Measures of Central Tendency; Measures of Dispersion; Measures of Skewness & Kurtosis;
Bivariate data: correlation, covariance.
Unit 2: Introduction to Econometrics
What is Econometrics? Steps in Econometric Analysis; Specification of Econometric Model and Assumptions;
Basic Concepts of Estimation and Desirable Properties of Estimators; Data for Econometric Analysis.
Unit 3: Simple Linear Regression Analysis
Definition of Simple Linear Regression Model (SLRM); Ordinary Least-squares (OLS) Estimation of SLRM;
Properties OLS Estimators; Statistical Inference in SLRM; Measuring Goodness of Fit; Analysis of Variance on
OLS Regression; Interpretation of Regression Results.
Unit 4: Multiple Linear Regression Analysis
Definition of Multiple Linear Regression Model (MLRM); OLS Estimation of MLRM; Properties of Multiple
Regression Coefficients; Measuring Goodness of Fit; Problems of Inference in MLRM; Interpretation of
Regression Results.
Unit 5: Heteroscedasticity, Autocorrelation, & Multicollinearity
Heteroscedasticity: Definition, Consequences, Detection, Remedial Measures.
Autocorrelation: Definition, Consequences, Detection, Remedial Measures.
Multicollinearity: Definition, Consequences, Detection, Remedial Measures.

Unit 6: Stationary Time Series


Stochastic Time Series and Stationarity; Box-Jenkins Methodology of Stationary Time Series Analysis; Time
Series with Trend - Deterministic and Stochastic Trend; Tests of Unit Root.

Core Readings:
1. Introduction to Econometrics. G. S. Maddala, 2nd Edition, Macmillan, New York
2. Basic Econometrics, D Gujarati, Tata McGra-Hill, Delhi, 4th Edition
Suggested Readings:
1. Econometrics. B. H. Baltagi. Springer (india) Private Limited; 3rd edition (2013)
2. Econometric Analysis. William H. Greene. Pearson India; 5th edition (2003)
22
3. Principles of Econometrics: A Modern Approach Using EViews. Sankar Kumar Bhaumik. Oxford
University Press India (2015)
4. Gauss and Invention of Last Square, Stigler S. M., The Annals of Statistics 9(3), pp 465-474
5. That descriptions be kept as simple as possible until proved inadequate, The World of
Mathematics, vol. 2, J. R. Newman (ed.), Simon & Schuster, New York, 1956, p. 1247, or, Entities
should not be multiplied beyond necessity, Donald F. Morrison, Applied Linear Statistical Methods,
Prentice Hall, Englewood Cliffs, N.J., 1983, p. 58.
6. G. S. Becker, Crime and Punishment: An Economic Approach, Journal of Political
Economy,76(8), pp. 169217.

CEC51612
INTERNSHIP
[AUDIT, ONE MONTH]
Summer internship will be of one month duration, during the summer vacation after the end semester exams of
Semester II. The students will be given a list of internship opportunities with NGOs, civil society organisations,
think tanks, governmental agencies and private companies. At the successful completion of summer internship,
students have to submit a detailed internship report. Students will receive certificates both from the organisation
and the University.

23
SECOND YEAR

Semester III & IV

24
CEC52101
GLOBALIZATION AND CONTEMPORARY ISSUES OF DEVELOPMENT
[HC: 4 Credits, 60 Contact Hours]
The course deals with the principal issues of economic development, with the objective of preparing students
for advanced study and policy-oriented research in this subject area. Emphasis will be on economy-wide
aspects of economic development, with special references to international dimensions of national development
policy making. In this course, we will strive to develop a more nuanced view which sees development and
globalization as an inter-related set of historical processes and mechanisms which have revolutionized much of
human society over the last several decades.
Unit 1: The Paradigm of Development
The emergence of the development paradigm- Capital accumulation through planned industrialization in a
traditional agrarian economy- The role of the developmental state- The role of international organizations: the
IMF, the World Bank and the ILO- Alternative strategies for industrialization: import substitution and export
promotion.
Unit 2: The Evolution of Measures of Development
Poverty, Inequality and Development- Measuring Inequality and Poverty- Income Poverty Index and Human
Poverty Index. Per Capita income- Physical Quality of Life Index- Human Development Index- Gender
Development Index- Gender Empowerment Measures.
Unit 3: Social Sector and Economic Development
Education and Health in Economic Development- Mortality and Morbidity- assessment of health status in terms
of Disability-Adjusted-Life-Years (DALY)- Analysis of Disease Burden & Epidemiological Transition theory
of Development.
Famine: Supply failure vis--vis entitlement failure; Self-help-groups and poverty management; NGO and the
provision of merit goods.
Unit 4: Globalization
Is globalization an unprecedented phenomenon? Integration of the developing economies into the global order:
the structural adjustment program (SAP)- Trade liberalization: WTO- Capital flows and financial integration-
Communication technology and the death of distance: off-shoring and outsourcing- The global regime of
property rights- The global economy and the developmental state.
Unit 5: Globalization and the Developing World

25
Globalization and inequality- Globalization and employment- Trade liberalization, dispersion of production and
the international division of labour- WTO and the nation state- Trade liberalization, capital flows and
environment- Globalization and agriculture- Development and Democracy.
Unit 6: Debating Consequences of Globalization
The Global Financial Crisis of 2008, and Increasing Inequality; Globalization and Working People Who are
the Winners and Losers? Globalization and Culture Conflict or Convergence? Globalization and Political Change
More or Less Democracy?

Suggested Readings:
1. Contemporary Issues in Globalization. S. Sikdar. Oxford University Press; 2nd edition (2006)

2. Stiglitz. Globalization and Its Discontents. Penguin Books (2002)

3. In Defense of Globalization. JagdishBhagwati. Oxford University Press; 2nd edition (2007)

4. Economic Development. M.P. Todaro, and S.C. Smith. Pearson India; 10th edition (2011)

5. Globalization for Development. Ian Goldin, Kenneth Reinert. Rawat Books; (2006)

6. Globalization and Development. Ashwini Deshpande (ed.) Oxford University Press; 11th edition (2010)

26
CEC52102
INTERNATIONAL FINANCE
[HC: 4 Credits, 60 Contact Hours]

This course revolves around the theories and activities connected to capital account of balance of payments. It
deals with international capital transfer and the role of international financial agencies and institutions in
determining or regulating transactions in the international financial system. It will make a student comfortable
in applying for a job at foreign bank like HSBC or a global institution like IMF or pursue higher studies in
international finance and banking.
Unit 1: Departure from International Trade
a. Recapitulation of Balance of Payments
b. Financing Current Account Transactions
c. Dynamic Nature of Capital Account Transactions
i. Role of Foreign Currency Interest Rate
ii. Role of Exchange Rate
d. International Financial Markets
e. Exchange Rate Determination
f. Introduction to Currency Derivatives

Unit 2: The International Financial Environment


a. Multinational Financial Management
b. International Flow of Funds
c. International Financial Markets
d. Exchange Rate Determination
e. Currency Derivatives

Unit 3: Exchange Rate Behavior


a. Government Influence on Exchange Rates
b. International Arbitrage and Interest Rate Parity
c. Relationships among Inflation, Interest Rates, and Exchange Rates

Unit 4: Exchange Rate Risk Management


a. Forecasting Exchange Rates
b. Measuring Exposure to Exchange Rate Fluctuations
c. Managing Transaction Exposure
d. Managing Economic Exposure and Translation Exposure
References:
27
International Financial Management, Jeff Madura, Cengage, Australia, 12 Editions
International Monetary Economics, Michael Helperin, Longmans, Green and Co, London, 1st Edition

28
CEC52104
ECONOMICS OF SOCIAL ISSUES
[HC: 4 Credits, 60 Contact Hours]
Capitalism, aided by modernity and globalisation, had promised a universal solution to all the social problems
of mankind. However, with time, it has given rise to a new set of contradictions and problems that are
themselves products of this age, characterized by economic engines of growth and technology. Accordingly,
new approaches have come up to tackle these social problems related to gender, race, nature etc. This course
attempts towards such a new methodological approach towards heterogeneity and local interests, thereby
providing a critique of the capitalist notions of justice, rationality and equality.
Unit 1: Modernity and social changes
Modernity, capitalism, economic problems of poverty, unemployment and inequality growth as the solution,
from growth to development, emphasis on social indicators, human development - capability approach
Unit 2: Globalization and social changes
Beyond economic problems, multiculturalism, urbanisation, migration, social disorganisation, exclusion,
displacement, refugee problems, informalization and casualization of labour, demographic problems, population
explosion, communalism, secularism, regionalisation, casteism, child abuse, consumerism, stratification,
displacement and dislocation
Unit 3: Gender issues
Basic concepts of women studies, women studies perspectives, gender sensitive approach, gender and sex,
biological determinism, stereotyping, socialisation, patriarchy, devaluation, marginalisation, silencing, male
gaze, power politics, gender mainstreaming, gender and work, feminism, feminist research methodology,
objectivity vs. subjectivity, women right movements
Unit 4: Social justice
Idea of justice a brief chronological overview, egalitarian view, utilitarian view, Rawlsian view, Sens idea of
justice, idea of natural inequality
Unit 5: Social movements
Political sociology, power, democratic politics, fall of communism, global governance, terrorism, tribal unrests,
social movements (Naxalbari movement in India: case study)
Unit 6: Environmentalism
Beyond the anthropocene, the mutual interconstitutivity of man and nature, a brief history amd taxonomy of
environmental movements, mainstream movements and critiques, radical environmentalism, animal rights,
indigenous people

Core Readings:

1. Bauman, Zygmunt. Liquid Modernity. Wiley 2000.

29
2. Beck Ulrich, Risk Society: Towards A New Modernity, Sage Publications, 1992.
3. Breman Jan .Footloose Labour: Working in Indias Informal Economy (Contemporary South Asia)
Cambridge University Press, 1996.
4. Joseph, R. Gusfield. New Social Movements: From Ideology to Identity. Temple University Press.
2009
5. Manorama Year Book
6. Meera Nanda, Prophets Facing Backward, Permanent Black, New Delhi, 2004.
7. P.Sainath, Everybody Loves a Good Draught, Penguin, New Delhi, 2005
8. Pavan Mishra, Butter Chicken in Ludhiana, Penguin, New Delhi, 1995
9. Pushpesh, Kumar. Queering Indian Sociology A Critical Engagement CAS WORKING PAPER
SERIES Centre for the Study of Social Systems Jawaharlal Nehru University, New Delhi May 2014
CAS/WP/14-7
10. Raka Ray and Mary Fainsod Katzenstein (eds), Social Movements in India, Oxford University Press,
New Delhi, 2005.
11. Shah Ghanshyam, Social Movements and the State, Sage, New Delhi, 2002.
12. Surinder, S. Jodhka (ed), Community and Identities, Sage, New Delhi, 2001.
13. Yojna Magazines
14. Sujata Patel, Krishna Raj & Jasodhara Bagchi (eds), Thinking Social Science, Sage, New Delhi,
2002.
15. Stuart Cambridge & John Harris, Reinventing India, Oxford University Press, New Delhi, 2000
16. Romilla Thappar (ed) India Another Millenium, Viking, New Delhi, 2000
17. Josef Guglar (ed.) The Urban Transformation of the Developing World, Oxford University Press,
New York. 1996.
18. Ram Ahuja, Social Problems in India. Rawat Publications.1997.
19. Singh K.S. (ed.) Tribal Situation in India, Indian Institute of Advanced Study, Simla, 1972.
20. 1.Ahuja, Ram (2000). Social Problems in India, New Delhi: Rawat Publications.
21. 2.Deb.S. (2006).Contemporary Social Problems In India. New Delhi, Anmol.

22. 3.Bhattacharyya.S (1994). Social problems in India: issues and perspectives: Sunil Kanta
Bhattacharyya, Regency Publications.

23. 4.Dube, Leela (1997). Women and Kinship, Comparative Perspectives on Gender in South and
Southeast Asia, New Delhi: Sage Publication.
24. 5.Desai, Neera & Usha Thakkar (2007). Women in Indian Society, National Book Trust, India.
Gadgil.
25. 6.Ghosh. B. (1995). Contemporary Social Problems of India: Biswanath Ghosh, Himalaya.
26. 7.Mehta. S.R. (Ed.). (1997). Population, Poverty and Sustainable Development, Jaipur: Rawat.
27. Guha, Ramachandra. Environmentalism: A Global History. Longman World History Series. New
York: Longman, 2000.
28. Hobsbawm, E. J. The Age of Empire, 1875-1914. New York: Vintage, 1989.
29. McNeill, J. R., John Robert McNeill, and Paul Kennedy. Something New Under the Sun: An
Environmental History of the Twentieth-Century World. W. W. Norton & Company, 2001.
30. Scott, James. Seeing like a State: How Certain Schemes to Improve the Human Condition Have
Failed. New Haven: Yale University Press, 1998.

30
Suggested Readings:

1. Singh K.S. Tribal Movements in India Vol. I & II, New Delhi: Manohar Prakashan, 1982.
2. Bose, A., Nangbri, T. & Kumar, N. (eds.) Tribal demography and development in North-East India.
Delhi: B.R. 1990.
3. Furer-Haimendorf, C.V. Tribes of India: The Struggle for Survival, Delhi: OUP. 1991.
4. Mehta, P.L. Constitutional protection to Scheduled Tribes in India in retrospect and prospect, Delhi:
H.K. 1991.
5. Rao, M.S.A. Social Movements in India, Vol.I and II, Manohar, Delhi, 1978.
6. T.K.Oommen, Nation, Civil Society and Social Movements, Sage, Delhi, 2004.
7. Kancha Illiah, Why I am not a Hindu, Samya, Calcutta, 1998.
8. Guru Gopal (ed.), Atrophy in Dalit Politics, VAK, Bombay, 2005.
9. Gail Omvedt, Dalits and the Democratic Revolution, Sage, New Delhi, 1994.
10. .Beteille, Andre (1992). Backward Classes in Contemporary India, New Delhi: OUP .
11. Madhav and Ramchandra Guha (1996). Ecology and Equality: The use and Abuse of Nature in
Contemporary India, New Delhi: OUP. Gill, S.S. (1998): The Pathology of Corruption, New Delhi:
Harper Collin Publishers.
12. Lewis, Oscar (1966). Culture of Poverty. Scientific American. Vol-II and V No.IV PP-19-25. Satya
Murty.
13. T.V. (1996). Region, Religion, Caste, Gender and Culture in Contemporary India, New Delhi: OUP.

31
SOFT CORE COURSES

In the second year of the M.A program, students need to choose any ONE stream out of the three offered in this
academic session. Under each stream of specialization, they are required to study five courses, each of 4 credits.
The streams on offer are subject to availability of course instructors in a particular session.

List of Streams (offered in 2016-18):


1. APPLIED ECONOMICS
2. ECONOMICS OF PUBLIC POLICY
3. BANKING AND FINANCE

SOFT CORE 1: APPLIED ECONOMICS

Econometrics is concerned with the application of statistical theory to the analysis of economic data and the
estimation of economic relationships. Applied economics, is a specialized stream which comprises of four
papers. This course altogether intends to provide students with a thorough understanding of core techniques of
econometrics and learn how to apply them to test economic theories and quantify relevant factors for economic
policy and other decisions.
By the end of the course the students will have developed the necessary skills needed for empirical research
using modern econometrics techniques. Through their computer based assignments they will be also trained in
conducting research using primary data. The students will also deepen their other transferable skills such as
written communication, teamwork, numeracy, computer literacy, problem solving and analytical skills.

32
CEC52105
STATISTICAL INFERENCE AND ESTIMATION METHODS

[SC/ Paper A: 4 Credits, 60 Contact Hours]

This course is designed for the students to understand the statistical knowledge of applied econometrics. They
will be introduced to the concepts of estimation, Hypothesis testing, linear and non-linear estimation and
maximum likelihood estimations. Students will be introduced to the software package Stata to understand its
application in Econometrics.

Unit 1: Estimation (Point & Interval)

Introduction; point and interval estimation; Estimation of population parameters using methods of moments
and maximum likelihood procedures; properties of estimators; confidence intervals for population parameters.

Unit 2: Hypothesis Testing

Defining statistical hypotheses; distributions of test statistics; testing hypotheses related to


population parameters; Type I and Type II errors; power of a test; tests for comparing parameters from two
samples

Unit 3: Simple Linear Regression Model

Estimation of the slope and intercept parameters; inference and prediction; OLS and MLE

Unit 4: Sampling

Different types of Sampling; Principal steps in sampling; designing a questionnaire; Sample theory and
Properties; Sampling techniques.

Unit 5:Non-Linear Estimation

Introduction; Estimation of a Non-linear model; Application; Summary

Unit 6: Software Application of various techniques

Introducing Statistical packages; Stata and Eviews; Graphical exploration using Stata; Regression and other
statistical application in Stata; Summary.

33
Reference:
1. William G. Cochran, Sampling Techniques, John Wiley, 2007.
2. Jay L. Devore, Probability and Statistics; Seventh Edition;Cengage Learning, 2010
3. C Cameroon and P Trivedi, Microeconometrics Using Stata,Stata Press Publication,2009.

34
CEC52107
ADVANCED ECONOMETRIC METHODS
[SC/ Paper B: 4 Credits, 60 Contact Hours]
This course is designed to provide the fundamentals of Econometrics for a post-graduate Economic course.
Students will be introduced to fundamentals of econometrics applied to Cross-section, Time series as well as
panel data analysis. After advancing this course, students will be equipped to deal with empirical economics and
applied the techniques to a large number of Economics as well as other social science data.
Unit 1: Econometrics of Cross-Sectional Data Analysis
Classical Linear Regression Model (CLRM):Introduction; The method of ordinary least-square (OLS);
Statistical Inference; Prediction
Interval estimations; confidence interval for regression coefficients; Hypothesis testing; Analysis of Variance
(ANOVA); Applications; Summary
Multiple Regression Analysis; Estimation:Introduction; Interpretation of Multiple regression equations; OLS
and Maximum Likelihood Estimator (MLE) estimators; Applications; Summary
Dummy Variable Regression:Introduction; The nature of dummy variable; Interaction effects using dummy
variable; Regression with the combination of quantitative and qualitative regressor; Applications ; Summary.
Unit 2: Violations of the CLRM assumptions
Heteroskedasticity: Introduction; Testing for heteroskedasticity ; The method of generalized least
squares(GLS); Applications ;
Autocorrelation :Introduction; BLUE estimator in the presence of Autocorrelation; Consequence of
Autocorrelation; Detection of Autocorrelation; Correcting Autocorrelation; The method of GLS; Applications
Multicollinerity:The nature of Multicollinearity; Estimation in the presence of Multicollinearity; Detection of
Multicollinearity; Remedial measure; Applications
Unit 3: Econometrics of Time Series Analysis
The nature of Time series data; Finite sample properties of OLS; Trends and seasonality; Applications;
Stochastic Process; Unit root ; Testing for unit roots; Spurious regression; Infinite Distributed Lag models;
Cointegration and Error correction models; Forecasting; Application ; Summary
Unit 4: Pooled Data Analysis
Pooling cross sections across time; pooled cross sections; pooling characteristics; pooled data regression;
Application of Pooled data; Summary
Unit 5: Econometrics of Panel-Data Analysis
Fixed effect estimation model; Random effects estimation model; Hausman test: Fixed effect or Random effects
model; Application; Summary
Unit 6: Special Topics in Econometrics

35
Instrumental Variable Estimations:Introduction; Proxy variable vs Instrumental variable; Instrumental variable
estimation; Choice of an instrument; 2-Stage Least square methods, Applications; Summary.
Reference:
1. Jeffrey M. Wooldridge, Introductory Econometrics A Modern Approach; CENGAGE
Learning,2016

2. D.Gujarati, Basic Econometrics,C Porter and S Gunasekar; fifthedition,McGrawHill,2012.

3. William H.Green, Econometrics Analysis, Fifth Edition,Pearson,2016.

36
CEC52109
ECONOMETRIC ANALYSIS OF DATA
[SC/ Paper C: 4 Credits, 60 Contact Hours]
Econometrics analysis of Data is a course designed for the students to apply their theoretical knowledge of
econometrics in real Economic data. Students will be introduced one or two softwares will be able to apply
them in empirical economics using data.

Unit1: Learning a Basic Software like Stata


A Brief Introduction to Stata: Getting Help and Information; Running Stata; Dataset in Stata; Stata
Commands; Estimation; Graphics; Exercise

Unit 2: Data Description in Econometrics

Introduction to Data analysis; data mining and Filtering; Descriptive analysis of econometric Data;
Graphical exploration; Distributions of Econometric data; Summary.

Unit 3: Regression
Simple regression: Introduction; Modelling simple regression; Linear regression and least square principle;
Regression with graphics; Outliers,leverage and influence; Summary;

Partial regression: Interpreting multiple regression coefficients; Introduction; Multiple regression line;
partial regression and partial correlation; The t-test in multiple regression; Summary

Model selection and misspecification: Introduction; Omitted variable bias; Testing zero restriction; The use
of dummy variables; Summary;

Unit4: Regression with Cross-section Data


Heteroscedasticity: Introduction; Diagnostic test for Heteroscedasticity; Dealing with Heteroscedasticity;
Summary
Categories, counts and measurements: Introduction; egression on a categorical variable: Using dummy variable;
Multiple regression on categorical variables; Summary;
Logit transformation, modelling and regression: Introduction; The logit transformation; The linear probability
vs logit regression; Graphical analysis; Summary

Unit 5: Regression with time-series data


Trends, spurious and transformations to stationarity: Introduction; Stationarity and non-stationarity; Random
walk and spurious regression; Testing for stationarity; Transformation; Summary

Misspecification and autocorrelation: Introduction; Detecting autocorrelation; what to do about autocorrelation;


Summary;

37
Co-integration and error correction model: Introduction; What is co-integration?Testing for co-integration; The
Error correction model; Summary;

Unit 6: Applications in Multivariate Data Analysis

Introduction: Cluster Analysis; Factor Analysis; Multivariate Regression;

Reference:
1. Sophia Rabe-Hesketh and Brian Everitt ,A Handbook of Statistical Analysis Using Stata, Chapman and
Hall

2. Chandan Mukherjee, Howard White and Marc Wuyts ,Econometrics and Data Analysis for Developing
Countries , Routledge

38
CEC52106

MULTIVARIATE DATA ANALYSIS

[SC/ Paper D: 4 Credits, 60 Contact Hours]


Multivariate data analysis is a specialized branch in Econometrics and Statistics to deal with the problems in
involving multiple variables. Students will be introduced basic mathematics and statistics course as a pre-
requisite for Multivariate data analysis. Students will be introduced different concepts like Cluster Analysis,
Factor Analysis, Principal Component Analysis an Multivariate regression analysis as they advanced in the
course.
Unit 1: Introduction and Overview
Multivariate Analysis: A broad Definition and Narrow Definition; Concept of Variate; Choice of measurement
scale; Summary Notes
Unit 2: Some Basic Statistical and Mathematical concept
Univariate Data analysis; frequency distribution; Normal Distributions; Parameters and Statistics; Measurement
of variability; Note on Estimation; Characteristics of Bivariate Data; Range restriction, pearson correlation in
special cases; The Eta_Square measure; Phi coefficients; The Z` transformation; Linear regression; Statistical
Control: A first look at Multivariate Relations.Basic definitions of Matrix; Basic Matrix Operations;
Application of Matrix Algebra
Unit 3: Cluster Analysis
Methods in Cluster Analysis; Graphical Representations; Distance Matrix; Clustering Variables; Summary
Unit 4: Principle Component Analysis
Introduction; Illustration of PCA for two variables; Outline and examples of PCA; Illustrations and Further
readings; Summary
Unit 5:Factor Analysis
Introduction; Latent variable Models; Linear Single Factor model; General linear factor model; Choice of
factors; Rotations; Factor Analysis for Binary Data; Factor analysis for ordered categorical data; Further
readings; Summary
Unit 6: Regression Analysis
Introduction; Simple linear regression model; probability model of simple regression; Multiple regression;
inference; Transformation; Logistic regressions; Further readings; Summary.

Reference:
1. Ira H. Bernstein , Applied Multivariate Analysis, Springer-Verlag ,1988

39
2. David J. Bartholomew,Fiona Steele,Irini Moustaki,Jane I. Galbraith, Analysis of Multivariate Social
Science Data, Taylor and Francis,2008.
3. Alvin C. Rencher, Methods of Multivariate Analysis, Second Edition, Willey and Sons,2002.

SOFT CORE 2: ECONOMICS OF PUBLIC POLICY


Policy decisions by government officials at all levels are required to be increasingly multifaceted in the light of
resource constraints to ensure that decision-making contributes to sustainability of the development process.
Private not-for-profit and for-profit business entities also have a bearing on development-related policy
decisions. To respond effectively to these issues, civil servants and those engaged in the non-governmental
sectors, need to (1) be trained in the economics of public policy and in sophisticated methods and tools of
analysis, and (2) refresh their knowledge of the substantive development issues at hand.

Major public policy issues travel around the decision making around a) The economics of health care
provisioning and regulation of inefficiencies in health care market. b) Education: both elementary education as
merit good as well as complicated web of policy issues around higher education and c) Decision making
methodologies for optimum resource utilization, sustainable development, environmental valuation with
pollution and related environmental regulations.

The current specialization stream includes five compulsory papersto enable students to develop analytical and
critical skills relevant for understanding the challenges of public policy and its implementation. It also equips
you with skills that are essential for effective policy delivery:
1. Economics of Public Health
2. Economics of private health market
3. Economics of Education
4. Economics of Natural Resources
5. Environmental regulation and Valuation

40
CEC52111
ECONOMICS OF PUBLIC HEALTH
[SC/Paper A: 4 Credits, 60 Contact Hours]

Economics of Public Health is designed for post graduate students pursuing a career in public policy who
wish to use economic tools to improve the health of populations. The appropriate role of cost-effectiveness
and economic reasoning in the policy making process for health care, economic evaluations related to new
health interventions, services, or public health will be discussed in this course. The students should be able to
comprehend the economic theories embedded in different health policies and they should be able to design
appropriate incentives for betterment of public health.
Unit 1: Introduction
Public health and Policy; Key Economic Concepts; An Overview of the Normative Economics of the Health
Sector; Efficiency and normative frameworks - Welfare Economics Approach: The Pareto principle - Market
failure - The compensation principle - Cost-benefit analysis - Social welfare functions;

Unit 2: Health Policy: Global Measures


Millennium Development Goal and Health Care Issues; Health System in Developed nations; Health system in
developing countries; Measurements of Health: Vital statistics, Morbidity and Mortality - Burden of Diseases,
Concepts of DALY and QALY; Epidemiology and Morbidity Transition;
Unit 3: The Demand for Health and Demand for Health Care

Good Health; Health as a Form of Human Capital - Additional Factors that Affect the Investment in Health -
Understanding the Investment Aspects of the Grossman Model;
Health Care: A Normal, Superior, or Inferior Good?The Demand for Health Care - Preventive and Curative
Health care; Socio-economic determinants of health; Asymmetry of Information and Imperfect Agency -
Aggregate Demand for Health Care;

Unit 4: Healthcare Production, Costs, and Supply


The Nature of Production - Short Run Costs for a Medical Firm - Long Run Costs -The Nature of Supply - The
Estimation Of Costs: programme costs, morbidity costs, the estimation of mortality costs; The discounting of
costs and benefits; The treatment of taxes;

Unit 5: Market Failures and the Role of Government


The Perfectly Competitive Market - Pareto Efficiency - Externalities - Public Goods - Information
Imperfections -The Monopoly Model - Monopolistic Competition - Oligopoly - The Role of Government

Unit 6: Public Policy of Health Care and Govt. Regulations

41
Economics of Communicable diseases; Health care financing in Public Sector; Evaluating the Healthcare
System: Types of Economic Analyses - Assessment of an Economic Evaluation - The monetary value of health
changes: Private willingness to pay - Altruistic willingness to pay;
Concepts of Equity and Fairness in Health and Health Care; Measuring Inequality and Inequity in Health and
Health Care;
The Biopharmaceutical Industry - Drug Costs - - Market Structure - Government Regulation of the
Pharmaceutical Industry - Demand for Pharmaceuticals - Pricing Issues;

References:
1. Public and Private Social Policy: Health and Pension Policies in a New Era edited by Daniel Bland
and Brian Gran, Palgrave Macmillan, 2008.
2. Handbook of Health EconomicsVol1A edited by Anthony J. Culyer and Joseph P. Newhouse, Elsevier,
2000.
3. Essentials of Health Economics by Diane M. Dewar, Jones and Bartlett Publishers, 2010.

42
CEC52113
ECONOMICS OF PRIVATE HEALTH MARKET
[SC/Paper B: 4 Credits, 60 Contact Hours]

This course provides an introduction to the economic analysis of the health care market. The course is designed
to provide a micro-foundation of health economics. For that reasoning and tools of microeconomics are applied
to the study of health and medical care and implications for individual health behavior. Moreover, this course
will draw on models of behavior under asymmetric information, imperfect competition, agency and
optimization under uncertainty. Some of the other related issues like the functioning of hospital industry,
pharmaceutical industry, and effect of technological innovation in health care market will also be discussed.

Unit- I: An Overview of Health Economics


What is Health Economics, Why is Health Economics important, Key economic concepts related to health
economics, concept of hospital incentives and competition and physician agency.
Unit-II: Demand for Health and Health Care
Demand for Health: Health as a form of Human capital, Grossmans Investment Model of Health: Marginal
efficiency of health capital, Wage effect; Consumption Model; Factors that affect the investment in health,
Empirical evidence concerning the Grossman model.
Demand for Health Care: Health care market, Information asymmetry, Price Elasticity, Aggregate demand for
health care.
Unit-III: Health Care Production, Cost, and Supply
Production: The Healthcare Production Function, Elasticity of Input Substitution, Nature of Production.
Cost: Short run costs for a medical firm, Short-run cost curve, Long-run costs, LACC.
Supply: Factors that affect supply, Labour market for Physician, The market for Nurses.
Unit-IV: Information Economics in Private Health Market I
The Insurance Market: Demand for insurance, declining marginal utility of income, Uncertainty, Risk aversion,
Uncertainty and insurance, Comparing insurance contracts.
Moral Hazard: Problem of Moral Hazard in private health market,A graphical representation of moral hazard,
How to limit moral hazard, Evidence of moral hazard in health insurance, The tradeoff between moral hazard
and risk reduction, The upside of moral hazard.

Unit-V: Information Economics in Private Health Market II


43
Adverse selection:Akerlofs market for lemons-The intuition behind the market for lemons, a formal statement
of the Akerlof model, The adverse selection death spiral, When can the market for lemons work?
Adverse selection:the RothschildStiglitz model- The full-insurance line, The zero-profit line, The feasible
contract wedge, Finding an equilibrium, Heterogeneous risk types, Indifference curves for the robust and the
frail, Information asymmetry and the pooling equilibrium.

Unit-VI: Issues in Health Industry


The Hospital Industry: The rise and decline of the modern hospital, The relationship between hospitals and
physicians, The relationship between hospitals and other hospitals, Nonprofits and hospital production, The
relationship between hospitals and payers.
Pharmaceutical Industry: The life cycle of a drug, the uncertainty and costs of drug development, Patents,
Induced innovation, Regulation of the pharmaceutical industry, Technology and the price of health care.
Health technology assessment: Cost-effectiveness analysis, evaluating multiple treatments: the cost-
effectiveness frontier, measuring costs, measuring effectiveness, Costbenefit analysis: picking the optimal
treatment, valuing life.

Reading List:
1. Health Economics; Jay Bhattacharya, Timothy Hyde, Peter Tu; Palgrave Macmillan Press, 2014.
2. Essentials of Health Economics; Diane M. Dewar; Jones and Bartlett Publishers, 2010.
3. The Oxford Hand Book of Health Economics; Edited by Sherry Glied and Peter C. Smith; Oxford University
Press, 2011.
4. Principles of Health Economics for Developing Countries,William, Jack, World Bank Institute Development
Studies, 1999.
5. World Development Report, Investing in Health, The World Bank, 1993.
List of Journal Articles and Reports will be provided during lecture series.

44
CEC52115
ECONOMICS OF EDUCATION
[SC/Paper C: 4 Credits, 60 Contact Hours]

Objective: Education is increasingly being viewed as central to issues of development like productivity, income
distribution, employment, and knowledge as an input to production. This papercovers the interface between
economic theory and education in order to unravel how education contributes to socio-economic development.
Moving beyond the neo-classical approach, it uses alternative theoretical perspectives to analyze the linkages
between education and society. With a blend of theory and policy wide range of issues such as the relationship
between quality of education and economic growth, a critical overview of the input-output approach and human
capital theory, education as a public good the specific features of the education market, the nature of
competition in this market, and the role of the government funding, delivery, and regulation of education the
role of the public and private sectors will be covered under the domain of this paper.

Unit 1: Education and Economics: An Introduction


Three objectives of Education: Expansion, Excellence and Inclusion; Education in Economic Theory; Human
Capital Approach; Education in Growth Theory; Education in an Input-output frame- production function;
Critique to Human Capita Approach Capability, Social choice; Education as public good; and Market and
Education market failure; Policy issues and governance;
Unit 2: Human Capital Approach to Education
Developments in the theory of human capital; Rate of return Estimation, Private versus social return; General
Earning function; Wage and rate of return; Income distribution egalitarian and elite;
Unit 3: Education and Growth Theories
Technology, knowledge and growth; Solows model and technology; Endogenous growth theory; Technology,
knowledge and human capital; Technology, knowledge and Growth Linkages in Romers Model; Knowledge
in new growth theories; Human Capital - Measurement and quality;
Unit 4: Production function in Education
Production function and productivity debates in Education; Human versus Physical capital; concept of input and
output in delivery of education; University as Non-profit organization; Education production function; Teaching
Learning process concept of Efficiency and Productivity;
Unit 5: Critique of the Human Capital Theory
Education as screening device signalling in job market model; Who will invest? Investment in education
social choice approach, collective choice approach, capability approach; Human capital versus human
development Capability and capital; Critique to Sens Capability approach; critique to human capital theory
Marxian Perspective;
Unit 6: Market and Market Failure in Education

45
Market and Market failure in Higher Education; Information asymmetry, Adverse selection & Moral Hazard;
Knowledge and Market Failure; Market Failure imperfect capital market; Quasi-market for Higher Education;
features of the market; freedoms for providers; Market and equity;
Unit 7: Education and Public policy
Education as Public good; public versus private; Mode of Provisioning - Public versus private; Higher
education as public good or mixed good or merit good; primary education as merit good; Global private good;
commodification of education WTO & GATS framework; Higher education as non-merit good;
Public funding; Education Financing: Critique to Neo-liberal Ideology; Private Participation Pure private,
Public-private partnership;
New public Management: Governance Reforms; Choice of school, efficiency and quality; Quality Assurance
Mechanism; Indian Education system; Question of Autonomy; Globalization and Higher Education Market;

Text:
1. Saumen Chattopadhyay (2012): Education and Economics: Disciplinary Evolution and Policy
Discourse, OUP.
Reference:
2. Gruber J. (2011): Public Finance and Public. Worth publishers

3. Annual Report of Department of School Education & Literacy Department of Higher


Education,Ministry of Human Resource Development. Govt. of India, (Most current) http://mhrd.gov.in

46
CEC52110
ECONOMICS OF NATURAL RESOURCES
[SC/Paper D: 4 Credits, 60 Contact Hours]

This course is designed to introduce post-graduate economics students to the policy issues around natural
resources. Natural resources being scarce lead to core economic questions regarding the optimal rate of
extraction. On the other hand, how discovery of new resource bases change the pricing and usage of one
resource comes under the domain of resource economics. Finally the course also introduces ecosystem approach
to economics which essentially deals with the problem of irreversibility of the eco-system challenging the linear
approaches of economic instruments.

Unit 1: Conceptual Framework


Economics, Ethics and the Environment; Ecological Economics and the Material Balance Approach;
Environmental Economics and the Economics of Environment;Introduction to Resource Economics:
Elementary Capital Theory- The maximum Principle of optimal control Theory
Unit 2: Economics of Exhaustible Resources
A simple 2-period framework and the concept of Backstop; Extension to Dynamic Model of Mining with
modified Hotellings Rule; Depletion & Discovery under alternative market structures;
Unit 3: Economics of Renewable Resource
Forestry: Single versus Multiple use Forest- Optimal Rotation and Faustmans Rule; Fishery: The concept of
Maximum Sustainable Yield (MSY), Optimization under alternative fishery management regimes-open access
solutions, Fishery and fish biodiversity, Mangrove-fishery linkages, Basic ideas of the theory of aquaculture
shrimp farming;
Unit 4: Common Property Resources
Poverty and Environmental Degradation; Community Management of Common Property Resources;
Coordination Failure- Increasing Returns, Free-riding Problem (Assurance Game and Prisoners Dilemma);
Community Institutions: Case Studies;
Unit 5: Ecosystem Management and Sustainable Development
Systems Approach; Linear vs. holistic thinking; Ecological Process; Traditional Knowledge in Ecosystem
Management; Ecosystem Restoration; Case studies; Irreversibility, Uncertainty and Economic Development;
Need for studying the economics of sustainable development; meaning of sustainable development
Comparison with static and dynamic economic efficiency; Weak versus strong sustainability;
Unit 6: Measuring Sustainable Development
Environmental Kuznets Curve; Environmental Accounting: Basic Theory; Environmentally adjusted national
product; Green Accounting

47
References:
1. Dasgupta, P (1982): The Control of Resources, HUP.
2. Hanley, N., J.F. Shogren, and B. White, Environmental Economics: In Theory and Practice, Oxford
University Press, 2006.
3. Bhattacharya, R.N. (2001), Environmental Economics An Indian Perspective, Oxford University
Press, Delhi.
4. Perman, Ma, MacGilvray and Common (2003) Natural Resource and Environmental Economics, 4/e,
Prentice Hall.
5. Baland&Platteau (2003): Economics of Common Property Management Regimes in Mler& Vincent
(eds.) Handbook of Environmental Economics, Vol 1, North-Holland.

48
CEC52112
ENVIRONMENTAL REGULATION AND VALUATION
[SC/Paper C: 4 Credits, 60 Contact Hours]
This course is designed to address environmental problems from the perspective of economics. Designing
economic instruments for regulation of environmental problems as well valuation of environmental services are
major two focus of this course. In addition to that, global climate change issues along with their macroeconomic
policy impact will be addressed in this course.
Unit 1: Environmental Regulation
Environmental Pollution as a Public Bad; Externality (Pigou), Property Rights (Coase), Optimal Pollution;
Pollution Control: Alternative Market Based Instruments Pure policies (Emission Fees, Standard setting, and
Tradable Pollution Permits), Hybrid instruments (two-part tariff), Double Dividend Hypothesis, and Illicit
Dumping; Case Studies;
Unit 2: Introduction: Concept of Value
Measuring values, benefits and costs overview; total value use and non-use values of goods; Total
Economic Valuation; Resource evaluation and public policy; measuring demand for environmental goods
consumer surplus, compensating and equivalent surplus,
Unit 3: Environmental Valuation: Production Function Approach
Household Production Function Approach to Economic Valuation; Environmental valuation from market
information including prices dose response function, productivity change method, substitution cost method,
illness costs, human capital; applications
Unit 4: Environmental Valuation: Revealed preference Approach:
Revealed Preference Approach to Economic Valuation basic theory; Hedonic pricing method property
market and labor market; travel cost method individual model and zonal model; Statistical Value of Life;
Unit 5: Environmental Valuation: Stated Preference Approach:
Hypothetical Market and Contingent Valuation Method; Contingent valuation method bias, experimental
markets; choice modeling choice experiment, contingent comparison, contingent scoring, pair comparison;
applications; Experimental Market
Unit 6: Climate Change Policy Mitigation& Adaptation
Efficiency, public goods, externalities; environmental policy instruments emissions trading, carbon tax,
emission trading versus tax; stock pollutants and discounting; decisions under risk and uncertainty;Climate
change impact assessment applications for agriculture, sea level rise and health; vulnerability assessment;
economics of adaptation; measurement of adaptation cost; issues in financing adaptation; case studies;

References:
1. Bhattacharya, R.N. (2001), Environmental Economics An Indian Perspective, Oxford University
Press, Delhi.
2. Kadekodi , G. (2004): Environmental Economics in Practice: Case Studies from India, OUP.
49
3. Pearce, D.W. and Turner. R.K.(1991) : Economics of Natural Resource and Environment, Harvester-
Wheatsheaf.
4. Baumol& Oates (1988): Theory of Environmental Policy (2/e), CUP
5. Murty, M.N. (2009), Environment, Sustainable Development, and Well-being: Valuation, Taxes and
Incentives, Oxford University Press, Delhi.
6. Hanley, N., J.F. Shogren, and B. White, Environmental Economics: In Theory and Practice, Oxford
University Press, 2006.
Bhattacharya, R.N. (2001), Environmental Economics An Indian Perspective, Oxford University Press, Delhi.

50
SOFT CORE 3: BANKING AND FINANCE

Financial Economics deals with the fascinating world of pricing, interest rates and shares and how rational (or
even irrational!) decisions affect them. Financial Economics, is dedicated to the training of economists capable
of operating at international institutions or central government level in both the financial and economic sphere.
The students will explore the global role of these financial systems in modern economics and learn to analyse
the impact of economic events on financial markets.
Students will receive advanced training on quantitative methodologies and tools suitable to interpret and analyse
the economic and financial phenomena and to operate directly on financial markets or in international economic
institutions. The study program is designed to provide the students with solid background through the
development of topics of economic theory, analysis of financial markets, techniques of security valuation, how
to manage portfolio, and finally the knowhow of dealing with financial data in real world.
At the end of the course, they will become a proficient user of financial software and complex data sources
which will enable them to better understand the impact and reach of economic decisions. This course will
prepare students for specialist quantitatively orientated careers in financial economics, research and forecasting,
as well as those in the areas of business management, finance, banking and accountancy.

51
CEC52117
FINANCIAL INSTITUTIONS AND MARKET
[SC/Paper A: 4 Credits, 60 Contact Hours]

This course will help the learner know


wide array of financial securities now available for investing,
response of each security to the need the issuers as well as investors, and
rules and regulations regarding these securities and the regulatory agencies.
To be able from operational perspectives to examine and understand the way out of
a) the anomalies in working of the financial system and
b) failure in regulation.
such that if the learner wants to join a financial firm or pursue higher studies on finance, she feels comfortable
and sound.

Module 1: Concepts and Roles of Financial Markets


Concepts of Financial Markets, Concept of Financial Institutions, Banks vs. non-banking financial companies,
Relationship among Economic System, Financial System and Financial Market, Participants in Financial
Markets, Role of Financial markets in Investor Protection, Role of Financial in Risk Mediation

MODULE 2: Capital Market


Introduction to the Capital Market, Primary and Secondary Capital market, Capital Market Instruments, Capital
Market Intermediaries, Options, Futures, Derivatives, Emerging trends in capital market: Domestic and
International

MODULE 3: Money Market


Products and Participants in Money Market, Banks Role in Money Market, Money Instruments as Monetary
Policy Tools, Risks in Money Market

MODULE 4: Regulatory Institutions


Approaches to Regulatory Architecture, SEBI, IRDA: Jurisdictional Conflict over ULIP, RBI, SCRA, PFRDA,
Other regulators, Conflict of jurisdiction between different regulations

References
Bert Scholtens and Dick van Wensveen (2003) The Theory of Financial Intermediation, The European
Money and Finance Forum Vienna, pp 3-43

52
Frank Fabbozi (2008) Handbook of Finance, Volume I, Wiley and Sons, Chapters 1-17, 27-31, 64-66,
Fredrick Mishkin and Stanley Eakins (2012) Financial Markets and Institutions, Chapters 3-6, 11-18,
23-24

53
CEC52119
PRINCIPLES OF MODERN BANKING
[SC/Paper B: 4 Credits, 60 Contact Hours]
This course discusses operations of the commercial banks with focus on India. In so doing, it aims to acquaint
the students with market practices and also with research on functional areas of the commercial banks such that
they feel at home while applying to a bank for job.

MODULE 1: Introduction
Concept of Bank
Types of Banks
Concept and Example of Commercial Bank
Concept and Example of Cooperative Bank
Concept and Example of Rural Regional Bank
Concept and Example of Private Bank
Concept and Example of Investment Bank
Concept and Example of Central Bank
Concept and Example of Non-Bank Financial company
Concept and Example of Bank Conglomerate

MODULE 2: Main banking businesses: deposits and loans


Introduction to Banking Business
Types of Deposits
Rules for Opening and Operating Deposit Accounts
Pricing of Deposits Deposit Insurance
Types of Loans KYC Norms for Loan Accounts
Pricing of Loans
Project Finance
Credit Appraisal, Approval and Monitoring

MODULE 3: Bank Regulation and Supervision


Concept of Regulation
Reserve Bank of India
Basel Committee
Federal Reserve System of USA

54
Financial Services Authority of UK
European Central Bank
Concept of Financial Crisis as Failure of Regulation

MODULE 4: Bank risk management in lending & operations


Concept of Risk facing Banks
Concept of Credit Risk
Measure of Credit Risk
Management of Credit Risk
Concept of Operational Risk
Measure of Operational Risk
Management of Operational Risk

References:
Saunders A and M M Cornett, (2008). Financial Institutions Management A Risk Management
Approach, Boston: McGraw-Hill, Chapters 7, 11, 12 and 16.
Wong Michael C. S. (Ed.), The Risk of Investment Products: From Product Innovation to Risk
Compliance, WSPC USA, 2011
Hull John C, Options, Futures and Other Derivatives, Prentice Hall, New Delhi, 2000

55
CEC52121
CORPORATE FINANCE
[SC/Paper C: 4 Credits, 60 Contact Hours]
The course aims at providing understanding of capital budgeting techniques, the advantages of using Net
Present Value versus Internal Rate of Return to calculate the value of financing decisions or projects, when and
how to use payback periods and risk analysis to rank financing decisions, identify the formulas for calculating
cash flows resulting from investments and their use to determine the profitability of a financing decision or
project for a business.
In terms of corporate finance best practices, students will also learn about the financial and strategic basis for
financing decisions, various public and private techniques and products available for both short term and long
term financing, techniques for cash flow management, forecasting and planning, and best practices of cash flow
management as it applies to real life examples.
Unit 1: Introduction
Finance Managers Role Separation of Ownership and Management Objectives of the Firm and Corporate
Governance Financial Statements and Cash Flow Financial Statements Analysis.
Unit 2: Working Capital Management
Working Capital Components Leverage Cash management Receivables Management Inventory
Management Financing Current Assets Regulation of Bank Finance.
Unit 3: Capital Budgeting
Measures of Investment - Choice Investment and Financing Decisions Time Value of Money Net Present
Value Internal Rate of Return Discounted Payback Period Cost of Capital Selection of Criteria Risk,
Return and Opportunity Cost of Capital Valuation of Bonds and Common Stock Scenario Testing and
Sensitivity Analysis Strategy V Investments Practical Problems in Budgeting Agency, Compensation and
Performance Measure.
Unit 4: Patterns of Financing
Internal Funds Common Stock Debt Financial Markets/Institutions Issue of securities Venture Capital
Initial Public Offering Security Sales and Auctions Private Placements and Public Issue Junk Bonds.
Unit 5: Capital Structure & Financing of Long Term Capital
Planning Capital Structure Capital Structure Choice Extended Probabilistic Analysis Dividend Payout
Policies Share Valuation Sources of Long Term Capital Debt Securities Debt Policy and Leverage Risk
Management.
Unit 6: Use of Derivatives and Corporate Finance
Options and Corporate Finance Options and Corporate Finance: Extensions and Applications Warrants and
Convertibles Derivatives and Hedging Risk.

56
Readings:
1. Brealey, R.A., Myers, S.C. and Allen, F. (2014). Principles of Corporate Finance, 11thEd, McGrawHill.

2. Damodaran, Aswath. (2007). Corporate Finance Theory and Practice, 2ne Edition, Wiley.

3. Ross, Westerfield, Jaffe, Kakan. (2014). Corporate Finance, 10th Edition, McGraw Hill.

57
CEC52114
PRINCIPLES OF INVESTMENT BANKING
[SC/Paper D: 4 Credits, 60 Contact Hours]

This course is complementary to the course Principles of Modern Banking. While a bank operates in the
financial market primarily as proprietary trader and investor, an investment operates in the financial market
largely on behalf of the client. Worldwide the investment banks engage in investment banking, principal
transactions, asset management and securities services. In order to maximize revenue or profit amidst stringent
regulation, the banks create conglomerates or banking groups where an investment bank as a subsidiary member
of the conglomerate helps maximization of group benefits. In order to protect public trust a regulator often
restricts a bank to deal with complex securities using the deposits but such restrictions may not apply to an
investment bank.

Unit 1: Definition, Evolution and Types of Investment Banks


Glass Steagall Act of 1933
Gramm-Leach-Bliley Act of 1999
Financial Holding Companies
Full Services Investment Bank

Unit 2: Introduction Boutique Houses


What is a Boutique House?
Activities of Sandler ONeill
Activities of Greenhill
Activities of Lazard
Activities of Houlihan Lokey

Unit 3: Activities of Full Services Investment Banks


Merger and Acquisition Advisory Services
Underwriting Activities
Valuation Services
Financial Restructuring
Fairness Opinion

Unit 4: Trading, Principal Investment and Asset Management


Approaches to Trading
Principal Investments
Merchant Banking
Private Equity
Asset Management
58
Financial Engineering
Prime Brokerage

Reference:

Handbook of Finance, Volume I, Frank Fabbozi (Ed.), John Wiley & Sons, Hoboken 2008

59
CEC52116
SECURITY ANALYSIS AND PORTFOLIO MANAGEMENT
[SC/Paper E: 4 Credits, 60 Contact Hours]
Unit 1: Understanding Investments
Investment Environment: Investment Objectives and Constraints Markets and Instruments Trading of
Securities, Mutual Funds and Collective Investment Vehicles
Risk and Return: Measures of Return and Risk Calculating the Mean Historical Returns Expected Rate of
Return Measuring the Risk of Expected Returns Determinants of Required Rate of Return The Risk Free
rate Risk Premium Financial Premium
Unit 2: Valuation of Investments
Fixed Income Instruments: Bond Returns and Prices Systematic and Unsystematic Risk involved in Fixed
Income Securities Present Value Model and Bond Valuation.
Equity Shares: Dividend Discount Models Free Cash Flow to Equity Discount Models Free Cash Flow to
the Firm Cost of Capital Approach Firm Valuation Estimating Equity Value per Share.
Unit 3: Security Analysis
Economic Analysis Economic Forecasting and Stock Investment Decision Forecasting Techniques
Industry Analysis Industry Life Cycle Structural Analysis Techniques for Evaluating Relevant Industry
Factors Sources of Information for Industry Analysis and Company Analysis Analysis of Financial
Statements.
Unit 4: Introduction to Portfolio Analysis
Characteristics of Opportunity Set Decision under Certainty Characteristics of Portfolio Diversification
Risk and Return Characteristics Minimum Variance Portfolio Efficient Frontier
Unit 5: Portfolio Analysis
Single Index Model Beta Estimation and Forecasting Portfolio Optimization Markowitz Risk Return
Optimization Sharpes Optimization Lintners Method of Short Sales
Unit 6: Models of Equilibrium in Capital Markets
Standard Capital Asset Pricing Model Non-standard CAPM Empirical tests Arbitrage Pricing Theory
Fama- French Three Factor Model.

60
CEC52718
DISSERTATION II
[MDS: 4 Credits, 60 Contact Hours]
This is a sequel to Dissertation I of first year. Students who have already started their work in second semester,
will submit their final report on dissertation during this semester. The students will work on data collection,
analysis, dissertation writing under the supervision of any faculty member.

61
ECONOMICS
TIME TABLE
TIME TABLE FOR BA/B.Sc. ECONOMICS Semester I*

9.30-10.30 10.30-11.30 11.30-12.30 12.30- 1.30-2.30 2.30-3.30 3.30-4.30 4.30-5.30


1.30
MONDAY Basic English Principles of Introductory ELECTIVES Principles of Professional
Mathematics Language Accounting [PM, Microeconomics Human Studies
[B-II] [B-I ] B-I] [SB , B-I ] Resource
Management
[SP, B-I ]
TUESDAY Principles of Basic ELECTIVES Introductory English ELECTIVES Professional
Accounting Mathematics L Microeconomics Language Studies
[PM, B-I ] [B-II] [SB , B-I ] [B-I]
WEDNESDAY ELECTIVES ELECTIVES Basic Introductory Principles of Foreign Language/
Mathematics U Microeconomics Human Communicative English
[B-II] [SB , B-I ] Resource
Management
N [SP, B-I]
THURSDAY Principles of Basic ELECTIVES Introductory English Professional
Human Mathematics Microeconomics Language Studies
Resource [B-II] C [SB , B-I ] [B-I]
Management
[SP, B-I]
FRIDAY Principles of ELECTIVES Introductory H ELECTIVES ELECTIVES Basic Professional
Accounting Microeconomics Mathematics Studies
[PM, B-I ] [SB , B-I ] [B-II]
SATURDAY Basic Introductory Test
Mathematics Microeconomics
[B-II] [SB , B-I ]
Test/Tutorial Test/Tutorial
* in process

PM: CA PAthik Mitra, SB: Mr. Samyo Basu


Course Codes

Code Course
CEC31101 INTRODUCTORY MICROECONOMICS

CEC31103 BASIC MATHEMATICS

CCO311101 PRINCIPLES OF ACCOUNTING


TIME TABLE FOR MA ECONOMICS Semester I*

9.30-10.30 10.30-11.30 11.30-12.30 12.30- 1.30-2.30 2.30-3.30 3.30-4.30 4.30-5.30


1.20
MONDAY Advanced History of Institutional Institutional Professional
Microeconomics Economic Economics [B-I Economics [B-I Studies
[RPD, B-I ] Thought 208] 208]
[SB, B-I]
TUESDAY History of Mathematical Mathematical Professional
Economic Economics [SM, Economics Studies
Thought [SB, B-I] L B-I] [SM, B-I]
WEDNESDAY Advanced History of Advanced Advanced Foreign Language/
Microeconomics Economic Macroeconomics Macroeconomics Communicative English
[RPD, B-I ] Thought U [ST, B-I ] [ST, B-I ]
[SB, B-I]
THURSDAY Advanced History of Advanced Professional
Microeconomics Economic Macroeconomics N Studies
[RPD, B-I ] Thought [ST, B-I ]
[SB, B-I]
FRIDAY C Advanced Professional
Microeconomics Studies
[RPD, B-I ]
SATURDAY Institutional Institutional Test H Mathematical Mathematical
Economics [B-I Economics Economics [SM, Economics [SM,
208](Guest [B-I 208] B-I] B-I]
Faculty) (Guest
Faculty)
*Room number is yet to be decided.
RPD: Prof. Rituparna Das ST: Dr. Sabyasachi Tripathi DD: Dr. Debanjana Dey
SM: Dr. Shirsendu Mukherjee SB: Mr. Samyo Basu
Code Course title Faculty
CEC51101 ADVANCED MICROECONOMICS Rituparna Das
CEC51103 ADVANCED MACROECONOMICS Sabyasachi Tripathy
CEC51105 MATHEMATICAL ECONOMICS Sabyasachi Tripathy
CEC51107 HISTORY OF ECONOMIC THOUGHT Samyo Basu
CEC51109 INSTITUTIONAL ECONOMICS Shirsendu Mukherjee

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