CHRIST UNIVERSITY HOSUR ROAD, BANGALORE-29 Applied Economics... · CHRIST UNIVERSITY HOSUR ROAD, BANGALORE-29 ... Multi-product firm; ... Product Exhaustion Theorem; Elasticity

CHRIST UNIVERSITY

HOSUR ROAD, BANGALORE-29

DEPARTMENT OF ECONOMICS

MA APPLIED ECONOMICS

2014-2016

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PHILOSOPHY AND OBJECTIVE OF THE M A APPLIED ECONOMICS

PROGRAMME

The MA Applied Economics programme of the Department of Economics in Christ University

aims to form ethically well-grounded students with the ability for incisive reasoning, deep

knowledge of economic theory and skill in empirical methodology. The course seeks to strike a

sound balance between theory and application along with an interdisciplinary dimension and

without diminishing the focus on economics. This approach is meant to help students face the

dynamic challenges in terms of the market and academics. In line with this approach the

programme has a combination of papers related to economic theory, methodology and two

streams of specialisations which, on the one hand meet the needs of corporate employment and

on the other create the ability of applying economic theory to development problems of the

country. More specifically students will be equipped to take up careers in academics, teaching,

business consulting and analytics, civil society and activist organisations, the public sector,

government services and international civil services.

The Post Graduate Course in Applied Economics will groom the students to acquire

1. A sound conceptual knowledge base necessary to fulfil the role of expert in economics

conscious of the broad issues of society and governance

2. The capability to explain basic estimators and their properties, test hypotheses, estimate

economic models, forecast, and interpret policy related data

3. Familiarity with quantitative analysis in explaining the economic theories that underlie

social policies and in applying economic theory to significant social, economic, and

political problems

4. The capacity to formulate and answer empirically any original question in the various sub

fields of economics

5. A thorough mastery of a specific area of specialization sufficient to present a specialist

profile

6. Ability to conduct a significant piece of research by evaluating existing literature and by

also collecting, interpreting, manipulating and analysing data

7. A fluency in using IT/computers to work in an advanced technological environment

8. The ability to communicate clearly in speech and writing to disseminate the research

findings to a variety of audiences including business professionals, economists, policy

makers, and the public at large

9. The ability to adapt in a professional context: flexibility and capacity for lifelong learning.

10. A practical exposure during the pursuance of the course through internship.

11. The ability to apply what has been learned in a wider context of open macro economies

12. The ability to work effectively with others in a multi-cultural environment

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COURSE STRUCTURE, MA APPLIED ECONOMICS 2014-16

SEMESTER I Course Title Hours / Week Marks Credits

MEC 131 Microeconomic theory and applications 4 100 4

MEC 132 Macroeconomic theory and policy – I 4 100 4

MEC 133 Statistics and computer applications 4 100 4

MEC 134 Economics of Growth and Development 4 100 4

MEC 135 Research Methodology for Applied

Economics

4 100 4

MEC 136 Applied Financial economics 4 100 4

TOTAL 24 24

SEMESTER II Course Title Hours / Week Marks Credits

MEC 231 New Institutional Economics 4 100 4

MEC 232 Macroeconomic theory and policy – II 4 100 4

MEC 233 Advanced Mathematical Economics 4 100 4

MEC 234 Econometrics 4 100 4

MEC 235 International Economics-Theory and Policy 4 100 4

ELECTIVES

MEC 241A Economics of Banking and Insurance 3 100 3

MEC 241B Economics of Planning 3 100 3

TOTAL 23 23

SEMESTER III Course Title Hours / Week Marks Credits

MEC 331 Public Finance and Policy 4 100 4

MEC 332 Applied Econometrics 4 100 4

MEC 333 Agricultural Economics 4 100 4

MEC 334 Health Economics – Theory and Practice 4 100 4

MEC 335 Political Economy of India 4 100 4

MEC 356 Internship* 50 2

ELECTIVES

MEC 341A Security Analysis & Portfo lio Management 3 100 3

MEC 341B Economics of Inclusive Development 3 100 3

TOTAL 23 25

SEMESTER IV Course Title Hours / Week Marks Credits

MEC 431 Operations Research 4 100 4

MEC 432 Economics of Labour Markets 4 100 4

MEC 433 Economics of Industrial Organizat ion 4 100 4

MEC 434 Environment and Resource Economics 4 100 4

MEC 435 Dissertation 100 4

ELECTIVES

MEC 441A International Finance 3 100 3

MEC 441B Regional and Urban Economics 3 100 3

TOTAL 19 23

*Internship is to be completed in the months of April and May following Semester II of the

Programme

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SEMESTER I

MICROECONOMIC THEORY AND APPLICATIONS

MEC 131

Objectives: 60 Hrs

The main objective of the paper is to introduce both traditional and as well as modern ideas and theoretical concepts in micro economics. Another important objective is to provide a

fundamental understanding of market theory, theory of factor pricing, theory of general equilibrium and welfare economics.

Module 1: Demand Analysis 12 Hrs Basic Economic Problem — Choice and Scarcity; Deductive and Inductive Methods of Analysis;

Positive and Normative Economics; Economic Models; Characteristics of Equilibrium and Disequilibrium Systems, Elasticities (price, cross, income) of demand — theoretical aspects and

empirical estimation; elasticity of supply; Theories of demand — utility; indifference curve (income and substitution effects, Slutsky theorem, compensated demand curve) and their applications; Revealed preference theory; Linear Expenditure System; Indirect utility functions

(duality theory); Consumer‘s surplus;

Module 2: Theory of Production and Costs 10 Hrs

Production function — short period and long period; law of variable proportions and returns to scale; Isoquants — Least cost combination of inputs; Returns to factors; Economies of scale;

Multi-product firm; Elasticity of substitution; Euler‘s theorem; Technical progress and production function; Cobb-Douglas, CES, VES and Translog production functions and their

properties; Empirical work on production functions; Traditional and modern theories of costs —Derivation of cost functions from production functions; derived demand for factors.

Module 3: Price and Output Determination 15 Hrs

Marginal analysis as an approach to price and output determination: perfect competition — short

run and long run equilibrium of the firm and industry, price and output determination, supply curve; Monopoly — short run and long run equilibrium, price discrimination, welfare aspects, monopoly control and regulation; Monopolistic competition — general and Chamberlin

approaches to equilibrium, equilibrium of the firm and the group with product differentiation and selling costs, excess capacity under monopolistic and imperfect competition, criticism of

monopolistic competition; Oligopoly — Non-collusive (Cournot, Bertrand, Edgeworth, Chamberlin, kinked demand curve and Stackelberg‘s solution) and collusive (Cartels and mergers, price leadership and basing point price system) models; Price and output determination

under monopsony and bilateral monopoly;

Module 5: Distribution 07 Hrs

Neo-classical approach — Marginal productivity theory; Product Exhaustion Theorem; Elasticity of technical substitution, technical progress and factor shares; Theory of distribution in imperfect

product and factor markets;

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Module 6: General Equilibrium 08 Hrs

Partial and general equilibrium; Walrasian excess demand and input-output approaches to

general equilibrium, existence, stability and uniqueness of equilibrium and general equilibrium, coalitions and monopolies;

Module 7: Welfare Economics 08 Hrs

Pigovian welfare economics; Pareto optimal conditions; Edgeworth Box; Value judgement;

Social welfare function; Compensation principle; Inability to obtain optimum welfare — Imperfections, market failure, decreasing costs, uncertainty and non-existent and incomplete

markets; Theory of Second Best — Arrow‘s impossibility theorem; References:

1. Pindyck & Rubinfeld, Micro Economics, Prentice Hall, India. 2. Koutsoyiannis, Modern Micro Economics, ELBS, Macmillan.

3. Hal R Varian, Intermediate Micro Economics – A Modern Approach, (3rd Ed) Affiliated East West Press.

4. Chauhan S P S, Microeconomics – An Advanced Treatise, PHI Learning Private Limited,

New Delhi, 2009. 5. H L Ahuja Advanced Economic Theory – Microeconomic Analysis, S. Chand.

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MACROECONOMIC THEORY AND POLICY - I

MEC 132

Objectives: 60 Hrs

This paper aims at strengthening the knowledge of important macroeconomic variables and their role in determining the equilibrium level of output and employment and provides insights into

factors influencing the capital inflows and outflows in an open economy model. It helps the students to understand the theoretical foundation of macroeconomics and the contribution of

different schools of thought to the further development of macroeconomics. The students will be able to critically evaluate the consequences of basic macroeconomic policy options under differing economic conditions.

UNIT 1: Introduction to Macroeconomics 09 Hrs

The development of macroeconomics- Actual and potential output-GNP identity on the product, income and disposition side-The government sector and foreign sector-The saving investment

balance-Planned and realized investment-The tax, consumption and saving function-Determination of equilibrium income-Derivation of the expenditure multiplier.

UNIT 2: Demand side and Supply side Equilibrium 15 Hrs

Real and monetary theories of the rate of interest-Liquidity preference and loanable funds

theories of interest- The term structure of interest rates: Pure Expectations Theory-Pure segmentation theory-Equilibrium income and the interest rate determination in the product market- Equilibrium income and the interest rate determination in the money market- Derivation

of IS and LM curves-Shift in IS and LM curves-Simultaneous equilibrium-The Taylor Rule and the TR Curve-Fiscal and monetary policy effects on demand-Interaction of monetary and fiscal

policies-Equilibrium in the labour market-Aggregate supply in the short run and long run-Supply side disturbances and reactions-Demand side disturbances and reactions-Determination of equilibrium income, employment, rate of interest and price level.

UNIT 3: Consumption, Saving and Investment 13 Hrs

Cross sections, Cycles and Trends- Keynes and the consumption function-Life cycle hypothesis-Absolute income hypothesis, Permanent income hypothesis- Robert Hall and Random Walk Hypothesis- Choice structure and disequilibrium-The MPS model-The wealth effect in the static

model-The present value criterion for investment-The marginal efficiency of investment-Investment demand and output growth-The accelerator principle and stabilization policy-Lags in

investment demand-Stability and slope of the IS curve.

UNIT 4: Monetary and Fiscal Policy 10 Hrs

The instruments of monetary policy-The mechanism of monetary expansion- money growth

targeting and inflation targeting -The effects of fiscal policy changes-Three ranges of LM curve-The effectiveness of monetary and fiscal policy: Monetarists and Fiscalists-Tax rate changes and the budget deficit-Fiscal stimulus and deficit financing- macroeconomic policies in advanced and

emerging economies.

UNIT 5: The External Sector Equilibrium 13 Hrs

The current account and product market equilibrium-The capital account and balance of payments equilibrium-Balance of payment adjustment and the LM curve-Balance of payment

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adjustment policy with fixed and flexible exchange rates-The domestic economy as a price taker-The Reappraisal model of the foundations of macroeconomics-Microeconomic foundations for

the Reappraisal model-The complete model-The model in a small open economy-The importance of time and the future-Comparative statics, Multipliers and Dynamics.

Course Text:

William.H.Branson (2005). Macroeconomic Theory and Policy, Third Edition, All India

Traveller Book Seller Publishers, New Delhi.

References: 1. N. Gregory Mankiw. (2012). Macroeconomics. 8

th Edition, Worth Publishers.

2. Dornbusch, Fischer, Startz. (2010). Macroeconomics. 11th

Edition, Tata Mc Graw Hill.

3. Graeme Chamberline & Linda Yueh (2006). Thomson Learning.

4. Burda and Wyplosz (2009). Macroeconomics: A European Text, Fifth Edition, Oxford

University Press, New York.

5. M. Maria John Kennedy (2011). Macroeconomic Theory, PHI Learning Private Limited,

New Delhi.

6. H.L.Ahuja. (2012). Macroeconomics:Theory and Policy. 18th

Revised Edition, Sultan Chand

Publishers.

7. D.N. Dwivedi. (2005). Macroeconomics:Theory and Policy. 2nd

Edition, Tata Mc Graw Hill

Education.

8. Levacic and Rebman. (1982). Macro Economics:An Introduction to Keynesian and Neo-

Classical Controversies. 2nd

Edition, Macmillan Publishers.

9. Brain Snowdown, Howard Vane and Peter Wynarczyk. (1995). A Modern Guide to Macro

Economics: An Introduction to Competing School of Thought, Edward Elgar Publishing.

10. Edward Shapiro. (2011). Macroeconomic Analysis. 5th Edition, Galgotia Publication Ltd.

11. Ackley.G. (1978). Macroeconomics: Theory and Policy, Macmillan, NewYork.

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STATISTICS AND COMPUTER APPLICATIONS

MEC 133

Objectives: 60 Hrs

The objective of the paper is to make students familiar with theory and application of statistical

methods. This course covers the statistical foundations of data analysis including the statistical theory and its applications in Economics. In particular, this module broadly covers the

descriptive statistics, theory of probability, statistical distributions, estimation and hypothesis testing, and non-parametric tests. The specific objectives are as follows: 1. Emphasis is on application (including analysis and interpretation) rather than theoretical

derivations. The idea is to impart training on how to make an argument with data

2. To provide an understanding of the concepts and methods of Statistics, for application in

data analysis

3. To get statistical skill required for the analysis of socio-economic data

4. To provide hands-on training in data analysis (along with computer applications)

UNIT1: Descriptive Statistics 05 Hrs

Mean, Median, Mode, Geometric Mean and Harmonic Mean-Partition Values-Measures of

Dispersion –Absolute and Relative Measures of Dispersion, Mean Deviation, Standard

Deviation, Coefficient of Variation, Lorenze Curve, Moments, Skewness and Kurtosis-

SPSS,EXCEL Applications

UNIT2: Probability Theory 15 Hrs

Concept of probability-conditional probability and Bayes‘ theorem, random variables – discrete

and continuous, density and distribution functions, joint, marginal and conditional distribution,

moment generating function, law of large numbers and Central Limit theorem-Theory of

Distribution -Discrete versus continuous distribution, uniform, binomial, negative binomial,

Poisson, geometric and hyper-geometric, normal, log-normal, exponential, gamma and beta

distribution, characteristic function -Sampling Methods and Sampling distributions Simple

random sampling: with and without replacement, stratified random sampling, probability and

non-probability sampling, statistic and sample moments, sampling distributions: Student‘s-t,

Chi-square and F-distribution, determinants of sample size - SPSS,EXCEL Applications

UNIT3: Theory of Estimation 10 Hrs

Point and interval estimation, properties of good estimators: Unbiasedness, consistency,

efficiency, different methods of estimation, maximum likelihood and method of moment

estimation, properties of maximum likelihood and method of moment estimators, confidence

interval for unknown parameters - SPSS,EXCEL Applications

UNIT4: Hypothesis Testing 15 Hrs

Statistical hypothesis, simple versus composite hypothesis, critical region, types and size of error

– type-I and type-II error, power of a test, Neyman-Pearson lemma, trinity of classical tests

(Wald test, Lagrange multiplier, likelihood ratio), application of hypothesis testing with known

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and unknown variances, Chi-square test for testing independence of two-classification criteria,

test for correlation Parametric and Non parametric tests ANOVA Interactional effects

Multivariate Analysis of variance (MANOVA) Analysis of covariance (MANCOVA) Non-

parametric Tests Chi- square test Test of goodness of fit Kolmograv Smirnov Test- Krushal

wallis test of one way ANOVA Mann Whitney U test- Sign test- kendall s coeffeceints of

concordance - Turkey s HSD tests Duncan s Multi-range test Friedman two analysis-


UNIT 5: Correlation and Regression 10 Hrs

Correlation Analysis: Meaning - Types of correlation - Methods of studying correlation: Scatter

diagram method, Graphic method, Karl Pearsons co-efficient of correlation, Rank method,

Concurrent deviation method, and Method of least squares- The Coefficient of Determination-

Testing the Significance of the Correlation Coefficient-Partial and multiple correlations

Regression Analysis - Least Squares Principle- The Standard Error of Estimate- Assumptions

Underlying Linear Regression-Multiple regression- Index Numbers: meaning and importance –

problems in the construction of index numbers – Types of index numbers: price index – quantity

index – value index – construction of price index numbers: unweighted and weighted indices –

construction of quantity and value indices - tests of adequacy of index number formulae –

deflating; Consumer Price Index Number: meaning and uses – problems in the construction of

cost of living index number – methods of constructing cost of living index: aggregate

expenditure and family budget methods – limitations of index numbers- software Applications-


UNIT 6: Time Series Analysis 05 Hrs

Concept and components – Trend Projection – Moving Averages method-Least square method-

construction of Seasonal indices- Index Numbers – concept – price, quantity and value relations

– Laspeyer‗s, Paasche‗s and Fisher‗s Index Numbers; Time and factor reversal tests; Problems in

construction of Index Numbers, Tests for Ideal Index Numbers- SPSS,EXCEL Applications

References:

1. Speigal. M.R.(1992), Theory and Problems of Statistics, McGraw Hill, London.

2. Monga,G.S.(1972), Mathematics and Statistics for Economists,Vikas Publications,

NewDelhi.

3. Yamane, Taro (1975), Mathematics for Economists, PHI, New Delhi.

4. Anderson, Sweeny & Williams, Statistics for Business and Economics

5. Murray S. Speigel, Statistics, Schaum Series

6. Nabendu Pal & Sahadeb Sarkar, Statistics Concepts and applications

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ECONOMICS OF GROWTH AND DEVELOPMENT

MEC 134

Objectives: 60 Hrs

The course is intended to impart a practical orientation to understanding the developmental

issues in developing countries based on theoretical foundations; the course helps to create the

skills in identifying issues of underdevelopment and generate practical solutions to them

UNIT 1: Theories of Growth and Development 12 Hrs

a) Economic Growth Theories

Neoclassical economic theory: Slow-Swan growth model and its extension; Ramsey growth

model; Empirics of neoclassical theory: Conditional and unconditional convergence; Endogenous growth theory: AK model; Romer model with knowledge spillovers and increasing returns to scale; Uzawa-Lucas model with human capital

Endogenous growth theory: Models with endogenous technological change, R&D based growth theory; Empirics of endogenous growth theory and technological change

b) Contemporary Theories of Economic Development

Dualistic development and structuralism – Lewis model, Chenery model; The balanced-growth

Nurske model; Hirschman‘s unbalanced growth model with backward and forward linkages

c) New frontiers in Theories of Economic Development

The imperfect information paradigm (Stiglitz); the new institutional economic paradigm

(Williamson); the international dependence models

UNIT 2: Poverty, Risk and Inequality 09 Hrs

Measurement of development and poverty- vulnerability and of chronic and inter-temporal poverty; concepts of welfare and well-being – contrast to Sen‘s approach; microeconomic

approaches on how economic processes lead to poverty increases or poverty reduction: poverty traps - the theory and evidence - credit market failures, risk, social norms and attitudes, and

spatial externalities. UNIT 3: Financial Flows to Developing Countries 09 Hrs

The determinants of private capital flows (FDI, bank lending, bonds and equity); and the institutional and policy issues arising from their impact on macroeconomic stability and growth;

the positive economics of aid (from whom, to whom and with what effects) and the normative economics of aid (how to allocate and deliver aid better); the relationships between these two sorts of financial flows.

UNIT 4: Rural Development 08 Hrs

Land (tenancy, shareholding, and property rights); Labour (labour markets, shadow wages, wage determination); Migration (equilibrium models, causes and consequences, risk); Credit and micro-finance (credit rationing, household credit, lending to the poor)

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UNIT 5: Industrial Policy and Technological Upgrading 09 Hrs

Industrialization, economic growth and the industrial policy debate; The experience of the East

Asian NICs: lessons and debates; Transfer of technology and role of multinational companies; Industrialisation and catch-up in the emerging economies: the BRICS and beyond; Opportunities

and constraints for industrial policy in the 21st century: internal and external dimensions

UNIT 6: Openness and Development 09 Hrs

The impact of trade and foreign investment on growth, inequality and poverty; variation in impact among countries with differing factor endowments and institutions; policy and non-policy

barriers to external economic linkages; criteria and constraints in choice of external (and related internal) economic policies; industrial policy; market access, international and private rules governing trade; and regional integration.

UNIT 7: Education and Development through Community Participation 04 Hrs

The concept of service/experiential Learning; A study of the causes, consequences and risk associated with migration for the rural illiterates; A study of the household finances of the rural Bangalore – lending to the rural poor, rural indebtedness, role of micro-finance.

(2 to 3 days rural stay where the students will understand the dimensions of rural poverty, study

the developmental projects underway in the area, propose strategies to strengthen the ongoing programmes of development or suggest remedies for the problems)

Learning Outcomes:

The students will acquire

1. a sound conceptual knowledge base necessary to fulfill the role of expert in economics

conscious of the broad issues of society

2. the capability to understand the nature of social and economic issues confronted in

developing societies

3. the skills and techniques to find solutions to the problems of development and growth

References:

1. Murphy, K.M., A. Scheifer and R. Vishny, ‗Income Distribution, Market Size and

Industrialization‘, Quarterly Journal of Economics 104(3) 1989, pp. 537–564. 2. Aghion, P. and S. Durlauf, eds. (2005) Handbook of Economic Growth, Vol. 1A. North

Holland [AD, HD75.5 .H35 2005, available at Science Direct]. 3. Banerjee, A., R. Benabou, and D. Mookherjee (2006) Understanding Poverty. Oxford

University Press. [BBM, HC79.P6 U534 2006]

4. Barro, R. and X. Sala- i-Martin (2004) Economic Growth. Second edition. MIT Press. BSM]

5. Rodrik, D. editor (2003) In Search of Prosperity: Analytic Narratives on Economic Growth Princeton University Press. [HD73 .I52 2003]

6. D. Mookherjee and D. Ray (2001) Readings in the Theory of Economic Development.

Blackwell Readings for Contemporary Economics, Blackwell Publishers [HD75 .R423 2001].

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7. Hent Diana- Economic theories of Development- An analysis of competing paradigm 8. J. Behrman and T. N. Srinivasan (Eds)- Handbook of Development Economics Elsevier

1995 9. Bardhan Pranab and Christopher Udry- Development Micro Economics. Oxford

University press. 2000. New York 10. Nafziger- Economics of Developing countries. Prentice Hall 1997 11. Michael Todaro, Economic Development, Addison-Wesley, Reading, New York &

London, Seventh Edition (2000). 12. Gerald Mayer, Leading Issues in Economic Development, Oxford University Press,

Oxford (1995). 13. David Colman, Frederick Nixson, Economics of Change in Less Developed Countries,

Harvester Wheatsheaf, London, Third Edition (1994).

14. Debraj Ray, Development Economics, Princeton University Press, Princeton, New Jersey (1998).

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RESEARCH METHODOLOGY FOR APPLIED ECONOMICS

MEC 135

Objectives: 60 Hrs

Understanding of the importance of research in creating and extending the knowledgebase of

their subject area; Ability to distinguish between the strengths and limitations of different

research approaches regarding their subject/research area; Knowledge of the range of

qualitative and quantitative research methods potentially available to them; The ability to

differentiate between the role of practitioners and the role of researchers; An understanding of

and begin to critically reflect upon issues of ethics and role of the researcher; The skills to work

independently, to plan and to carry out a small-scale research project.

UNIT 1: Introduction to research & research methods 10 Hrs

Ways of knowing and understanding the world and the research process - The nature of

knowledge and theory - Philosophy of Social Science Research - Relevance of Social Science Research - Objectivity and Values in Social Sciences

UNIT 2: Logic of Scientific Investigation 05 Hrs

Theory Construction in Social Science Research - Approaches to Social Science and Managerial

Research, Theoretical, Applied and Action Research - Ethical Issues in Research on Human or Social Subjects - Non-sexist approach in Social Sciences

UNIT 3: Research Design 15 Hrs

Review of Literature - Identification of Research Gaps and Research Needs - Identification,

selection and formulation of research problem - Formulating Hypotheses/Propositions/Issues, conceptualizing research problem

UNIT 4: Overview of Social Science Methodology 10 Hrs

Uni-disciplinary, inter-disciplinary, multi-disciplinary methodologies - Quantitative Research

Methods: An Overview - Qualitative Research Methods: An Overview - Historical Method - Case Study Method - Action Research - Monitoring and Evaluation - Triangulation (including/mixing Qualitative and Quantitative) Methods

UNIT 5: Information needs and use in social sciences 10 Hrs

Secondary Sources of Information: Using and Integrating secondary and primary information - Quantitative Data: Kinds and quality of Data, demography, labour force, agriculture, industry - Quantitative Data: Human resources, education, health, housing, employment, banking, rural

data bas - Quantitative Data: Survey Reports, Research Studies, Historical Data Tools - Statistical Systems – International, National and Local: Objectivity, Reliability and Validity of

Data - Surveys and Questionnaires: Questionnaire, Schedule Design and Construction, Sample Surveys, Survey Administration - Observation – Structured and unstructured, Recording and Interpretation of Observations, Ethnography -Interviews: Nature of the Interview Process -

Structured and Unstructured Interviews, Focus Groups, Group Discussions

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UNIT 6: Analysis of Qualitative and Quantitative Data 10 Hrs

Choice of Statistical and Processing Techniques - Interpretative Narrative Methods - Theory of

the Testing of Hypotheses - Presentation of Research Findings, Products of Research, Thesis Writing - Factors conducive to research utilization

References:

1. Bell, J. (1993) Doing your research project: a guide for first-time researchers in

Education and Social Science, Buckingham, UK: The Open University.

2. Borg, W.R., & Gall, M.D. (1983). Educational Research: An Introduction (Fourth ed.).

New York: Longman Inc.

3. Brinberg, D. and McGrath, J.E. (1985) Validity and the research process, Newbury Park,

CA: Sage Publications, Inc.

4. Erickson, F. (1986). Qualitative methods on research on teaching. in M.C. Wittrock (ed.),

Handbook of research on teaching (3rd ed., pp. 119 - 161). New York: MacMillan.

5. Fitz-Gibbon, C. T. and L. L. Morris (1987) How to Analyse Data, Newbury Park: Sage

Publications, Inc.

6. Foddy, W (1993) Constructing Questions for Interviews and Questionnaires: Theory and

Practice in Social Research, Cambridge: Cambridge University Press.

7. Isaac, S., and Michael, W.B. (1981). Handbook in research and evaluation: A collection

of principles, methods, and strategies useful in the planning, design, and evaluation of

studies in education and the behavioral sciences (2nd Ed.). San Diego: EdITS.

8. Yin, R.K. (1994). Case Study Research (Second Edition, Vol. 5). Thousand Oaks, CA:

Sage Publications, Inc.

9. Andreski, S. Social Sciences as Sorcery. New York: St. Martin's Press, 1973.

10. Blalock, H. M. Social Statistics, Rev. 2nd ed. New York: McGraw-Hill, 1979.

11. Duncan, O. Introduction to Structural Equation Models.

12. Guilford, J. P. and B. Fruchter. Fundamental Statistics in Psychology and Education, 6 th

ed. New York: McGraw-Hill, 1978.

13. Keppel, G., W. H. Saufley, Jr., and Howard Tokunaga. Introduction to Design and

Analysis: A Student's Handbook, 2nd ed. New York: W. H. Freman, 1992.

14. Matlack, W. F. Statistics for Public Managers, 1993. Itasca, Il: F. E. Peacock, 1993.

15. Meier, Kenneth J. and J. L. Brudney. Applied Statistics for Public Administration, 3rd ed.

Belmont, CA: 1993.

16. Phillips, J. L. Statistical Thinking: A Structural Approach, 2nd ed. San Francisco: W. Hl.

Freeman, 1982.

17. Renner, Tari. Statistics Unraveled: A Practical Guide to Using Statistics in Decision-

Making. Washington, DC: International City Management Association, 1988.

18. Reynolds, H. T. Analysis of Nominal Data, 2nd ed. Beverly Hills, CA: Sage, 1984.

19. Welch, S. and J. Comer. Quantitative Methods for Public Administration: Techniques and

Applications, 2nd ed. Chicago, Il: Dorsey Press, 1988.

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20. White, Michael J., et al. Managing Public Systems: Analytic Techniques for Public

Administration. Lanham: University Press of America, 1985.

21. Winkler, R. L. and W. T. Hayes. Statistics: Probability, Inference, and Decision, 2nd Ed.

New York: Holt, Rinehart and Winston, 1975.

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APPLIED FINANCIAL ECONOMICS

MEC 136

Objectives: 60 Hrs

This course introduces students to the conceptual and practical operations of the capital market

and its institutional framework in Indian context. The course is intended to provide an in -depth

understanding of the operational issues of the capital market and the security analyzing criteria.

UNIT 1: Theoretical Foundation for Financial Economics 08 Hrs

Introduction to Financial Economics - Finance and Economics – Role of Financial Intermediation - Financial System and Economic Development - Time Value of Money - Future

value - Present value - Newman – Morgenstern Utility Index - Constructing N M Utility Index - Distinction between NM utility and neo-classical utility measurement – Application of NM

Utility Index - Freidman Savage Hypothesis - Capital Asset Pricing Model - Limitations of CAPM - Arbitrage Pricing Model - Law of one price

UNI 2: Risk- Return Trade off 09 Hrs

Different sources of risk - The process of Risk Return Trade Off - Measure risk - Markowitz‘s

Portfolio theory – Expected rate of returns- Variance and standard deviation – Covariance of return – Correlation – Standard deviant of portfolio – Efficient portfolio - Attitude towards Risk -

Risk Averter vs. Risk Lover - Risk Lover‘s gamble - Risk Neutral Situation - Risk Aversion and Insurance - Estimating firm‘s beta

UNIT 3: Market Efficiency 07 Hrs

Financial Market efficiency – Weak form efficiency – Semi- strong form efficiency – Strong

form efficiency – Departure from market efficiency - Financial market Efficiency – tests for market efficiency - Financial Sector Reforms - Philosophy of Financial Sector Reforms –

Achievements - Areas of Concerns in Financial Sector Reforms

UNIT 4: Financial Markets 08 Hrs

Components of financial markets - Money markets and capital markets - Primary and secondary

markets – Organized and over-the counter markets – Commodity and currency market - Derivative market - Securities traded in financial markets - Financial Instruments - T- Bills- Commercial papers – Certificates of Deposits – Repos and Reverse repos – Bond Markets –

Treasury bonds- State and Municipal Government bonds- Corporate Bonds – Zero Coupon Bonds – Convertible bonds- callable bonds- putable bonds – Fixed and floating rate bonds –

International bonds- Instruments in capital markets

UNIT 5: Primary Markets 09 Hrs

Initial Public Offers – Follow on public offer - Rights issue – Bonus issue – Qualified Private placements - Function of merchant banker – Pre- issue obligations – Post- issue obligations –

Pricing of Public issue – price bands – Credit Rating – Dutch auction - Book Building -Post-Issue Obligations- Eligibility Norms- Contribution of Promoters and lock- in- Demat Issues- Euro

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Issues- Applications Supported by Blocked Amount (ASBA) -Qualified Institutions Placement (QIP)

UNIT 6: Secondary Markets 07 Hrs

Depository system – Stock exchanges – Demutualization of stock exchanges – Listing of securities – Internet trading – Trading in Secondary Markets – types orders – Limit orders –

Market orders- Stop loss order – Day order – Cancel Order - Matching Orders - Circuit breakers – Insider Trading – Unfair trade Practices – Buy back - Over-the counter Markets

UNIT 7: Derivative Markets 05 Hrs

Forwards, Options and futures – Call and put option – Speculating with call option – Speculating with put options – Determinants of call option premium - Determinants of put option premium

UNIT 8: Financial Planning 07 Hrs

Specification of Investment goals - Investment Alternatives - Analysis of Individual‘s

Environment and Resources - Establishment of Financial Plans - The Capacity to Meet Financial Emergencies - Desire to Finance Identifiable Future Purchases such as Children‘s Education -

The Need for Additional Income - Desire to Accumulate an Estate - Desire to speculate - Asset allocation – Monitoring and evaluation - Active vs. passive portfolio management

References:

1. William Sharpe, Gordon Alexander and Jeffery Bailey, Investments 5/e, Prentice Hall of

India, Chapters 1 – 13 (Selectively), 20, 22. 2. Hendrick S. Houthakker and Peter J. Williamson (latest edition), The Economics of

Financial Markets, Oxford University Press, Selected chapters.

3. John Eatwell, Murray Milgate and Peter Newman (eds.), Finance: The New Palgrane, Norton, Chapters by Stephen Ross (Finance) and J.E. Ingersol (Option Pricing Theory)

4. L.M. Bhole, Financial Institutions and Markets, 3/e, Tata McGraw Hill.

17

SEMESTER II

NEW INSTITUTIONAL ECONOMICS

MEC 231

Objectives: 60 Hrs

The course aims at introducing the students to basic concepts of New Institutional Economics

(NEI) and sensitise them to various problems relating to information asymmetry, property rights

and transaction costs by bringing in cases from the real world.

UNIT 1: Basic Introduction to Institutional Economics 05 Hrs

Institutional Economics as a departure from Neo-Classical and Marxian Economics - Historic

development of Institutional Economics - Old and New Institutional Economics - Core issues in New Institutional Economics – Idea of Bounded Rationality - Principal – Agent Problem -

Michael Spence‘s Theory of Market Signaling. UNIT 2: Transaction Costs and Bounded Rationality 11 Hrs

Defining Transaction: Williamson and John R Commons‘ meaning of Transaction - Types of Transaction Cost: Market, Managerial and Political transaction costs - Identification and

measurements of transaction costs: some general principals - Modeling Transaction Costs by modeling the transaction activity.

UNIT 3: Introduction to Property and Contracts 11 Hrs

Introducing Property and Contracts: Markets and Property Rights, The Benefits and Costs of

Contracts including a Coasian Reasoning of efficient allocations in Contracts, Defining Rights and Contracting over them, Property, Contracts and Markets – Introduction to the Economics of Contracts: Specific Investments and Opportunism, Damages for Breach of Contracts, Principal

and Agent in Contractual Situations and Incomplete Contracts.

UNIT 4: Absolute Property Rights Issues 11 Hrs

Basic Concepts and Definitions - Other Rights and Conventions - Property in Physical Objects - Assigning Property Rights: The Internalisation of External Effects and Efficiency in Property

Rights Analysis - Common Pool Resources and The Tragedy of the Commons including Institutional solutions to the CPR Problem - Emergence of Property Rights: The Invisible Hand

and The Optimistic Theory - Contracting for Property Rights: The Role of Political Bargaining and the Liebcap Thesis.

UNIT 5: Relative Property Rights Issues 11 Hrs

Basic Principles of Contractual Obligations: Freedom and Liability of Contract – Types of

Contractual Obligations: Pre and Post Contractual Opportunism in Sales, Lease, Employment and Loan Contracts – Economic Theories of Contract: Agency Theory, Self Enforcing Agreement Theory and Relational Contract Theory – Private Ordering: Types and their

dynamics.

18

UNIT 6: Applications of NIE 11 Hrs

The New Institutional Economics of the Market: Market as Organisation, Price Rigidity, Market

Organisation as Market Cooperation and Neoinstitutionalist view of Market Organisation – The New Institutional Economics of the Firm: The Orthodox Neo – Classical Firm, The Incentives

and the Limits to Integration, Ownership and Control, Institutional Models within the Neo – Classical Framework, Co – Determination and Comparison of the Formal Models of the Firm.

Course Texts:

1. Furburton & Richter, ‗Institutions and Economic Theory‘, Dryden Press.

2. Michaels, Robert J, ‗Economics for Managers – Transactions and Strategies‘, 1st Edition, (2011), First Indian Reprint (2012), Cengage Learning.

3. Santhakumar. V, ‗Economic Analysis of Institutions – A Practical Guide‘, (2011), SAGE.

4. Relevant Journal Articles wherever feasible.

References:

1. North, Douglas C., ―Institutional Change and Economic Performance‖, Cambridge University Press, (2004).

2. Eggertson, Thrainn, ―Economic Behaviour and Institutions‖, Cambridge University Press, (1999).

3. Olson Mancur (1965), The Logic of Collective Action, Harvard University Press, Cambridge.

4. Shaw, M E. (1971). Group Dynamics: The Psychology of Small Group Behaviour,

McGraw Hill, New York. 5. Frank, Robert H., ―Micro Economics and Behaviour‖, McGraw Hill International

Editions, (1991). 6. Pindyck, Robert S., Rubinfeld, Daniell L., & Mehta, Prem L., ―Microeconomics‖, 7 th

Edition, (2009), Pearson.

19

MACROECONOMIC THEORY AND POLICY-II

MEC 232

Objectives: 60 Hrs

This paper aims at strengthening the knowledge of important macroeconomic variables and their

role in determining the equilibrium level of output and employment and provides insights into factors influencing the capital inflows and outflows in an open economy model. It helps the

students to understand the theoretical foundation of macroeconomics and the contribution of different schools of thought to the further development of macroeconomics. The students will be able to critically evaluate the consequences of basic macroeconomic policy options under

differing economic conditions within a business cycle.

UNIT 1: Inflation, Unemployment and Productivity 14 Hrs

Classical, Neo-classical and modern theories of inflation- Keynesian and monetarist views on inflation-Inflation in the static model-Wages, prices and productivity-The wage price guidepost

and income distribution- The relation of wages to unemployment-Phillips curve and the policy implications-Expectations augmented Philips curve-The time inconsistency problem and central

bank independence-Seigniorage and hyperinflation-disinflation. UNIT 1: Theories of Distribution and Interest rates 08 Hrs

The Classical theory of income distribution- The Marxian theory of income distribution-Kalecki‘s model-Kaldor‘s model-Pasinetti model of income distribution. Real and monetary

theories of the rate of interest: liquidity preference and loanable funds theories of interest- The term structure of interest rates: Pure Expectations Theory-Pure segmentation theory.

UNIT 2: Stock Adjustment Dynamics and Trend Growth in the Static Model 12 Hrs

Money Finance of the budget deficit-Introduction of the wealth effects-Bond finance of the

deficit and crowding out-Interaction between the government budget and the balance of payments-A general view of asset stock adjustment-Trend growth of output and prices-Trend growth of the money supply-Product market equilibrium and the budget-The monetary, fiscal

policy mix along trend-Fiscal drag and full employment surplus-Public debt with trend growth.

UNIT 3: Long Run Growth with Full Employment 13 Hrs

Basic assumptions of one sector growth models-The Harrod-Domar condition for equilibrium growth-The Classical saving function-The characteristic equation of a one sector growth model-

The Kaldor saving function-The Ando, Modigliani Consumption function-The basic Neoclassical model-Saving and Consumption in growth equilibrium-Phelps golden rule of

accumulation-Optimal growth Turnpikes. UNIT 4: Business Cycles, post Keynesian Macroeconomics 13 Hrs

Cyclical behaviour of economic variables-leading indicators-Demand management and the sources of cyclical fluctuations-Theories of business cycles-Hawtrey‘s theory-Hayek‘s theory-Schumpeter‘s theory-Keynes‘ theory-Samuelson‘s model-Hick‘s theory, Kaldor‘s model-Real

business cycle theory-Anticyclical and stabilisation policies-Monetarism, major postulates-Keynesian policy framework-Stagflation trend-Supply side economics, implications, Market

20

efficiency and the theory of supply side policy-Taxation as the price of intervention-Product market and labour market policies.

Course Text:

1. William.H.Branson (2005). Macroeconomic Theory and Policy, Third Edition, All India

Traveller Book Seller Publishers, New Delhi.

References:

1. Burda and Wyplosz (2009). Macroeconomics: A European Text, Fifth Edition, Oxford

University Press, New York.

2. Graeme Chamberline & Linda Yueh (2006). Thomson Learning.

3. N. Gregory Mankiw. (2012). Macroeconomics. 8th

Edition, Worth Publishers.

4. Dornbusch, Fischer, Startz. (2010). Macroeconomics. 11th

Edition, Tata Mc Graw Hill.

5. M. Maria John Kennedy (2011). Macroeconomic Theory, PHI Learning Private Limited,

New Delhi.

6. H.L.Ahuja. (2012). Macroeconomics:Theory and Policy. 18th

Revised Edition, Sultan Chand

Publishers.

7. D.N. Dwivedi. (2005). Macroeconomics:Theory and Policy. 2nd

Edition, Tata Mc Graw Hill

Education.

8. Levacic and Rebman. (1982). Macro Economics:An Introduction to Keynesian and Neo-

Classical Controversies. 2nd

Edition, Macmillan Publishers.

9. Brain Snowdown, Howard Vane and Peter Wynarczyk. (1995). A Modern Guide to Macro

Economics: An Introduction to Competing School of Thought, Edward Elgar Publishing.

10. Edward Shapiro. (2011). Macroeconomic Analysis. 5th Edition, Galgotia Publication Ltd.

11. Ackley.G. (1978). Macroeconomics: Theory and Policy, Macmillan, NewYork.

21

ADVANCED MATHEMATICAL ECONOMICS

MEC 233

Objectives: 60 Hrs

The main objectives of the paper are to train the students to grasp the use of mathematical

techniques and operations to analyse economic problems and to initiate students into various

economic concepts which are amenable to mathematical treatment.

UNIT 1: Introduction to Mathematical Economics -Equilibrium (Or Static) Analysis10Hrs Equilibrium analysis in Economics-Definition of equilibrium-Solution of equilibrium- Single vs.

multiple equilibrium-Partial vs. general equilibrium. Application: single vs. multiple commodity

markets-Linear Models and Matrix Algebra -Matrix algebra with special emphasis on Cramer‘s

rule- Applications: multiple commodity markets- Heckscher-Ohlin model-COMPARATIVE

STATIC ANALISYS- Review of comparative static analysis using IS-LM model- Alternative

approaches- Application: Mundell-Fleming model (IS-LM with small open economy

UNIT 2: Unconstraint Optimization Problems 20 Hrs

Optimization of functions of one variable -Main concepts- First-derivative test or first order

conditions- Second-derivative or second order conditions (sufficient conditions) Applications:

Profit maximization (one product) under: - perfect competition - monopoly. - Cournot

competition (duopoly)- Optimization of functions of more than one variable- The differential

version of optimization conditions- Extreme values of function of two variables and comparative

static aspect of optimization- Application: Profit maximization (two products) under perfect

competition- extreme values of function of n variables. Applications: i) Monopolist selling in

segmented markets

UNIT 3: Constraint Optimization Problems 15 Hrs

Lagrange-multiplier method-First-derivative test or first order conditions-Second-derivative or

second order conditions. Applications: Utility maximization and consumer demand (two goods,

one period)-Utility maximization and consumer demand (one goods, two periods)- perfect access

to international capital markets.-financial autarky. Welfare implications

UNIT 4: Further Topics in Optimization

Uncertainty and consumption under capital markets imperfections- Applications: Utility

maximization and consumption under uncertainty of output path and incomplete markets.

Certainty equivalence and precautionary savings- Multiple agents optimization- Application:

Optimal taxation. Exogenous government spending- Benevolent government (15 Hrs)

References:

1. Edward Dowling (2000), Introduction to Mathematical Economics, McGraw Hill Ltd,

NewDelhi.

2. Chiang, Wainwright, Kevin (2005), Fundamental Methods of Economics, McGraw Hill

Ltd, NewDelhi.

22

3. Allen R G D(1974).Mathematical Analysis for Economists, Mc Millan Press and ELBS,

London.

4. Allen R G D (1967). Macroeconomic Theory, Mc Millan Co., Ltd.,.

5. Chiang A C (1986). Fundamental Methods of Mathematical Economics, Mc Graw Hill,

6. New York.

7. Koutsoyiannis A. (1979). Modern microeconomics, 2nd ed, ELBS with Mc Millan.

8. 7. Mona G S. (1996) Mathematics and Statistics for Economics, Vikas Publishing House

Pvt. Ltd., Delhi.

9. Yamane, Taro (1975) Mathematics for Economists, Prentice Hall of India, New Delhi.

10. Mehta-Madnani (2005) Mathematics for Economists, Sultan Chand and Sons, New

Delhi.

11. Eugene Diulio, Macroeconomics, Schaum‗s Outlines, Mc Graw Hill.

23

ECONOMETRICS

MEC 234

Objectives: 60 Hrs

The course is designed to impart the learning of principles of econometric methods and tools. This is expected to improve student’s ability to understand of econometrics in the study of economics.

UNIT 1: Introduction 11 Hrs

Nature, meaning and scope and methodology of Econometrics-The simple Linear Regression Model-The ordinary least squares method (OLS) and its assumptions; Properties of least squares estimates; Guass-Markow Theorem,R2, Adjusted R2.

UNIT 2: Econometric Problems 15 Hrs

Violations of basic assumptions of OLS- nature, test, consequences and remedies, the problems of Specification error; Functional forms of regression models- Log-Linear, semi log model, reciprocal models, and polynomial models (brief outline only).

UNIT 3: Dummy variables, Dynamic Economic Models 15 Hrs

Dummy variable technique, Uses of Dummy variables, dummy variable trap, regression on dummy dependent variable-The LPM Model, Logit Model, Probit Model, Tobit model- features and estimation; Auto regressive and distributed lag models-The Koyck model, partial adjustment

model, adaptive expectation model, The Almon approach to distributed lag models.

UNIT 4: Simultaneous Equation Models and Methods 12 Hrs

The simultaneous equation bias and inconsistencies of OLS estimation – identification - the identification problem – under identification – exact identification and over identification- Rules

of identification, derivation of order and rank condition; Indirect least squares (ILS), the method of instrumental variables (IV), Two stage least squares (2SLS), Three stage least sq uares (3SLS),

‗K‘ Class estimators, Limited information, maximum likelihood estimation (Concepts only). UNIT 5: Time Series Econometrics 07 Hrs

An Autoregressive(AR) Process, A Moving Average(MA) Process, An Autoregressive and Moving Average (ARMA) Process,An Autoregressive Integrated Moving Average (ARIMA)

Process.

References:

1. Damodar Gujarati - Basic Econometrics, McGraw - Hill, 2007.

2. A.Koutsoyiannis -Theory of Econometrics.

3. William .H. Greene -Econometric Analysis.

4. Lawrence Klein. - An Introduction to Econometrics. Prentice Hall Inc., Englewood

Cliffs. New Jersy.

5. A. Walters - An Introduction to Econometrics.

6. R.S. Pindyck and D.L.Rubinfeld -Econometric Models and Econometric Forecasts.

7. J.Johnston -Econometric Methods. McGraw Hill Book Company, New York, 1972.

24

8. G.S.Maddala -Econometrics. , McGraw Hill, New York, 1977.

9. A.S. Goldberger - Econometric Theory.

10. Michael D. Intriligator, Econometric Models, Techniques and Applications, Prentice

Hall of India, New Delhi, 1980.

25

INTERNATIONAL ECONOMICS-THEORY AND POLICY

MEC 235

Objectives: 60 Hrs

The course is intended to inculcate in students an analytical understanding of structure and

patterns of trade grounded on theoretical ideas; to explore the potential to expand trade and to

suggest possibilities; accustom to the challenges that emerging countries face in the globalised

scenario.

PART I: INTERNATIONAL TRADE

UIT 1: Core Trade Models 05 Hrs

Ricardian and Neoclassical models of trade

UNIT 2: Heckscher-Ohlin Theory and Empirics 05 Hrs

Heckscher-Ohlin and Related Models of trade and Empirical Tests

UNIT 3: Trade and Wages 10 Hrs

Theoretical Perspectives and Empirical Studies; Increasing Returns, National Conflict, and the

Gravity Model

UNIT 4: Trade Policies under Alternative Assumptions 05 Hrs

Perfect Competition, Imperfect Competition, and Market Failures

UNIT 5: Trade and Growth 06 Hrs

Theoretical Perspectives; International Factor Mobility and Multinational Corporations

PART II: OPEN MACROECONOMICS

UNIT 6: Balance of Payment and Exchange rate 12 Hrs

The Balance of Payments and National Account; Determinants of Exchange Rates: Purchasing

Power Parity; Sluggish Price and Overshooting Exchange Rate Model; Effect of Interventions in

the Foreign Exchange Market

UNIT 7: Exchange Rate regimes, Policies and Financial Crisis 12 Hrs

The Exchange-Rate Regime Choice and a Common Currency Area: Policy Assignment

Problems; International Policy Coordination; Choice of Exchange Rate Regimes; International

Debt and Currency Crises

UNIT 8: International Financial Organisations 05 Hrs

The Role of the IMF and Other International Financial Organizations

26

References:

1. Robert C. Feenstra, Advanced International Trade: Theory and Evidence, Princeton

University Press, 2004, ISBN 0-691-11410-2

2. Edward Leamer, editor, International Economics, Worth Publishers, 2001, ISBN 1-

57259-820-4.

3. James R. Markusen, James R. Melvin, William H. Kaempfer, and Keith E. Maskus

(MMKM),

4. International Trade: Theory and Evidence, McGraw-Hill, 1995, ISBN 0-07-040447-X.

5. Krugman P., Obstfeld M. (KO) International Economics: Theory and Policy. Ed. 3-5.

6. Sodersten B., Reed G. (SR) International Economics, 3rd ed. Macmillan, 1994.

7. Appleyard D., Field A. (A) International Economics.

8. Vanags A. (UL) International Economics. University of London, Subject Guide, 2001.

9. Ethier W. (E) Modern International economics, 3rd edition. W.W. Norton & Co., 1997.

10. Winters, A. (W) International Economics, 4th edition.

11. Handbook of International Economics (HIE), Vol. 3, Elsevier Science B.V., Amsterdam

1997.

12. Jagdish N. Bhagwati, ed. International Trade: Selected Readings, 2nd edition

(Cambridge, MA: MIT Press, 1987).

13. Jagdish N. Bhagwati, Arvind Panagariya, & T. N. Srinivasan, Lectures on International

Trade, second edition (Cambridge, MA: MIT Press, 1998).

14. William R. Cline, Trade and Income Distribution (Washington, DC: Institute for

International Economics, 1997).

15. Stephen D. Cohen, Robert A. Blecker, & Peter D. Whitney, Fundamentals of U.S.

Foreign Trade Policy: Economics, Politics, Laws, and Issues, 2nd edition. (Boulder:

Westview, 2003).

16. Susan M. Collins, ed., Imports, Exports, and the American Worker (Washington, DC:

Brookings Institution, 1998).

17. Giovanni Dosi, Keith Pavitt, & Luc Soete, The Economics of Technical Change and

International Trade (New York: NYU Press, 1990).

18. Ronald Findlay, Factor Proportions, Trade, and Growth (Cambridge, MA: MIT Press,

1995).

19. Dominique Foray & Christopher Freeman, eds., Technology and the Wealth of Nations:

The Dynamics of Constructed Advantage (London: Pinter, 1993).

20. Ralph E. Gomory & William J. Baumol, Global Trade and Conflicting National Interests


21. Gene M. Grossman, ed., Imperfect Competition and International Trade (Cambridge,

MA: MIT Press, 1992).

22. Gene M. Grossman & Elhanan Helpman, Innovation and Growth in the Global Economy


23. Gene M. Grossman & Kenneth Rogoff, eds., Handbook of International Economics, vol.

27

3, (Amsterdam: North-Holland, 1995).

24. Ronald W. Jones & Peter B. Kenen, eds., Handbook of International Economics, vol. 1,

25. International Trade (Amsterdam: North-Holland, 1984).

26. Paul R. Krugman, Rethinking International Trade (Cambridge, MA: MIT Press, 1990).

27. Paul R. Krugman, Geography and Trade (Cambridge, MA: MIT Press, 1991).

28. Andrea Maneschi, Comparative Advantage in International Trade: A Historical

Perspective (Edward Elgar, 1998)

29. Dani Rodrik, Has Globalization Gone Too Far? (Washington, DC: Institute for

International Economics, 1997).

28

ELECTIVES

ECONOMICS OF BANKING AND INSURANCE

MEC 241A

Objectives: 45 Hrs

This paper is designed to prepare the students with training in theoretical and practical aspects

of Banking and Insurance Science. It also equip them to work in life and non-life insurance companies (designing insurance products and valuing financial contracts and investing funds);

consultancy (offering advice to occupational pension funds and employee benefit plans); government service (supervising insurance companies and advising on the national insurance); and also in the stock exchange, industry, commerce and academia. This paper also develops the

caliber of the students to understand the banking procedure with its command on money inflow in the market.

UNIT 1: Risk, Uncertainty and Asymmetric Information in Banking and Insurance

Markets 08 Hrs

Contingent Consumption; Utility Functions and Probabilities; Expected Utility Theory in Insurance Market; Risk pooling; risk spreading; risk transfer; Quality Choice – Choosing the

Quality; Moral Hazard and Adverse Selection in Banking and Insurance Theories; Signaling - The Sheepskin Effect; Incentives; Asymmetric Information - Monitoring Costs Example: The Grameen Bank; Systems Competition; The Problem of Complements; Relationships among

Complementors; Markets with Network Externalities;

UNIT 2: Banking Theories and Institutions 13 Hrs

Monetary Policy of RBI – Bank Nationalisation and Credit Planning; Monetary Targeting; Multiple Indicator Approach and Liquidity Adjustment Facilities (LAFs); Theoretical Basis of

Banking Operations; Liabilities of Banks – deposits, non-deposit resources, other liabilities; Banking Assets – Investments, Bank Credit; Concept of Lending and Portfolio Choice and

Aspects; Banking Innovations; Risk Management in Banking; Non-Bank Financial Intermediaries (NBFIs) and Statutory Financial Organisation – Small Savings, Provident Funds and Pension Funds; NBFIs and Miscellaneous Financial Organisation – Loan Companies,

Investment Companies, Hire-Purchase Finance; Lease Finance; Housing Finance;

UNIT 3: Life Insurance 08 Hrs

Types of life insurance Contracts: Term and Cash Insurance; The Level Premium Concept; Life Insurance Products; Types of Term Insurance; Whole Life Insurance; Variation of Whole Life

Insurance; Indeterminate Premium Whole Life Insurance; General Classifications of Life Insurance; Computation of Life Insurance Premium; Benefits-Certain and Benefits-Uncertain

contracts;

UNIT 4: Health Insurance 08 Hrs

Individual Health and Disability Income Insurance; Types of Individual Health Insurance Coverage: Hospital (Surgical Insurance, Major Medical Insurance); Disability Income Insurance;

Need for Disability Income Insurance: Short Term Versus Long Term Disability Coverage; Health Insurance for the Elderly; Long Term Care Insurance; Employee Benefits: Group, Life

29

and Health Insurance; Group Insurance: Group Life Insurance Plans, Group Health Insurance Plans, Group Disability - Income Insurance;

UNIT 5: Insurance Company Operations 08 Hrs

Insurance Company Operations: Rate Making, Underwriting, Production, Claim Settlement, Reinsurance; Life Insurance Industry in India; Government Insurance Units; Private Players; Emerging Scenario; Marketing Systems; Distribution Channels: Agents and Brokers; Changes in

Distribution System; Government regulation of Insurance; Rationale of Regulation; Function of IRDA, IITDA Regulations; Issues in Insurance Regulation

References:

1. Ackley, G. (1978), Macroeconomics: Theory and Policy, Macmillan, New York.

2. Besley, T., J. Hall, and I. Preston. 1998. ―Private and Public Health Insurance in the United Kingdom.‖ European Economic Review 42 (35): 491–97.

3. 1999. ―The Demand for Private Health Insurance: Do Waiting Lists Matter?‖ Journal of Public Economics 72 (2): 155–81.

4. Bodenheimer, T. 1992. ―Private Insurance Reform in the 1990s: Can It Solve the Health

Care Crisis?‖ International Journal of Health Services 22 (2): 197–215. 5. Carmichael, J., and M. Pomerleano. 2002. The Development and Regulation of Non-Bank

Financial Institutions. Washington, DC: World Bank. 6. Chakravarty, S.C. (1985), Report of the Committee to Review the Working of the

Monetary System, Reserve Bank of India, Bombay.

7. Colclough, C. 1997. Marketizing Education and Health in Developing Countries: Miracle or Mirage? Oxford and New York: Clarendon.

8. Cutler, D. M., and J. Gruber. 1995. Does Public Insurance Crowd Out Private Insurance? Cambridge, MA: National Bureau of Economic Research.

9. 1997. ―Medicaid and Private Insurance: Evidence and Implications.‖ Health Affairs

(Millwood) 16 (1): 194–200. 10. Ensor, T. 1995. ―Introducing Health Insurance in Vietnam.‖ Health Policy and Planning

10 (2): 154–63. 11. 1999. ―Developing Health Insurance in Transitional Asia.‖ Social Science and Medicine

48 (7): 871–79.

12. Folland, S., M. Stano, and A. C. Goodman. 2004. The Economics of Health and Health Care. Upper Saddle River, NJ: Pearson/Prentice Hall.

13. Glied, S. A. 2001. ―Health Insurance and Market Failure since Arrow.‖ Journal of Health Politics, Policy and Law 26 (5): 957–65

14. Grant, K., and R. Grant. 2003. ―Health Insurance and the Poor in Low-Income

Countries.‖ World Hospitals and Health Services 39 (1): 19–22. 15. Hal R. Varian, Intermediate Microeconomics, 5/e, W W Norton and Company. 16. ILO Sub-regional office for South Asia, New Delhi, Extension of Social Protection in India

Information Papers Series, ―Yeshasvini Cooperative Farmers Health Scheme: A Typical Example.‖ February 2007

17. Keynes, J.M. (1936), The General Theory of Employment, Interest and Money,

Macmillan, London. 18. L.M. Bhole, Financial Institutions and Markets, 3/e, Tata McGraw Hill. 19. Laidler, D.E.W. (1977), Demand for Money: Theory and Evidence, DumDon Valley,

New York.

30

20. Manning, W. G., and M. S. Marquis. 1996. ―Health Insurance: The Trade-Off between Risk Pooling and Moral Hazard.‖ Journal of Health Economics 15 (5): 609–39.

21. McKnight, R. 2002. Essays on the Economics of Health Insurance. Cambridge, MA: Massachusetts Institute of Technology.

22. Nyman, J. A. 2003. The Theory of Demand for Health Insurance. Stanford: Stanford UniversityPress.

23. Outreville, J. F. 1991. ―Use of Computer Technology in the Insurance Sector of

Developing Countries.‖ Discussion Paper 38, United Nations Conference on Trade and Development, Geneva.

24. 1994. ―Life Insurance in Developing Countries: A Cross-Country Analysis.‖ Discussion Paper 93, United Nations Conference on Trade and Development, Geneva.

25. 1996. ―Reinsurance in Developing Countries: Market Structure and Comparative

Advantage.‖ Discussion Paper 121, United Nations Conference on Trade and Development, Geneva.

26. 1998. Theory and Practice of Insurance. Dordrecht and Boston: Kluwer Academic Publishers.

27. P.S. Palande, R.S Shah, and M. L. Lunawat, (2003), Insurance in India: Changing

Policies and Emerging Opportunities, Sage Publications. 28. Reddy, Y.V. (2000), A Review of Monetary and Financial Sector Reforms in India – A

Central Banker‘s Perspective, UBSPD, New Delhi.

31

ECONOMICS OF PLANNING

MEC 241B

UNIT1: Introduction to Economic Planning 05hrs

Meaning; Need for Economic Planning; History of Economic planning; Objectives of planning;

Characteristics of economic planning; Necessary condition for the success of planning; the future

of the development planning; Types of Planning;

UNIT2: Planning Techniques 13hrs

Input-Output Analysis

Introduction; main features; different stages of input output relations; viability test; feasibility

condition; forecasting important requirements; forecasting labour and investment requirements;

backward and forward linkages; triangularised Input-Output Tables; Use of Dynamic Input

Output Model in planning

Linear Programming

Basic concepts; programming techniques; choice of process; constraints of limited capacities;

Dual problem; Uses of Linear Programming in planning

Project Evaluation, Cost-Benefit Analysis

Stages of project evaluation; cost-benefit analysis; application of market principle; criteria for

cost benefit analysis; evaluation of cost-benefit analysis; Rationale of project selection; project

benefit and consumer surplus; measurements of benefits and costs; assigning weights in project

selection; shadow pricing in cost benefit analysis;

Capital Output Ratio

Factors affecting capital output ratio; uses of capital output ratio; Capital output ratio in India

UNIT3: Development of Planning In India 10hrs

Introduction; National Planning Committee; the Bombay plan; Gandhian plan; Nehruvian model;

Post war reconstruction; advisory planning board; Planning form independence to the

Establishment of Planning Commission; administrative organisation; internal organisation and

other significance bodies; Process of Planning in India; Features of planning process in India;

Pitfalls of planning commissions; Planning at the State level and decentralized planning at district,

taluk and village level.

UNIT4: Plan Models and strategies in Indian Plans 12hrs

First Five year plan (Capital-output ratio); Second Plan Model (Mahalanobis Model); Third Plan

Model (Chakravarthy Model); Fourth Plan Model (Open consistency model); Fifth Plan Model,

Sixth Plan Model, Seventh Plan Model; Eighth plan model; the ninth plan model; Tenth,

Eleventh and twelfth Plan; Critical account of inclusive growth strategy adopted by the XI and XII

plans.

UNIT 5: Mobilisation of Resources for Indian Plans 05hrs

32

Introduction; methods of resource mobilisation; analysis of finances envisaged for different five

year plans

References:

1. Annual Plan Documents, Planning Commission, Government of Karnataka

2. Approach Papers, Planning Commission, Government of India

3. Mid-Term Appraisals, Planning Commission, Government of India

4. Faster, Sustainable and More Inclusive Growth: An Approach to the Twelfth Five Year

Plan(2012-2017), Planning Commission, Government of India

5. Planning Commission (24 February 1997). "A Background Note on Gadgil Formula for distribution of Central Assistance for State Plans". Retrieved 2010-09-17.

6. L. N. Dash (2000). World bank and economic development of India, APH Publishing. p. 375. ISBN 81-7648-121-1.

7. Jinghan, M L (2013), The Economics Of Development And Planning: With Special

Reference To India, Advent Books Division Inc Publishers. 8. Lekhi R K (2013), The Economics of development and Planning, Kalyani Publishers

9. Lewis Arthur (2003), The Principles of Economic Planning, Routledge Publications 10. Tondon B.C (1966), Economic Planning, Chaitanya Publishing House 11. Mishra S K (1994), Mahalnobis Approach to Planning in India, Deep and Deep

Publications, New Delhi 12. Baldev Raj Nayar, Globalization And Nationalism: The Changing Balance Of India's

Economic Policy, 1950–2000 (New Delhi: Sage, 2001) 13. Agrawal, A N (1995). Indian Economy: Problems of development and planning. pune:

Wishwa Prakashan. p. 676.

Reports:

First Five Year Plan Second Five Year Plan Third Five Year Plan

The Annual Plans (1966-67, 1967-68, 1968-69) Fourth Five Year Plan

Fifth Five Year Plan Sixth Five year plan Seventh Five Year Plan

Eighth Five year Plan Ninth Five Year Plan

Tenth Five Year plan Eleventh Five Year Plan Twelfth Five Year Plan

Economic Surveys

http://en.wikipedia.org/wiki/Planning_Commission_%28India%29

http://www.pbplanning.gov.in/pdf/gadgil.pdf



http://books.google.com/?id=rRWDxpHcBHoC&pg=PA114&lpg=PA114&dq=sixth+five+year+plan+of+india+growth+actual+5.6#v=onepage&q=sixth%20five%20year%20plan%20of%20india%20growth%20actual%205.6&f=false

http://en.wikipedia.org/wiki/International_Standard_Book_Number

http://en.wikipedia.org/wiki/Special:BookSources/81-7648-121-1

33

SEMESTER III

APPLIED ECONOMETRICS

MEC 331

Objectives: 60 Hrs

This course covers time series and panel data econometrics with focus on applications in the

field of macroeconomics and international finance. We will cover univariate and multivariate models of stationary and nonstationary time series in the time domain. The goals of the course

are threefold: (1) develop a comprehensive set of tools and techniques for analyzing various forms of univariate and multivariate time series, and for understanding the current literature in applied time series econometrics; (2) survey some of the current research topics in applied time

series econometrics; (3) assist students in getting comfortable with applied time series models and panel data models through EVIEWS and STATA statistical packages to manage and analyze

data.

UNIT 1: Stationarity Univariate Models 06 Hrs

Stochastic processes - Properties of stochastic process. Time series as a discrete stochastic process– Stationarity- Characteristics of stochastic component of time series (mean,

autocovariation and autocorrelation functions). Lag operator- Unit root tests - Deterministic and stochastic trend models-Augmented Dickey Fuller test – Phillips-Perron test-Estimation and testing.

UNIT 2: Simultaneous Equation Models 10 Hrs

Dynamic simultaneous equations models- Granger representation theorem -Granger causality

test - Vector Auto Regressive (VAR) models-Impulse Response Function (IRF)-Variance

Decomposition Analysis - Structural Vector Auto Regressive (SVAR) models– Testing for

cointegration – Engle and Granger (1987) and Johansen and Juselius (1990)-Vector error

correction models (VECMs)-Estimation and Diagnostic Checking.

UNIT 3: Conditional Variance Models 08 Hrs

Volatility Clustering- Leverage Effects- Modeling Volatility- AutoRegressive Conditional Heteroscedasticity (ARCH) Model- Generalised AutoRegressive Conditional Heteroscedasticity

(GARCH) Model - Extensions to GARCH-Exponential GARCH and Threshold GARCH models.

UNIT 4: Panel Data Models 06 Hrs

Introduction to Panel Data - Types of panels- Balanced and Unbalanced Panel Data-Benefits and

drawbacks of longitudinal data. Basic models-Pooled OLS-Fixed effects-Random effects Model-Estimation and testing- Fixed vs Random Effects Model -Hausman specification test.

References:

1. Kerry Patterson, An Introduction to Applied Econometrics: A Time Series Approach

Palgrave Macmillan, 2000. 2. Walter Enders, Applied Econometric Time Series. New York: John Wiley & Sons, Inc.,

1995.

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3. Chris Brooks, Introductory Econometrics to Finance - Cambridge University Press, 2002 4. B. H. Baltagi, Econometric Analysis of Panel Data, 4th ed., John Wiley, New York,

2008. 5. J.D. Hamilton, Time Series Analysis, Princeton, NJ: Princeton University Press, 1994.

6. W. Greene, Econometric Analysis, Macmillan, 1993. 7. R.A. Johnson, and D.W. Wichern, Applied Multivariate Statistical Analysis, Prentice

Hall, 1988.

http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CEEQFjAD&url=http%3A%2F%2Fwww.cambridge.org%2Fus%2Facademic%2Fsubjects%2Feconomics%2Feconometrics-statistics-and-mathematical-economics%2Fintroductory-econometrics-finance&ei=O7XcUrywPMmOrQeH5oGgAg&usg=AFQjCNGwtWCE7ga8ZgVVJqmXrMxFn8FYUw

35

PUBLIC FINANCE AND POLICY

MEC 332

Objectives: 60 Hrs

This course is meant to: To help the students learn more about the fundamental public policy questions of the day and the key theoretical and empirical tools of policy analysis in economics; To understand the economic challenge of allocating limited resources among competing uses in

a global economy and across different market structures under conditions of limited information; To understand the role of government in the economy in the context of business activity, income

distribution, economic growth, globalisation and market failure.

UINT 1: Role of Government 10 Hrs

Public sector in the economy-functions; allocation, distribution, public goods, private goods and merit public goods; Market failure- Information asymmetry, Market signaling; Externalities-

basic analysis and Coase theorem-Pigovian taxes

UNIT 2: Public Choice and Public Policy 10 Hrs

Allocation of resources; Private and public mechanism for allocating resources- Problems of preference revelation and aggregation – Voting systems; Arrow‘s Impossibility theorem-

Provision of public goods; Voluntary exchange model and Samuelson‘s impossibility of decentralised provision of public goods; Tiebout model

UNIT 3: Public Expenditure 10 Hrs

Theories of public expenditure; Wagner‘s law of increasing state activities; Peacock Wiseman

hypotheses-Social Cost benefit analysis-Criteria for public investment-Project valuation-Economic reforms and control of public expenditure in India

UNIT 4: Taxation 10 Hrs

Taxes-types; Canons- VAT and GST- Approaches to Equity principle in taxation: Benefit

principle; Ability to Pay Principle- Impact and Incidence of taxation; Modern theory of Incidence- major trends in tax revenue of the central and state governments in India- Tax Reforms in India; Chelliah Committee Report

UNIT 5: Public Debt and Budget 10 Hrs

Classical and Keynesian approaches to public debt; Analytical concepts of public debt; Modern theory of public debt; Sources of public debt; Methods of debt redemption; Principles of debt management and repayment-Growth of India‘s Public debt-Zero based budgeting-Programme

budgeting.

UNIT 6: Fiscal Federalism 10 Hrs

Principles of federal finance - Assignment of Functions & Devolution of Resources and Grants; Vertical and Horizontal Imbalance- Finance Commission- Recommendations of 12th and 13th

Finance Commissions – Economic reforms and centre state financial relations in India

36

References:

1. Dr.Tyagi B.P., Public Finance, Jai Prakash Nath Pub.Meerat, (UP)

2. Musgrave and Musgrave: Public Finance in Theory and Practice (Fifth Edition).

3. H.L. Bhatia. Public Finance (Fifteenth Revised Edition).

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

5. R.K.Lekhi, Public Finance.

6. Buchanan J.M., The public Finances, Richard D. Irwin, Homewood.

7. Jha.R (1998), Modern Public Economics, Routledge, London.

8. Srivastave.D.K., Fiscal Federalism in India, Har Ananad Publication Ltd., New Delhi

37

AGRICULTURAL ECONOMICS

MEC 333

Objectives: 60 Hrs

The course aims to deepen students understanding of how economic theory can be applied to policy problems of agricultural sector; the course explores the economic foundations for public policy analysis related to agricultural issues


Agricultural Economics: meaning, nature and scope; Capital Formation in Agriculture: National and State level analysis; Pattern of agricultural development: regional variations; Sustainable Agricultural Growth: concepts and constraints; Organic farming; Hunger and Malnutrition;

Economics of Food Demand;

UNIT 2: Growth and Technological changes in Agriculture 09 Hrs

Agricultural productivity: comparison with developed countries, Ways and Means for improving crop productivity; Bio Technology: meaning and Scope; Green house technique; Food self

sufficiency: pre independence and post independence; Input supply and distribution: economic aspects of irrigation and fertilizer use; Live stock management; Dairy farming; Contract farming;

Value addition: processing industry; Emerging trends in agricultural technology; UNIT 3: Consumer and Producer Theory in Agricultural Economics 09 Hrs

Utility and demand functions in consumer behavior; Elasticities, Estimation of demands for agricultural commodities and policy implication; Producer theory in agricultural economics;

Structural form approach; Reduced form approach on a supply side: Supply response model; Risk and Insurance;

Unit 4: The State and Policy Environment in Agriculture 13 Hrs

Economic and agricultural situation during plan periods and policy implications; Agriculture

Pricing Policy: Price distortions of policy interventions in agricultural economics; Food security in India and public distribution system; Policies related to major agricultural commodities; Energy needs for agricultural/rural development; Subsidies to expand farm output and income

distribution; Labour mobility and agricultural wage policy; Infrastructural support for agriculture: transport, storage and markets; Price, trade and international assistance; Agricultural

Credit and Indebtedness; Research: education and extension needs; Agricultural taxation; Trade-off between agricultural development and environmental quality;

Unit 5: Agri-food Markets: Perspectives and Issues 09 Hrs

Food market analysis; Structure and organization of agri- food markets: developed countries,

developing countries; Demand for food in international markets; The Marketing Chain: Reta il and Wholesale Markets; Marketing Margins; Market power, concentration and consolidation;

Unit 6: Agriculture in an Interdependent World 11 Hrs

Comparative Advantage, Agriculture and International Trade; Trade Policies, Negotiations and

Agreements; Agriculture and the Macro-economy; WTO and Indian agriculture; Problems of

38

Agricultural Subsidies; Patents; Agricultural Exports: Quantitative Restrictions (QRs) and Non tariff barriers;

References:

1. Ray, D., Development Economics, 1998, Chapters 2, 9, 10, 12, and 16. 2. Von Braun, J, M.S. Swaminathan, and M W. Rosegrant, ―Agriculture, Food Security,

Nutrition, and the Millennium Development Goals,‖ Essay, IFPRI, Washington. DC,

2005. 3. Besley, T. and R. Burgess, ―Halving Global Poverty,‖ Journal of Economic Perspectives,

Vol 17. No 3, summer 2003, pp. 3-22. 4. Trostle, R., ―Global Agricultural Supply and Demand: Factors Contributing to the Recent

Increase in Food Commodity Prices,‖ USDA/ERS WRS-0801, May 2008, Washington,

DC. 5. North, D., ―Institutions, Transaction Costs, and Economic Growth,‖ Economic Inquiry,

1987. 6. Olson, M. Jr., ―Big Bills Left on the Sidewalk: Why Some Nations are Rich and Others

are Poor,‖ Journal of Economic Perspectives, Spring 1996.

7. Lee, R. ―The Demographic Transition: Three Centuries o f Fundamental Change,‖ Journal of Economic Perspectives, Vol. 17, No. 4, Fall 2003, pp. 167-190.

8. Cohen, J., ―Human Population: The Next Half Century‖, Science, Vol. 302, November 14, 2003, pp. 1172-1177.

9. World Bank, ―Demand and Supply Factor in Fertility Transitions,‖ Chapter 4 in

Population and Development, 1994. 10. Hymer, S. and S. Resnick, ―A Model of an Agricultural Economy With Non-Agricultural

Activities,‖ American Economic Review, September 1969. 11. Singh, S. and S., ―Agricultural Household Models, John Hopkins University Press,

Baltimore, 1986, Introduction and Chapter 1.

12. Otsuka, K., ―Efficiency and Equity Effects of Land Markets,‖ Chapter 51 in R. Evenson and P. Pingali, Handbook of Agricultural Economics, Volume 3, 2007, pp2671 – 2703.

13. Townsend, R.M., Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low Income Economies, Journal of Economic Perspectives, Vol 9, no. 3, Summer 1995: 83-102.

14. Morduch, J., ―Income Smoothing and Consumption Smoothing‖, Journal of Economic Perspectives, Vol 9, No3, Summer 1995: 103-114

15. Moyo, S., G.W. Norton, J.Alwang, M. Miah, and M. Deom, ―Peanut Research and Poverty Reduction: Impacts of Vaeiety Research to Control Peanut Viruses in Uganda, American Journal of Agricultural Economics, May 2007, pp.448-460.

16. Thompson, R., ―Globalization and the Benefits of Trade,‖ Chicago Fed Letter 236, March 2007

17. Yotopoulos, Pan, Asymmetric Globalization, Chapter 1 in Yotopoulos and Nugent (Ed), The Asymmetries of Globalization, Routledge: New York, 2007.

18. Schiff, Maurice and Alberto Valdez, ―Agriculture and the Macroeconomy, with emphasis

on developing countries‖, in B.L. Gardner and G.C. Rausser, Handbook of Agricultural Economics, Volume 2A, 2002, Chapter 27, pp. 1421-1454.

19. Bouet, A. ―How Much Will Trade Liberalization Help the Poor? Comparing Global Trade Models, IFPRI Research Brief N. 5, 2006.

39

20. Koo, W. and P.L. Kennedy, ―The Impact of Agricultural Subsidies on Global Welfare,‖ American Journal of Agricultural Economics, 88:2 (December 2006): 1219-1226.

21. Krueger, Schiff, and Valdes, ―Agricultural Incentives in Developing Countries: Measuring the Effects of Sectoral and Economy-Wide Policies,‖ The World Bank

Economic Review, 1988, pp. 255-271. 22. Vaidyanathan, A. (1994), ―Performance of Indian Agriculture since Independence‖ in

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

23. V.M. Rao, (2001), ―The Making of Agricultural Price Policy: A Review of the CACP Reports‖ Journal of Indian School of Political Economy vol. XIII, no. 1, Jan-March.

24. Robert Evenson, Carl Pray and Mark Rosegrant (1999), Agricultural Research and Productivity Growth in India (IFPRI Research Report 109).

25. Gunvant Desai and A. Vaidyanathan (1995), Strategic Issues in Future Growth in

Fertiliser Use in India, Macmillan. 26. Ashok Gulati (2000), ―Indian Agriculture in an Open Economy: Will it Prosper?‖ in

Ahluwalia and Little (eds.), India’s Economic Reforms and Development: Essays for Manmohan Singh, Oxford University Press.

27. Schiff, M. and L.A. Winters, ―Regional Integration Agreements: An Overview,‖ Chap ter

1 in Regional Integration and Development, The World Bank, Washington DC, 2003, pp 1-30.

28. Koo, W., P. Kennedy, and A. Skripnitchenko, ―Regional Preferential Trade Agreements: Trade Creation and Diversion Effects,‖ Review of Agricultural Economics, 28 (3) (2006): 408-415

29. Kelly, T., ―Why Are Developing Countries Still Negotiating? The WTO‘s Successes at the Doha Round, Challenge, Vol 48, No. 3 (May/June 2005): 109-124.

30. Martin, W. and K. Anderson, ―The Doha Agenda Negotiations on Agriculture: What Could They Deliver?‖ American Journal of Agricultural Economics, 88 (5) (2006): 1211-1218.

31. Krugman, P. ―What Should Trade Negotiators Negotiate About?‖ Journal of Economic Literature, March 1997.

32. Calvo, G and F Mishkin, ―The Mirage of Exchange rate Regimes for Emerging Countries,‖ Journal of Economic Perspectives, Vol. 17, No. 4, Fall 2003, pp. 99-110.

33. Fischer, S., ―Exchange Rate Regimes: Is the Bipolar View Correct?‖, Journal of

Economic Perspectives, Vol 15, Spring, 2001, pp 3-24.

34. Mellor, J.W., ―Foreign Aid and Agriculture-Led Development‖, Chapter 3 in C. Eicher and J. Staatz International Agricultural Development, Johns Hopkins, 1998.

40

HEALTH ECONOMICS-THEORY AND PRACTICE

MEC 334

Objectives: 60 Hrs

Health economics is at the interface of economics and the health science. A detailed understanding of the demand for health care and the determinants of health with their interrelations and inter connections are dealt with in this course. A detailed treatment of

economic evaluations are also attempted

UNIT 1: the economics of health care 07 Hrs

Introduction- definition of health, life expectancy and mortality rates, morbidity – important aspects of health care economics: Government intervention, uncertainty, asymmetric knowledge,

externalities- health as a durable good- production of health- lifestyle and health- epidemiology- inter-relation of markets in medical care and health insurance.

UNIT 2: Productivity of medical care 08 Hrs

Marginal and average productivity- productivity changes on the extensive and intensive margin-

measurement of health improvements- Randomized controlled trial data (RCTs), QUALYs, standard gamble and time trade off approaches- medical practice variations on the extensive

margin, Economic appraisal of health care: cost benefit approach-principles of cost benefit approach-process of cost benefit approach

UNIT 3: The Demand for Medical Care 10 Hrs

Indifference curves for health and other goods- effects of increase in income- demand for

medical care- demand curve and illness events- insurance and demand for medical care: co-payments, coinsurance rates, indemnity insurance, deductibles- time costs and travel costs- patients beliefs- role of quality in health care

UNIT 4: Supply of health care 10 Hrs

The firm- inputs, output and cost- hospital as a supplier of medical care- residual claimant- utility function of a not- for-profit hospital: political theory model- hospital costs- long run verses short run costs- hospital cost curves- hospitals in the market place- interaction between hospitals and

patients- a model of equilibrium quality and price- Other hospital‘s quality and output changes- interaction between doctors and hospitals.

UNIT 5: Health Insurance 10 Hrs

The demand for health insurance- the risk-averse decision maker- choosing the insurance policy-

medical care demand elasticity and demand for health insurance: moral hazard- supply of health insurance- stability of insurance market- selection and self- identification: problem of adverse

selection- group insurance- economies of scale- importance of health insurance in developing countries- problems and challenges.

UNIT 6: Role of health care institutions 15 Hrs

International and national health care organizations, Role of public and private health care

institutions in provision of health care

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References:

1. Charles E. Phelps, Health Economics, Routledge Publishers.

2. Alistair Mc Guire, John Henderson and Gravin Mooney, The economics of health care,

Routledge Publishers.

3. William Jack, Principles of Health Economics for Developing Countries, WBI

Development Studies.

4. Karman H.E. , Economics of Health

5. Van Der Gaag and M. Perlman, Health, Economics and Health Economics

6. M. Perlman, Economics of Health and Medical Care

7. M. Grossman, The Demand for Health, A theoretical and empirical investigation

8. Allen C. Goodman and Miron Stano, The Economics of Health and Health Care

9. Schultz T.W. , Investment in Human Capital

10. Phelps C.E. , Health Economics

11. Folland S, Goodman A.C., Miron Stano, The Economics of Health and Heatlth Care

12. Dreze and Sen, India : Economic Development and Social Opportunity

42

POLITICAL ECONOMY OF INDIA

MEC 335

Objectives: 60 Hrs

The core purpose of the course is to contextualize economic discourse through an

interdisciplinary approach. The course introduces the interface between economics and politics.

Secondly it extends this interface to issues of the Indian Economy since independence.

UNIT 1: Introduction & Importance of Political Economy 12 Hrs

Economics and Liberal Theory – Economic Justice and Efficiency – Basics of Marxian Theory

of Surplus Value and Capital Appropriation – The Invisible Hand Debate of the Markets -

Understanding the Problematic Convenience of Money, Banks and Finance – Political Economy

debate of Comparative Advantage versus Imperialism – Introduction to Globalisation and the

Political Economy of the External Sector.

UNIT 2: Introduction to India’s Political Economy 18 Hrs

Origins of Comparative Development: A brief idea – Accommodative Politics and Radical Social Change – Class Conciliation and Class Struggle – Goals of Economic Planning –

Problems of Rapid Industrialisation: The Deceleration in Industrial Growth – Growth in Agriculture and Slow Agrarian Reform.

UNIT 3: Political Economy Debates on Implementation in Indian Economic Planning

12 Hrs

Problems of Implementation – The Crisis to the Socialist Principles and Goals of Planning –

Public Investment and Economic Growth - The Crisis of Planning & Political Stability.

UNIT 4: The Political Economy of Reforms 18 Hrs

Radicalisation of Indian Politics, Class Struggle and the challenge of Redistribution –

Understanding India‘s Economic, Social and Political Conflicts: Autonomy of the State,

Dominance of the Proprietary Class & the Dominant Coalition – Impact of Conflicts: on Public

Mobilisation, on Capital Management and the Democratic Process – Regulatory Mechanism and

the Role of the State.

References:

1. Hahnel, Robin. (2002), The ABCs of Political Economy – A Modern Approach, Pluto

Press. 2. Frankel, Francine R. (2005), India‘s Political Economy – 1947 – 2004 (2nd ed.), Oxford

University Press. 3. Bardhan, Pranab. (2011), The Political Economy of Development in India (12th ed.),

Oxford University Press.

4. Mukherji, Rahul (Eds). (2007), India‘s Economic Transition: The Politics of Reforms Oxford University Press.

5. Caparaso, James A. & Levine, David P. (1992). Theories of Political Economy, Cambridge University Press.

43

6. Weingast, Barry R. & Wittman, Donald A (2008), The Oxford Handbook of Political Economy, Oxford University Press.

44

INTERNSHIP

MEC 335

The students MA Applied are expected to complete an internship with an Academic (Research) institute/NGO/firm during the summer vacation before joining the programme in the third 5 th Semester. This internship provides the students an opportunity to be a part of these productive

enterprises in order to understand the organizational structure and to participate in the work that is being carried out. The students are expected to expand their theoretical understanding to the

practical scenario of production, marketing, distribution and consumption. The students are supposed to identify the productive enterprise of their choice and finalize the same in consultation with the Department. The Department will help the students if they need any

assistance in identifying the organisations. The students are encouraged to intern with an organisations as per their area of interest/specialisation. This internship is evaluated out of 50

marks. Successful completion of the internship will earn the students 2 credits per semester. The students will be evaluated out of 50 marks on a continuous basis, the criteria of which are given below. The students are expected to put in a minimum of 25 days of work with a minimum

spread of 4 weeks commencing from April and completing by May.

45

ELECTIVES

SECURITY ANALYSIS & PORTFOLIO MANAGEMENT

MEC 341A

Objectives: 45 Hrs

This course on Security Analysis and Portfolio Management is provided as an elective subject to

the students of MA (Applied Economics) course and is intended to provide deeper insights into the function of markets, its valuation techniques, the concepts of portfolio management with the

techniques of risk diversification. This would help the students to further their interests in the area of Financial Economics which has emerged as an area for both Academic Research and also for corporate career prospects.

UNIT 1: Basics of Risk and Return including its measures 07 Hrs

Measures of Return and Risk: Computing mean historical returns, calculating expected rate s of return, measuring the risk of expected rates of return and the risk measures for historical returns. Determinants of required rates of return: Risk free rate, risk premium, fundamental risk vs

systemic risk. Relationship between Risk and Return: Security Market Line (SML), movements along SML and changes in the slope of SML.

UNIT 2: Efficient Capital Markets 04 Hrs

Efficient Market Hypothesis- Weak form, Semistrong form and Strong form- its tests and results,

Efficient Markets and Technical analysis, Efficient Markets and Fundamental analysis, Efficient Markets and Portfolio Management.

UNIT 3 09 Hrs

Fundamental Analysis: Economic factors - monetary variables – interest rates- inflation-

exchange rate- fiscal measures- GDP- other economic factors

Industry Analysis: Why industry analysis, the business cycle and industry analysis - evaluating the industry life cycle

Company Analysis: Company analysis versus the valuation of stock, Competition- growth of sales- earnings – dividend policy – restructuring policy – capital gearing- mergers and

acquisition- earning surprise; SWOT analysis - Tenets of Warren Buffet; Analysis of Growth companies

Market Related Factors January effect- noise trading- trends; Economics, Industry and Structural links to Company analysis, Firm‘s competitive positioning

UNIT 4: Technical Analysis 05 Hrs

Underlying assumptions of technical analysis, advantages, challenges, Technical trading rules

and indicators

46

UNIT 5: Security Valuation 05 Hrs

Theory of valuation- stream of expected cash flows, required rate of return, investment decision

process- comparison of estimated values and market prices; Valuation of alternative investments- valuation of bonds, approaches to valuation of equity – why and when to use discounted cash

flow valuation approach, why and when to use the relative valuation techniques, discounted cash flow valuation techniques, Infinite period DDM and growth companies, valuation with temporary supernormal growth, Present value of Operating free cash flows, Present value of free

cash flows to equity. Relative valuation techniques: Earnings Multiplier model, Price/Cash flow ratio, Price/Book value, Price/Sales ratio.

UNIT 6: Portfolio Management 08 Hrs

Risk aversion, definition of risk, Markowitz Portfolio Theory-alternative measures of risk,

expected rates of return, variance of returns for individual investment and for a portfolio, Standard deviation of a portfolio, a three asset portfolio, efficient frontier. Capital Market Theory

– background and assumptions for Capital Market Theory, Risk free asset, The Market Portfolio, CAPM, SML, relaxing assumptions for CMT, Arbitrage Pricing Theory- empirical test for APT, Multifactor Models

UNIT 7: Equity Portfolio Management Strategies & Evaluation of Portfolio performance

04 Hrs

Passive vs Active Management, Index portfolio construction techniques, tracking error, methods of index portfolio investing, an overview of active equity portfolio management strategies-

fundamental strategies and technical strategies, anomalies and attributes. What is required of a portfolio manager, Treynor Portfolio Performance measure, Sharpe

Portfolio Performance measure, Jensen Portfolio Performance measure, The information ratio performance measure, application of portfolio performance measures.

UNIT 8: Asset Management 03 Hrs

Organization and Management of Asset Management Companies, Characteristics of Hedge

Funds, its strategies and performance

References:

1. Investment Analysis and Portfolio Management by Reilly / Brown, 8e, Thomson

2. Investments by Bodie, Kane & Mohanty,6e, TMH

3. Investments Analysis and Management by Charles P Jones, Wiley

47

ECONOMICS OF INCLUSIVE DEVELOPMENT

MEC 341B

Objectives: 45 Hrs

The course by using economic theory and analysis trains the students to understand how gender and caste differences lead to differences in outcomes with respect to education, career, earnings and roles in the family and how such differences impact female mortality, fertility, economic

status and work participation.


Historical and current trends in wages, occupational patterns and unemployment rates by gender and caste- Economic explanations for gender and caste based disparit ies in the labour market-

Empirical evidence from economic literature- Gender budgeting: Meaning, scope and data types.

UNIT 2: Theories of Market Discrimination 10 Hrs

Personal –prejudice models: Employer, Customer and Employee discrimination- Statistical discrimination- Non-competitive models of Discrimination- Measures taken to eliminate

discrimination- Gender-caste development index- Intersections of gender and caste.

UNIT 3: Women and the Economy 15 Hrs

Overview of marriage and family structure; The economics of marriage, Production, specialization and gains to marriage, Supply and demand model of marriage, changes in demand

and supply, Marriage and the earnings of men, Divorce and its consequences- Decision making by women; Factors affecting decision making by women, property rights, access to and control

over economic resources, assets; Power of decision making at household, class, community level; Economic status of women and its effect on work-participation rate, income level, health, and education in developing countries and India.

UNIT 4: Women’s Work and Pay 10 Hrs

Concept and analysis of women‘s work: Valuation of productive and unproductive work; visible and invisible work; paid and unpaid work; economically productive and socially productive work – Women‘s labour force participation; Economic model of women‘s labour force participation –

Effect of changes in wages, income and household productivity- The gender gap in earnings- Occupational segregation – gender differences in education – economic analysis of gender gap in

earnings Course Text:

1. Thorat and Newman (2009), Blocked by Caste: Economic Discrimination in Modern India, Oxford University Press.

2. Hoffman and Averett (2007), Women and the Economy: Family, Work and Pay, Prentice Hall Publications.

References:

1. Amsden, A.H. (ed.). (1980). The Economics of Women and Work , Penguin,

Harmondsworth.

48

2. Becker, Gary. (1971), Economics of Discrimination, 2nd edition, University of Chicago Press.

3. Boserup, E. (1970). Women’s Role in Economic Development, George Allen and Unwin, London.

4. Engles, F. (1985). The Origin of the Family, Private Property and the State, Progress Publications, Moscow.

5. Kabeer, N. (1994). Reversed Realities: Gender Hierarchies in Development Thought,

Kali for Women, New Delhi. 6. Krishnaraj, M., R.M. Sudarshan and A. Shariff (1999). Gender, Population and

Development, Oxford University Press, New Delhi. 7. Kuhn, A. and A.N. Wolpe (eds.). (1978). Feminism and Materialism, Routledge and

Kegan Paul, London.

8. Mies, M. (1998). Patriarchy and Accumulation on a World Scale: Women in the International Division of Labour, Zed Books, London.

9. Mitra, A. (1979). Implications of Declining Sex Ratio in India’s Population, Allied, New Delhi.

10. Sen, G. and K. Brown (1987). Development, Crises and Alternative Visions, Monthly

Review Press, New York. 11. Seth, M. (2000). Women and Development: The Indian Experience, Sage Publications,

New Delhi. 12. Agnihotri, S.B. (2000). Sex Ratio in Indian Population: A Fresh Exploration, Sage

Publications, New Delhi.

13. Desai, N. and M.K. Raj (eds.). (1979). Women and Society in India, Research Centre for Women Studies, SNDT University, Bombay.

14. Dwyer, D. and J. Bruce (eds.). (1988). A Home Divided: Women and Income in the Third World, Standard University Press, Stanford.

15. Government of India (1974). Towards Equality Report of the Committee on the Status

of Women in India, Department of Social Welfare, Ministry of Education and Social Welfare, New Delhi.

16. ILO (1978). Women’s Participation in the Economic Activity of Asian Countries, ILO, Geneva.

17. Papola, T.S. and A.N. Sharma (eds.) (1999). Gender and Employment in India, Vikas,

New Delhi. 18. Schultz, T.P. (1988). ―Education Investments and Returns‖, in Chenery, H.B. and T.N.

Srinivasan, The Handbook of Development Economics, North Holland, New York. 19. Seth, M. (2000). Women and Development: The Indian Experiences, Sage Publications,

New Delhi.

20. Yong, K. et al. (eds.). (1987). Serving Two Masters, Routledge and Kegan Paul, London.

49

SEMESTER IV

OPERATIONS RESEARCH

MEC 431

Objectives: 60 Hrs

This course introduces students to the theoretical framework of operations research models. The

course is intended to provide an in-depth understanding of the methodology of OR and its applications in diverse fields in making effective decision making.

UNIT 1: Introduction to Operations Research 03 Hrs

Brief history- stages of development- definitions- OR tools.

UNIT 2: Linear Programming 10 Hrs

Fundamentals of L P models - Graphic solutions of LP models – feasible solutions- infeasible solutions- unbounded solutions- Maximization of Objective Functions - Minimization of Objective Functions - Simplex Method with two variables- Simplex Method with more than two

variables

UNIT 3: Transportation Problems 10 Hrs

Transportation algorithm- Basic feasible solution of TP- North West Corner Rule- Least Cost method- Vogel‘s Approximation Method – Optimality test- Stepping Stone method – Modi

method

UNIT 4: Assignment Model 05 Hrs

Assignment problem structure and solution- maximization in assignment problem crew assignment problem

UNIT 5: Net Work Models 07 Hrs

PERT/ CPM Determination of Earliest Expected and Latest Allowable Times - Determination of Critical path – PERT Cost- Scheduling of a project- Application of PERT- Critical Path Method- Problems

UNIT 6: Waiting Lines 05 Hrs

Structure of Queuing models- Waiting Line models

UNIT 7: Inventory Management Models 05 Hrs

Basic Features of inventory decisions- EOQ- Quantity discounts- EPQ models- ABC Analysis

UNIT 8: Game Theory 05 Hrs

Basic concepts-definition- managerial applications- two-person‘s zero-sum games.

References:

1. C. R. Kothari, Quantitative Techniques, Vikas Publications, New Delhi.

2. W.J. Baumol, Economic Theory and Operation Analysis, Englewood Cliff, Prentice Hall, NJ.

50

3. Ackoff R L and Saienni M W, Fundamentals of Operation Research, Wiley, New York. 4. Hadley, G. Linear programming, Addison Wiley, Massachusetts.

5. Morse P M, Queeing, Inventory and maintenance, Wiley, New York. 6. Srivastava U.K, Shenoy G. V, and Sharma S C, Quantitative Techniques for Management

Decisions, Wiley Eastern, New Delhi.

51

ECONOMICS OF LABOUR MARKETS

MEC 432

Objectives: 60 Hrs

Analyze the various factors influencing the demand and supply of labour in an economy in wage and employment determination; to understand the implications of economic and political institutions in influencing wages and employment; To understand the present state of industrial

relations and social security in the country.

UNIT 1: Introduction to Labour Economics 10 Hrs Labour as a unique factor of production; Labour Market outcomes- Changing level and composition of labour supply and labour demand, structure of earnings, labor management

relations and collective bargaining, level and composition of unemployment; Labour market process- market forces, institutional forces and sociological forces; Evolution of labour market

theory- the Neoclassical school and the Institutional school. UNIT 2: Labour Market Analysis 15 Hrs

Supply of labour: The Theory of Labour Leisure Choice; Hours of work and Non labour income; Substitution and Income effects of Wage change; Labour force participation rates-

Changes in male and female work participation rates; Household Model of Labor Supply- Life Cycle Allocation of Time, Bargaining Model of Family Labour Supply; Effects of Social Programs and Income transfers on Labour Supply.

Demand for Labour: The Marginal Productivity Theory of Labour Demand; The Elasticity of

demand for labour - Hicks-Marshall rules of derived demand for labour; Consumer expenditure patterns and labour demand; Labour demand over business cycles; Labour demand in the long run- Equilibrium level of employment with isocosts and isoquants; Technological change and

labour demand.

UNIT 3: Wage Determination 15 Hrs

Wage determination in competitive markets; Wage determination in monopsony market; Minimum wages- Effect on wage and employment determination in competitive and monopsony

markets; Segmentation and Dual Labour Market Theory; Wage differentials- Education, Training and Earnings Differential- The Theory of Human Capital, Costs and benefits of college

education and On-the-Job training- Occupational Wage differentials; Theory of Compensating Wage Differentials; Earnings differentials by Gender- Wage and wage share in post-reform India.

UNIT 4: Employment 10 Hrs

Measurement of unemployment; Conceptual issues- Causes of unemployment; Job search theories- Stigler Model, McCall Model- Rigid wages- Efficiency Wages, Labour force participation rates in India, Unemployment trends in India- Sectoral employment trends in India:

Rural-Urban, Organised- Unorganised, Public-Private.

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UNIT 5: Trade Unions and Collective Bargaining 10 Hrs

Demand for union services- Costs and benefits of union membership- Supply curve of union

membership- Equilibrium level of union membership- Union-management bargaining process: A model of bargaining process- Outcomes of bargaining process- Methods of dispute resolution-

Dimension of union wage effect - Measuring the union-nonunion wage differential- Union impact on nonwage outcomes.

References:

1. Kaufman and Hotchkiss, Labour Market Economics, Cengage Learning, 2003.

2. Cahuc, Pierre, and Zilberberg, Labour Economics, Cambridge, Mass. and London: MIT Press, 2004.

3. McCOnnell, Capbell R., and Stanley.L.Brue, Contemporary Labour Economics,

McGraw-Hill Book Co., 2009. 4. Ashenfelter, Orley, and Richard Layard. (1990), The Handbook of Labor Economics.

Vol. 1 and 2. New York: North-Holland. 5. Helfgott, Labour Economics, (New York: Random House 1974) 6. Reynolds, Lloyd. Labour Economics and LabourWelfare (1978), New Delhi: Prentice

Hall of Inida Pvt. Ltd. 7. Sepsfore, David and Zafiris Tzannatos. (1990), Current Issues in Labour Economics

8. Hong Kong ,Macmilan 9. Singh, V.B and Saran, A.K. (1990), Industrial Labour in India Mumbai: Asia Publishing

House

10. Verma, Pramod. Labour Economics and Industrial Relations New Delhi: Tata McGraw Hill Pvt. Ltd.

11. Datt, G. (1966), Bargaining Power, Wages and Employment: An Analysis of Agricultural, Labour: Marketsin India; Sage Publishers, New Delhi.

12. Hajela, P.D. (1998) , Labour Restrucing in India : A Critique of the New Economic

Policies , Commonwealth Publishers, New Delhi. 13. Jhabvala, R.and R.K. Subrahmanya (Eds.) (2000), The Unorganised Sector : Work

Security and Social Protection ; Sage Publications, New Delhi 14. Lester, R.A. (1964) , Economics of Labour (2nd Edition), Miacmillan, New York. 15. Papola, T.S., P.P. Ghosh and A.N. Sharma (Eds.) (1993), Labour, Employment and

Industrial Relations in India, B.R. Publishing Corporation, New Delhi. 16. T.N. Srinivasan (Eds.) The Handbook of Development Economics, North-Holland, New

York. 17. Venkata Ratnam, C.S. (2001) , Globalization and Labour – Management Relations :

Dynamics of Changes , Sage Publications/Response Books , New Delhi

18. Punekar, Deodhar and Sankaran, Labour Welfare, Trade Unionism and Industrial Relations (1974), Himalaya Publishing House, New Delhi

19. Tyagi B.P., Labour Economics and Social Welfare (2011), Jai Prakash Nath and Co.

53

ECONOMICS OF INDUSTRIAL ORGANISATION

MEC 433

Objectives 60 Hrs

To present the fundamental models of the firms’ behaviour under different market structures. To impart the knowledge of how the firms interact in different markets and the effects of their interactions for the social welfare.To provide a thorough knowledge about the economics of

industry in a cogent and analytical manner, particularly in the Indian context. To make the students aware of the basic issues such as productivity, efficiency capacity

utilization involved in the industrial development of India. UNIT 1: Firm’s Behaviour and Market Concentration 15 Hrs

Market structure – conduct performance paradigm – Sources of monopoly power-Effects of monopoly on social welfare- Natural monopoly; Price and non-price regulation of natural

monopoly-Anti monopoly policy- Price Discriminating Monopoly-Types of price discrimination: general overview- Welfare effects of price discrimination- Market concentration and monopoly power – Causes and measurement – Market concentration and performance – Extent of market

concentration in India – Recent trends – The Firm: Emergence and its objectives - Non -profit maximizing models- Case studies on Market concentration and Natural Monopoly

UNIT 2: Vertical Integration, Diversification and Mergers 8 Hrs

Mergers and take over: Concepts, motives and consequences- Cross border M & A-

Diversification-Vertical Integration: Nature and extent of vertical integration, monopolistic motives for integration – Case studies on M & A

UNIT 3: Industrial Finance and Pricing Decisions 10 Hrs

Sources (internal and external) – Financial Statements – Analysis of financial ratios and their

interrelatedness, Problems of financial analysis- General considerations for pricing decisions-Cost plus pricing, Incremental cost pricing, Acceptance pricing, going rate pricing and transfer

pricing; Predatory pricing - Public policy towards predatory pricing- Profitability and its determinants

UNIT 4: Industrial Productivity and Efficiency 10 Hrs Industrial Productivity- norms and measurement; Factors affecting productivity and capacity

utilization ; Importance of productivity in the competitive environment; .Measures required for improving productivity and efficiency- Case studies on Productivity

UNIT 5: Theory of the Firm & Industrial Location Analysis 10 Hrs

The behavioural theory of the firm; Transaction cost theory; the property Right Theory; The

Agency Theory and the Resource Based Theory- Factors Influencing Location of Industries. -Theories of Industrial Location, Weber, Sargent Florence; Need for Balanced Regional Development of Industries - Industrial location trends in India

UNIT 6: Government Regulation of Industry 07 Hrs

Industrial Imbalance Causes and Measures-Need for Balanced Regional Development of

54

Industries - Industrial location trends in India - Need for govt intervention in industry- Ways of govt regulation-Industrial regulations in India.

Course Texts:

1. Barthwal, R.R. (2010). Industrial Economics: An Introductory Text Book, New Age International, ND.

2. Industrial Organization: Contemporary Theory and Practice, Pepall, Lynne; Daniel J.

Richards; George Norman. 2nd.ed South-Western. 2002. 3. Hay and Morris D. J. (Latest), Industrial Economics- Theory and Evidence, Oxford

University 4. Industrial Economics, B.N.Narayan, Anmol Publications Pvt. Ltd. 5. Ahluwallia, I.J. (1992): Industrial Growth in India, OUP, Delhi.

References:

1. Applied Industrial Economics, Ed. By Lois Phlips. Cambridge University Press. 1998. 2. Industrial Organization- A Strategic Approach, Church J. R, Ware R. Irwin, McGraw

Hill. 2000.

3. Organisation, Theory and Applications, Oz Shy, MIT Press 1995 4. Singh A and A.N.Sadhu (1988) Industrial Economics, Himalaya Publishing House,

Mumbai 5. Francis cherunilam (1994) Industrial Economics,Tata McGraw-Hill publishing company

limited,NewDelhi.

ENVIRONMENTAL AND RESOURCE ECONOMICS

55

MEC 434

Objectives: 60 Hrs

This course aims at a detailed treatment of the linkage between environment and the natural

resource endowment. The economics of exhaustible and renewable resources and their linkages with development also is dealt with in this paper. A detailed understanding of the methodology of economic evaluation is expected from the student

UNIT 1: Basic Concepts 05 Hrs

An introduction to Environmental Economics; Economy - Environment interaction; The Material Balance principle, Entropy law

UNIT 2: Environment Vs Development 05 Hrs

Relation between development and environment stress; Environmental Kuznet's curve

UNIT 3: Economics of Exhaustible Resources 10 Hrs

Hotelling's rule; Solow-Harwick's Rule; Market structure and optimal extraction policy;

Uncertainty and the rate of resource extraction; Resource scarcity

UNIT 4: Economics of Renewable Resources: 10 Hrs

Economic models of forestry and fisheries; Extinction of species; Economics of Biodiversity

UNIT 5: The Theory of Externality and Public Goods 10 Hrs

Concepts; Market Failure; Pigouvian Solution; Buchanan's Theory; Coase's theorem and its critique; Pigouvian vs. Coasian solution; Detrimental externality and non-convexities in the production set; Property rights; Collective action

UNIT 6: Techniques of Valuation 20 Hrs

Market and non-market valuation; Physical linkage methods; Abatement cost methods; Behavior

linkage methods - Revealed and stated preference; Social cost benefit analysis; Environmental impact assessment.

References:

1. Hanley, N, J.F. Shogren and B. White. Environmental Economics in Theory and

Practice.New York: MacMillan, 1997

2. Arrow, K. J. and Scitovsky, T. Readings in Welfare Economics - Part III. Richard Irwin

Inc, 1969.

3. Bromely, D. W. (Ed.). Handbook of Environmental Economics. Blackwell, 1995

4. Jempa, C. and Munasinghe, M. Climate Change Policy: Facts, Issues and Analyses.

Cambridge: Cambridge University Press, 1998

5. Kolstad, Charles, Environmental Economics, OUP, 2000

6. Sankar, U. (Ed.). Environmental Economics (Readers in Economics), OUP, 2000

7. Coase, R. H. "The Problem of Social Cost", in Breit, W. and Hochman, H.M. (eds.)

Readings in microeconomics. Rinehart and Winston Inc., 1968.

56

8. Cropper, M. L. and Oates, W. E. "Environment economics: A survey". Journal of

Economic Literature, June 1992.

9. Dasgupta, P and Heal, G. M. Economic Theory and Exhaustible Resources. Cambridge:

Cambridge University Press, 1979.

10. Field, B. C. Environmental economics: an introduction. New York: McGraw Hill, 1994.

11. Fisher, A. C. "Environment and resource economics", in Oates, W.E. (ed.) New horizons

in environmental economics: selected readings. Cheltenham, U.K.: Edward Elgar, 1995.

12. Hardin, G. "The tragedy of commons", in Markandya, A. and Richardson, J. (eds.)

Earthscan reader in environmental economics. London: Earthscan Publications, 1993.

13. Oates, W. E. Economics of the environment. Cheltenham, U.K.: Edward Elgar, 1992.

14. Perrings, Charles. "Ecological resilience in the sustainability of economic development",

in Sylvie, F., Pearce, D., and Proops, J. (eds.) New horizons in environmental economics:

model of sustainable development. Cheltenham, U.K.: Edward Elgar, 1996.

15. World Bank. Development and the environment. World Development Report series.

Washington, D. C.: World Bank, 1992.

.

DISSERTATION

MEC 435

57

DESCRIPTION

This paper is a compulsory paper in the fourth semester of post graduate course in Applied Economics. Through this paper students undertake an original research work based on the area

of his/her interest and academic leaning in the previous semesters. This also becomes a thorough training in the nuances of analytical and research skills.

Objectives:

To inculcate in students the rigour of research work; To imbibe in students the spirit of inquiry;

To encourage students to do academic reading of journal articles; To be informed about new

developments in the field of economics research.

Methodology

The dissertation work is carried out under the guidance of a faculty with scheduled meetings for discussion of the progress of the work and timely interim presentations before a panel of faculty to assess the quality of the work. The final submission of the dissertat ion is followed by a viva

voce on the topic of the research.

1. Evaluation at the end of the semester is based on the following categories:

2. Regularity of meeting with guide for discussions 25% weightage

3. Presentation of the synopsis by student 10 weightage

4. Mid-term review by student 15% weightage

5. Final submission of the dissertation and viva voce 50%

.

ELECTIVES

INTERNATIONAL FINANCE

58

MEC 441A

Objectives: 60 Hrs This course aims to explore the issues and problems and applications that arise from

international financial trading relations between nations. In globalized economy students of economics requires a thorough knowledge and understanding of the complexities in international finance. The course covers different international financial orders that existed in

the globe. Topics such as organization of foreign exchange markets, determination of exchange rates, the fundamental principles of international finance, foreign exchange risk and exposure

are also covered. UNIT 1: An Overview of International Financial System – Past - Present and Future15 Hrs

Financial Order in 1870-1914 – Interwar period 1919-1939 – Bretton Woods era 1945-1971 – International Monetary Fund - Washington Consensus 1971 –Basel Accords - Understanding

Currency Crisis - East Asian Crisis – Euro Zone Crisis – Global Financial Crisis - Towards a New Financial Word

UNIT 2: Foreign Exchange Market 10 Hrs

Participants in Forex Market – Alternative Exchange Rate Regimes –Forward Exchange Rate –

interaction of hedgers, arbitrageurs and speculators - Flexible Exchange Rate Regime – Pegged float – Fixed Float – Managed Float - Market Size and Liquidity –Determinants of Foreign Exchange Rates – Economic Factors – Technical Trading Considerations – FCCB - Euro Bonds

– ADRs – GDRs – IDRs

UNIT 3: Foreign Exchange Risk and Exposure 15 Hrs

Nature of exchange rate risk and exposure – real changes in exchange rate – Forex Exposure – Transaction Exposure – Translation Exposure – Operating Exposure – Exposure Netting –

Currency Risks - Currency Swaps – Forex Beta – Operational Hedging – Financial Hedging – Management of Economic Exposure – Forex Exposure for MNCs- Money market Hedge - Cost

of forward hedging – benefits of forward hedging – payoff profiles of different hedging technics – company hedging policy – exchange rate forecasting and speculation

UNIT 4: Forex Regulatory Framework 10 Hrs

Foreign exchange regulation Act (FERA) – Foreign exchange Management Act (FEMA) – Forex

Management Strategy – Monetary Policy Interventions –BoP and Forex Rate – International Capital Flows – currency convertibility - Foreign Remittances, FII & FDI in Forex Markets

UNIT 5: Currency Derivatives 10 Hrs

Currency Futures, Options and Swaps - Forward Contract – Spot Forward Parity – Cost of Carry

– Forward Pricing Formula – Margin Trading – Currency Derivatives - Futures Contracts – Using Currency Futures for Hedging – Interest Rate Futures - Currency Option – Contract Specification – Option Styles – Black Sholes – Stochastic Volatility – Monte Carlo Models –

Counter Parity Risk – Option Strategies – Swap Market – Interest Rate Swaps – Currency Swaps- Equity Swaps – Commodity Swaps – Libor – Credit Default Swap– Arbitrage

References

59

1. Keith Pilbeam, International Finance, Palmgrave Macmillan, New York, 2006.

2. Maurice D Levi, International Finance, Routledge, New York, 2008.

3. Walden Bello, Nicolla Bullard & Kamal Malhotra, Global Finance – New thinking on

regulating speculative Capital Markets, Zed books, London, 2002.

4. Banerjee B.J, International Finance Theory and Practice, Centrum Press, New Delhi,

2010.

5. A Lakshmana Swamy, Financial Sector Reforms, Excell Books, New Delhi, 2008.

6. James Hanson, Patrick Honohan, Giovanni Majnoni, Globalisation and National

Financial Systems, World Bank, Washington, 2003.

7. Mark Mobius, Foreign Exchange – an Introduction to the core concepts, Masterclass

Series, John Wiley and Sons, 2009.

8. Solomon Robert, the International Monetary system an Insider‘s view, Harper and Row,

New York, 2009.

9. Spiegel, Mark M, Argentina‘s Currency crisis: Lessons for Asia ( online).

10. Oberlechner Thomas, Psychology of the Foreign Exchange Market, Chichester, John

Wiley and Sons, 2004.

11. Messe Richard and Rogoff Kenneth, Empirical Exchange rate models of the Seventees:

do they fit out of sample, jopurnal of International Economics, 1983.

12. Calvo G, Capital inflows and Macreconomic Management: Tequila lessons, International

Journal of Finance and economics, Vol 1 pp 07-23.

13. Lietaer Bernard, The future of Money: Creating New Wealth, work and wiser World,

Random House, London, 2001.

14. Corsetti G, Paper Tigers: a Model of the Asian Crisis, European Economic Review, vol

43, pp1211- 36. 15. Flood R.P and Garber, P.M. Collapsing Exchange rate Regime: Some linear Examples,

Journal of International Economics, Vol 16, pp1-13.

REGIONAL AND URBAN ECONOMICS

MEC 441B

60

Objectives: 45 Hrs

To acquaint the student with the underlying theories, propositions and problems of regional

economies and methods of analyzing them; The course will equip the student with the basic theoretical premises and analytical tools that are used by an urban economist.

UNIT 1: Regional Economics – An introduction 04 Hrs

Nature and scope of regional economics - Roots of regional economics- Different types of

regions- indicators of regional development

UNIT 2: Location Theory and Economic Activity 08 Hrs

Dynamics of Market areas- Transfer oriented firm; Resource oriented firm; market oriented firms- principle of median location – labour markets and locational choices - Locational

interdependence; Hotelling Phenomena- Market area analysis; Central place theory

UNIT 3: Theory of Land Use Pattern and Income Models 07 Hrs

Land rent, contract rent and economic rent- Urban land use patterns- Monocentric and Polycentric Models of land use- PPC and economic growth-comparative advantage; demand

based models; Economic Base theory

UNIT 4: Regional Growth Analysis 10 Hrs

Agglomeration economies- localization in economies- urbanization economies- Neoclassical growth theory- Endogenous growth theory- Product life cycle and firm location-staple theory of

economic development

UNIT 5: Regional Labour Markets and Migration 09 Hrs

Labour market structure; regional wage differentials- Urban education problem: education production function; Causes and consequences of low educational achievement in central cities-

Migration; costs and benefits of human migration; impact of migration; empirical aspects.

UNIT 6: Inter-regional Differentials and Regional Imbalance in India 07 Hrs

Agriculture, Industry, Physical infrastructure, Social Sector- Regional characteristics in India and imbalances – Regional development programs: impact and policies to reduce imbalances in

India; Committee recommendations.

References:

1. Mary E. Edward, (2012), Regional and Urban Economics and Economic development: Theory and Methods, Auerbach Publications, Taylor and Francis Group.

2. Philips McCann (2011) Urban and Regional Economics, Routledge. 3. O‘Sullivan, A. (2002) Urban Economics, McGraw-Hill Irwin.

4. Harvey Armstrong and Jim Taylor (2000) Regional Economics and Policy, 3rd edition, Blackwell Publishing

5. Todaro Michael P Internal Migration in Developing Countries a Review of Theory

Evidence Methodology & Research Priorities, ILO Geneva 6. Shukla, V. (1996) Urbanization and Economic Growth, Himalaya Publishers Pvt. Ltd.

7. Bidyut Mohanty (1993) Urbanization in Developing Countries Basic Services and community Participation,

61

8. Institute of Social Science, Concept Publishing House. 9. Hoover, E.M. (1974), An Introduction to Regional Economics, Alfred A. Knopf, New

York. 10. Brahmananda, P.R. and V.R. Panchmukhi (Eds.) (2001), Development Experience in the

Indian Economy: Inter- State Perspectives, Bookwell, Delhi. 11. Beckman, M. (1968), Location Theory, Random House, London. 12. Dholakia, R.H. (1985), Regional Disparity in Economic Growth in India, Himalaya

Publishing House, Bombay. 13. Friedman, J. and W. Alonso (Eds.) (1975), Regional Policy, Readings in Theory and

Application, MIT Press, Cambridge, Mass. 14. Glasson, J. (1975), An Introduction to Regional Planning: Concepts, Theory and Practice,

Hutchison, London.

15. National Bureau of Economic Research (1957), Regional Income, Princeton University Press, Princeton.

16. Rao, H. (1984), Regional Disparities and Development in India, Ashish Publishing House, New Delhi.

17. Seth, V.K. (1987), Industrialization in India: A Spatial Perspective, Commonwealth

Publishers, New Delhi