IIS University - International College for Girls - ICG Courses

M.A. (Economics)

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Duration: 2 Years

Eligibility: Graduation or Equivalent

Course Syllabus

Semester - I

ECO 121: Micro Economic Theory - I

Objectives: To acquaint the students with the behaviour of an economic agent, namely a consumer and a producer in a comparative static and partial equilibrium framework.

Unit  I

Demand Analysis

Utility theory – Ordinal approach -Indifference curve (income and  substitution effects, Slutsky theorem, compensated demand curve) and their applications; Revealed preference theory; Revision of demand theory by Hicks; Characteristics of goods approach (Lancaster); consumer’s choice involving risk (N-M hypothesis) – Friedman-Savage, Markowitz hypotheses; indirect  tility functions (duality theory); Recent developments in demand analysis (pragmatic approach and linear expenditure systems); Inter-temporal consumption; Elementary theory of price formation – demand and supply equilibrium; Cobweb theorem; lagged adjustment in interrelated  markets.

Unit  II

Theory of Production and Costs

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 – Empirical evidence; Derivation of cost functions from production functions; derived demand for factors.

Unit  III Price and Output Determination –Perfect competition and Monopoly

]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.

Unit  IV Monopolistic Competition and Oligopoly Models

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; Workable competition – Structure, conduct and performance norms – Concept of Contestable Market and global competition (Baumol).

Unit  V Alternative Theories of the Firm

Critical evaluation of marginal analysis; Baumol’s sales revenue maximization model; Williamson’s model of managerial discretion; Marris model of managerial enterprise; Full cost pricing rule; Bain’s limit pricing theory and its recent developments including Sylos-Labini’s model; Behavioural model of the firm; Game theoretic models.

 

ECO 122:   Macro Economic Theory - I

Objectives: To acquaint the students, with the concepts of macro economics.

Unit  I

National Income

Circular flow of income in two, three- and four-sector economy; National income aggregates – measurement and interrelationship; National income and welfare.

Unit  II

Classical Macro Economics

Simple Classical model –equilibrium output and employment; Quantity Theory of Money; Classical theory of interest rate; policy implications of the Classical equilibrium model; Classical model with savings and investment.

Unit  III

The Keynesian System

Equilibrium in the Product Market – The aggregate demand and aggregate supply approach, Savings- Investment approach; Changes in equilibrium income – the Multiplier; The Keynesian theory of interest rate and money demand.

Unit  IV

Consumption Function

Keynes’ psychological law of consumption; short run and long run consumption function; Income consumption relationship – absolute income, relative income, life cycle and permanent Income hypothesis; consumption function puzzle; Kuznets’ consumption function and Kuznets’ findings.

Unit  V

Investment Function

Components of investment; marginal efficiency of capital and investment; accelerator and investment behaviour.

 

ECO 123: Mathematical Methods For Economic Analysis

Objective: To understand the applications of mathematics in economic theory.

Unit  I

Terminology, Concepts and tools

Constants, variables, parameters, intercepts Coefficients-Functions-inverse, general and specific functions-Equations-Applications-Demand and supply functions-Cost and revenue functions-Consumption function-IS & LM functions- Multivariable functions-Market equilibria.

Unit  II

Differential Calculus

Rules of differentiation-slopes-linear and non linear functions-partial derivatives-higher order derivatives-Young’s Theorem- Constrained & unconstrained optimization- Lagrangian Multiplier-Interpretation-Use of derivatives in economics –Maximization, minimization, elasticities – Utility function – production function – revenue, cost and profit functions (simple problems).

Unit  III Integration

Concept-simple rules of integration-application to Consumer’s surplus & producer’s surplus-Costs & revenues.

Unit  IV Matrices

Fundamentals of linear algebra-matrix, solving equations- Crammer’s rule-Uses-Input-output analysis.

Unit  V Linear Programming

Basic Concepts, formulation of an LP problemfeasible, basic and optimal solution-graphic and simplex methods-formulation of the dual of a programme and its interpretation-Applications of LP technique.

 

ECO 124: Indian Economy-I

Objective: To understand the various issues related to Indian economy.

Unit  I

Economic development and its Determinants

• Economic Growth & Economic Development
• Characteristics of Developing Economies
• Role of Economic & Non Economic Factors in Economic Development
• Human Development: PQLI, Human Development Index, Gender Related Development Index, Gender Empowerment Measure & Human Poverty Index

Unit  II

Demographic Features & Infrastructure

• Population Growth
• Occupational Structure
• Rural-Urban Migration
• National Population policy (2000)
• Energy
• Social Infrastructure-Education and Health

Unit  III Important Issues

• Poverty
• Inequality
• Unemployment
• Regional Imbalances
• Parallel Economy

Unit  IV Foreign Trade

• Composition and Direction
• Balance of Payments
• Foreign Capital and Aid
• Export Import policy
• Foreign Trade policy

Unit  V National Income, Planning and Economic Reforms

• National Income : Growth & Structure
• Planning In India : Objectives, Strategy, Failures & Achievements
• Tenth and Eleventh Five Year Plans
• Economic Reforms

 

ECO 125: Public Economics - I

Objective- To develop an understanding of Public Economics among students.

Unit  I

Introduction

• Nature and scope of Public finance
• Role of Government Changing Perspective
• Role of the Government in a Capitalist, Mixed and Socialist Economy
• Fiscal functions of the government : Allocation, Distribution & Stabilization
• Government as an agent for Economic Planning and Development
• Private and Public sector : Cooperation or Competition
• Private goods, Social goods & Merit goods

Unit  II Public choice and rationale for public policy

• Market failure: Imperfections, Decreasing costs, externalities, Uncertainty
• Problems for allocating resources: Problems of preference revelation, voting systems, Arrows impossibility theorem, An economic theory of democracy, political-eco-bureaucracy, Rent seeking and directly Unproductive profit seeking (DUP) activities.
• Allocation of resources: Provision of public goods, Voluntary exchange models, Impossibility of decentralized provision of public goods( Contributions of Samuelson and Musgrave)
• Demand revealing schemes far public goods(Tiebout model), Theory of clubbed goods

Unit  III Taxation I

• Taxation: Meaning, canons, classification
• Tax ratio, Buoyancy, Elasticity
• Optimal Taxation, Excess Burden of Taxes, Tax Neutrality
• Effects of Taxation, Trade off between Equity and Efficiency
• Taxable Capacity : Meaning, Types, Measurement & Determinants

IV Taxation II

• Double Taxation
• Incidence of Taxation
  • Meaning & Distinction between Impact & Incidence
  • Types & Theories of Tax Incidence
  • Shifting of tax under different Cost conditions
  • Shifting of tax under different market conditions (Perfect Competition & Monopoly)
  • Forward & backward shifting
• Principles of taxation: The Benefit approach, Ability to pay approach
• Trends of Taxation in India

Unit  V Public Expenditure

• Public expenditure: Meaning, nature & classification
• Wagners Law of Increasing State Activities
• Wiseman Peacock Hypothesis
• Pure Theory of Public Expenditure
• Effects of Public expenditure
• Trends of Public expenditure in India

 

ECO 126: Seminar

Objective :

 To create awareness regarding current trends, issues and research as related to various aspects of economics. Students will be assigned a topic in the beginning of the semester. They will be required to prepare and submit a project report on the same. A panel of external examiners will evaluate the same.

 

Semester - II

ECO 221: Micro Economic Theory II

Objective:

To acquaint the students with the process of distribution and general equilibrium analysis.

Unit  I

Distribution

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; Macro theories of distribution – Ricardian, Marxian, Kalecki and Kaldor’s.

Unit  II

Welfare Economics

Pigovian welfare economics; Pareto optimal conditions; 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; Rawl’s theory of justice, equityefficiency trade off.

Unit  III General Equilibrium

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; Production without consumption – one sector model, homogeneous functions, income distribution; Production without consumption – two sector model, relationship between relative commodity and factor prices (Stolper- Samuelson theorem), relationship between output mix and real factor prices, effect of changes in factor supply in closed economy (Rybczynski theorem), production and consumption – Introduction of contributions of Arrow and Debreu to General equilibrium analysis.

Unit  IV Economics of Uncertainty

Individual behaviour towards risk, expected utility and certainty equivalence approaches, risk and risk aversion – sensitivity analysis, gambling and insurance, the economics of insurance, cost and risk, risk pooling and risk spreading, mean-variance analysis and portfolio selection, optimal consumption under uncertainty.

Unit  V Competitive Firm under Uncertainty

Factor demand under price uncertainty, the economics of search – different models, the efficient market hypothesis, stochastic models of inventory demand; Market with incomplete information, search and transaction costs, the economics of information.

 

ECO 222: Macro Economic Theory II

Objectives: To acquaint the students about the importance of various issues related to macro economics.

Unit  I

Neo Classical and Keynesian Synthesis

The IS LM model; factors that effect the equilibrium income and interest rate; relative effectiveness of monetary and fiscal policies.

Unit  II

Macroeconomics in an open economy

Mundell-Flemming model, imperfect capital mobility, perfect capital mobility.

Unit  III Inflation and unemployment

Inflation –Unemployment trade off - The Phillips Curve; The natural rate of unemployment hypothesis and Adaptive expectation hypothesis; Relationship between short run and long run Phillips’ Curve; Sacrifice Ratio and Policy of disinflation.

Unit  IV Business Cycles

Theories of Kaldor, Samuelson and Hicks; Goodwin’s model; Control of business cycles – relative efficacy of monetary and fiscal policies.

Unit  V New Classical Macroeconomics

The Keynesian Theory and the New Classical (Lucas) critique; Rational Expectations Model and its policy implications; A critical evaluation of Rational Expectations Model.

 

ECO223: Statistical Methods For Economic Analysis

Objectives: To acquaint the students with the various components of statistics.

Unit  I

Univariate Analysis

Measures of central tendency, dispersion – standard deviation, coefficient of variation, Lorenz curve, Gini concentration ratio – Skewness (simple problems).

Unit  II

Regression Analysis

Correlation, regression, simple, multiple, linear (simple problems) – OLS-assumptions-violation of assumptions - heteroscedasticity, autocorrelation and multicollinearity (concepts only). Interpretation of Co-efficient -Introduction to non-linear regression.

Unit  III Probability and distributions

Elementary probability theory, concepts, binomial, Poisson and normal distribution.

Unit  IV Sampling Distributions

Sampling distribution, standard error-testing of hypothesis: χ2, F- ANOVA, testing correlation and regression coefficients.

Unit  V Index numbers and Time Series

Uses, selection of number of items, base year price relatives-Fisher’s ideal index-Factor reversal test-Time reversal test- Chain index-Base shifting –conversion of current price data into constant price data- price index numbers in India – Components of time series - Moving averages-Straight line trend- Seasonal Index.

 

ECO 224: Indian Economy II

Objectives: To understand the various issues of Indian economy;

Unit  I

Agricultural Sector I

• Progress in Agriculture under the Five year Plans
• Land Reforms
• Green Revolution
• New Green Revolution
• Irrigation & Other Agricultural Inputs

Unit  II

Agricultural Sector II

• Rural Credit in India
• Agricultural Marketing & Warehousing
• Agricultural Prices
• Food Security in India

Unit  III Industrial Sector I

• Growth & Pattern of Industrialization
• Industrial Policy 1956, 1977, 1980 & 1991
• Public Sector Enterprises & their Performance
• Small Scale Enterprises

Unit  IV Industrial Sector II

• Disinvestment of Public Enterprises
• Privatization
• Industrial Sickness in India
• Labour Relations & Social Security

Unit  V Prices, Money & Banking

• Analysis of Price Behaviour In India
• Commercial Banking In India
• Review of Monetary Policy of RBI
• Money & Capital Markets in India
• Working of SEBI in India

 

ECO 225: Public Economics II

Objectives: To develop an understanding of various issues related to public Finance

Unit  I

Public Debt

• Classical View, Sources, Classification & Effects of Public Debt
• Burden of Public Debt on Future Generation
• Redemption of Public Debt
• Public Debt Management: objectives & Principles
• Trends of Public Debt in India

Unit  II

Fiscal Policy

• Fiscal Policy: Meaning, Objectives & Instruments
• Fiscal Policy for stabilization: Automatic Stabilizers & Discretionary Stabilizers
• Interdependence of Fiscal & Monetary policies
• Fiscal Policy in a developing economy
• Balanced budget multiplier

Unit  III

Deficit Financing

• Deficit Financing: Objectives, Role, Effects & Limits
• The budgetary process in India: Preparation, legislation and execution
• Budgetary Deficits
• Central Government deficits since 1990-91
• Fiscal Crisis & Fiscal Sector Reforms in India

Unit  IV

Investment Evaluation

• Criteria for Public Investment
• Project Evaluation
• Cost benefit Analysis: Meaning, Criteria & Limitations
• Planning & Programme Budgeting system(PPBS)
• Zero Base Budgeting, performance budgeting, outcome budgeting, gender budgeting

Unit  V

Federal Finance

• Essential Features, & Principles of Federal Finance
• The Rationale of Fiscal Federalism
• Vertical & Horizontal Imbalance
• Finance Commission & Planning Commission
• Centre State Financial Relations in India

 

ECO 226: Seminar

Objective: To create awareness regarding current trends, issues and research as related to various aspects of economics. Students will be assigned a topic in the beginning of the semester. They will be required to prepare and submit a project report on the same. A panel of external examiners will evaluate the same.