Course 01: PRINCIPLES OF ECONOMICS
1: Exploring the subject matter of Economics
Why study Economics? Scope and Method of Economics; The Economic Problem: Scarcity and
Choice; the question of What to Produce, How to Produce and How to Distribute Output;
Science of Economics; The Basic Competitive Model; Prices, Property Rights and Profits:
Incentives and Information, Rationing; Opportunity Sets; Economic Systems; Reading and
Working with Graphs.
2: Supply and Demand: How markets work, Markets and Welfare
Markets and Competition; Determinants of individual demand/supply, Demand/Supply schedule
and demand/supply curve, Market versus individual demand/supply, Shifts in the demand/supply
curve, Demand and Supply together, How Prices allocate resources.
Elasticity and its application; Controls on Prices; Taxes and the Costs of Taxation; Consumer,
Producers and the Efficiency of the Markets.
3: The Households
The consumption decisions -- budget constraints, consumption and income/price changes,
demand for all other goods and price changes, Description of preferences [Representing
preferences with indifference curves. Properties of Indifference curves], Consumers’ optimum
choice, income and substitution effects.
The investment decision -- investment alternatives for a household, Desirable attributes of
investments
Labor Supply and Savings decision -- Choice between leisure and consumption, labour force
participation, tax policy and labour supply, Human capital and education, Budget constraints and
Savings, Savings and interest rate, Other factors affecting savings.
4: The Firm and Perfect Market Structure
Financing, controlling and managing firms -- The firm's legal form, Corporate Finance, why
corporations care about financial structure, takeover and the market for managers, making
decisions, centralization and decentralization, the boundaries of the firm.
Behaviour of profit maximizing firms and the production process, Short run costs and output
decisions, costs and output in the long run.
5: Imperfect Market Structure
Monopoly and antitrust policy, government policies towards competition.
Imperfect information in the product market--The information problem, The market for lemons
and adverse selection, the incentive problem, the search problem, advertising, the importance of
imperfect information, government and information.
6: Input Markets
Labour and Land Markets--Basic concepts [derived demand, productivity of an input, marginal
product of labour, marginal revenue product]; demand for labour; input demand curves; shifts in
input demand curves; elasticity of demand in input markets; competitive labour markets; labour
markets and public policy; Land markets and pure rent.
7: Exploring International Economics
The International Economy--Trade surpluses and deficits, the economic basis for trade--absolute
advantage versus comparative advantage, terms of trade, exchange rates; Sources of comparative
advantage -- Heckscher-Ohlin Theorem and other explanations. Trade Barriers--tariffs, subsidies
and quotas; free trade or protection--case for free trade, case for protection.
8: Introduction to Macroeconomics
The roots of macroeconomics, macroeconomic concerns, the role of government in the
macroeconomy, the components of the macroeconomy, the methodology of macroeconomics.
9: Introduction to National Income Accounting
Concepts of GDP and national income, approaches to calculating GDP, GDP and personal
income, Nominal and real GDP, Limitations of the GDP concept, GDP and the black economy.
10: The Classical System: The Full-Employment Model
Macroeconomic Equilibrium, the labour market, the product market, the capital market;
extending the full employment model
11: The Simple Keynesian Model
Aggregate expenditure and equilibrium output--aggregate output and aggregate income,
equilibrium aggregate output; Government participation in the economy; Fiscal policy at work--
The Multiplier effect.
12: Money in the Modern Economy
Characteristics of a monetary economy; The demand for money; The supply of money and
overall liquidity position; credit creation.
13: Inflation
The causes of inflation, level of prices and the value of money, The Fisher effect, The cost of
inflation.
14: Exploring the Macroeconomics of an Open Economy
Balance of Payments--The current and capital account; Determining equilibrium output in an
open economy; Open economy with flexible exchange rates--Markets for foreign exchange,
Factors affecting exchange rates, effects of exchange rates on the economy.
Readings
1. Karl E. Case and Ray C. Fair (2002), Principles of Economics, 6th Edition, Pearson
Education Asia Low Price Edition.
2. N. Gregory Mankiw, (2002), Principles of Economics, Thomson.
3. J.E. Stiglitz, and C.E. Walsh (2002), Principles of Economics, 3rd Edition, W.W. Norton &
Company, New York.
4. R. Stone and G. Stone (1962), National Income and Expenditure, Bowes and Bowes
London.
Course 02: MATHEMATICAL METHODS FOR ECONOMICS
1. Preliminaries
Elements of logic and proof: converse and contra positive, necessary and sufficient conditions,
proof by contradiction, mathematical induction. Sets and set operations. Ordered pairs, Cartesian
products of sets. Relations. Functions: one-to-one and onto functions, composite functions, the
inverse function. The real numbers: natural numbers, integers, rational and irrational numbers;
absolute value and intervals; inequalities.
2. Elementary Linear Algebra
2-, 3-, and n-dimensional row and column vectors; vector addition and scalar multiplication;
length of a vector, scalar products, orthogonality. Geometric representation, lines and planes in
R2 and R3 . Linear and convex combinations of vectors. Linear independence. Convex sets.
Matrices and matrix operations: addition, scalar multiplication, matrix multiplication. The
transpose. The inverse of a square matrix. Rank. Elementary row operations and computation of
rank. Invertibility and rank for square matrices.
Determinants: definition, properties, minors and cofactors, the Laplace expansion, expansion by
alien cofactors; singularity and invertibility; the adjoint matrix and formula for the inverse.
Linear equation systems in matrix and vector notation (m equations, n variables). The rank
criterion for consistency (existence of solutions). Uniqueness of solutions; redundancy and
degrees of freedom. The case m = n : homogeneous and inhomogeneous systems, determinantal
criteria for consistency and uniqueness, matrix methods of solution and Cramer’s Rule.
3. Functions of One Real Variable and Applications of Calculus
Examples (linear functions, polynomials, etc.) and elementary curve types. Sets of points in the
plane determined by equations or inequalities.
Infinite sequence and series: the concepts of convergence and limits; algebraic properties of
limits. Present discounted values and elements of investment analysis.
The limit of f (x) as x ® a . Continuity. The intermediate-value theorem.
The derivative of a function. Differentiability and continuity. Techniques of differentiation;
sums, products and quotients of functions; composite functions and the chain rule. Inverse
functions. Implicit differentiation. Second and higher order derivatives. Concavity and convexity
of functions: Jensen’s inequality; the second derivative criterion. Points of inflexion.
Differentials and linear approximation. Taylor’s theorem and polynomial approximation.
Indeterminate forms and L’Hôpital’s Rule.
Exponential and logarithmic functions. Logarithmic differentiation. Examples of the use of the
exp and log functions (proportional rates of change, elasticities, continuous compounding etc.)
Optimization: stationary points, local and global optima; location of turning points and points of
inflexion using derivatives; the role of concavity and convexity. Applications.
4. Functions of Several Variables
[The emphasis throughout should be on functions of two variables (and related geometrical
interpretation) without, however, restricting the discussion only to this case.]
Geometric representation; level curves. Partial differentiation; plane sections and geometrical
interpretation. Tangent planes to a surface. Higher-order partial derivatives, Young’s Theorem.
Partial derivatives in economics.
Linear approximation and differentials. The chain rule. The implicit function theorem (statement
only), first- and higher-order derivatives of functions defined implicitly, geometric interpretation.
Homogeneous and homothetic functions. Elasticity of substitution.
Concave and convex functions, Jensen’s inequality and characterization in terms of the Hessian
(statement only). Convex sets. Quasiconcave and quasiconvex functions.
Maxima and minima, saddlepoints, unconstrained optimization, necessary and sufficient
conditions for local optima.
Constrained optimization (equality constraints). The method of Lagrange multipliers.
Interpretation of the necessary conditions and of the Lagrange multiplier; geometrical meaning.
Sufficient conditions. Envelope results. Economic examples.
Readings
1 Knut Sydsaeter and Peter J. Hammond (2002) Mathematics for Economic Analysis.
Pearson Educational Asia: Delhi (reprint of 1st 1995 edition).
2 Alpha C. Chiang (1984) Fundamental Methods of Mathematical Economics. McGraw
Hill (3rd edition).
Course 03: STATISTICAL METHODS IN ECONOMICS
1. Elementary Distribution Theory
Univariate Frequency Distributions measures of location, Dispersion, Skewness and
Kurtosis; the first four moments about zero and central moments.
2. Elementary Probability Theory
Concepts of Sample space and events, probability of an event; addition and multiplication
theorems; conditional probability and independence of events. Bayes rule.
Concept of a random variable; Probability distribution, Joint Marginal and Conditional
Distributions, Independence of random variables; mean and variance of a random
variable; binomial and normal distribution; Law of large numbers and central limit
theorem.
3. Introduction to Estimation and Hypothesis Testing
Methods of sampling; sampling distribution of a statistic; distribution of the sample
mean; sampling error and standard error of a statistic with special reference to the mean;
Point and interval estimation of parameters; properties of an estimator; unbiasedness,
relative efficiency and consistency.
Testing of Hypothesis; type I and type II errors, power of a test; large sample tests, t test
for the mean; one tail and two tail tests for difference of means; Chi-square test for (i)
goodness of fit and (ii) independence of two attributes.
4. Bivariate Distributions and Simple Linear Regression:
Marginal and conditional distributions: discrete case; Covariance and correlation: rank
correlation.
Simple linear regression; method of least squares; Derivation of the normal equation;
standard error of regression (SER), properties of the least squares estimator, Gauss-
Markov Theorem, Simple tests of hypothesis on regression coefficients, linear and
exponential trend, point and interval forecasts.
5. Index Numbers:
Concept of an index number. Laspeyer’s, Paasche's and Fisher's Index Numbers; Time
Reversal, Factor reversal and circular tests; Chain base index; Problems in the
Construction of an index number; splicing; base shifting and use of index number for
deflating other series.
Readings:
1. P.H. Karmel and M. Polasek, Applied Statistics for Economists (4th edition), Pitman,
Australia.
2. Allen Webster, Applied Statistics for Business and Economics, (3rd edition), McGraw Hill,
International Edition 1998.
3. M.R. Spiegel (2nd edition), Theory and Problems of Statistics, Schaum Series.
Course 04: MICROECONOMICS
1. Consumer Theory:
Preference, utility, budget constraint, choice, demand, Slutsky equation, buying
and selling, choice under uncertainty, inter temporal choice, revealed preference.
2. Production and Costs:
Technology, Isoquants, production with one and more variable inputs, Returns to
scale, short run and long run costs, cost curves in the short run and long run.
3. Market Structure and Game Theory
Review of perfect competition and monopoly; Pricing with market power; price
discrimination, peakload pricing, two-part tariff; monopolistic competition and
oligopoly; Game Theory and competitive strategy
4. General Equilibrium and Economic Efficiency
Exchange, production and welfare
5. Market Failure
Externalities, public goods, markets with asymmetric information
Readings:
1. Robert S. Pindyk and D.L. Rubinfeld, (2000), Microeconomics, 3rd edition, Prentice Hall
India.
2. Hal R. Varian (1993), Intermediate Microeconomics, a Modern Approach, 3rd edition,
Affiliated East-West Press.
Course 05: MACROECONOMICS
1. The Closed Economy in the Short Run
Classical and Keynesian Systems; IS-LM model; fiscal and monetary multipliers;
aggregate demand and aggregate supply, the accounting identities.
2. Inflation and Aggregate Supply Curve
Phillips curve; adaptive and rational expectations; policy ineffectiveness debate.
3. The Medium Run
Government budget constraint; financing government expenditure through taxes, bonds
money creation.
4. Open Economy Models
Short run open economy models: the Mundell Fleming model.
Exchange rate determination: purchasing power parity, asset market approach;
Dornbusch's overshooting model. The monetary approach to balance of payments.
5. Economic Growth
Harrod-Domar model; Solow model; elements of endogenous growth.
6. Microeconomic Foundations
Consumption; investment; demand for money and supply of money.
Readings:
1. Rudiger Dornbusch, Stanley Fischer and Richard Startz, Macroeconomics, 7th or later
edition, McGraw Hill.
2. N. Gregory Mankiw Macroeconomics, 4th or later edition, Worth Publishers.
3. Jones, Charles I. (1998), Introduction to Economic Growth, W.W. Norton & Company,
Chapters 1, 2, 8.
4. Sen, A.K.,ed.(1970) Growth Economics, Penguin Books.
5. Attfield, C.L.F., D. Demery and N.W. Duch (1991), Rational Expectations in
Macroeconomics, 2nd edition, Blackwell, Chapters 1, 2, 4,.
6. Sheffrin, Steven, M. (1996), Rational Expectations, 2nd edition, Cambridge University Press.
Course 06: ECONOMIC HISTORY OF INDIA 1857-1947
1. Colonial India: An Overview
2. Trends in macroeconomic aggregates: Population, labour force and occupational
structure; National Income; Foreign trade and balance of payments; Saving and
investment; Money supply and prices.
3. Railways and Economic Change
4. Agriculture, land, labour, capital, technology, commercialization, famines and
environment.
5. Traditional and Modern Industry: The deindustrialization hypothesis, rise of the modern
industrial sector during the pre-war and the interwar period, industrial labour, growth of
entrepreneurship.
6. The Role of Government
7. The Indian Economy at Independence
Readings
1. A.K. Bagchi (1976), "Deindustrialization in India in the Nineteenth Century: Some
theoretical implications", Journal of Development Studies.
2. A.K. Bagchi (1972), Private Investment in India, Orient Longman (1st ed), Ch.2.
3. J.N. Bhagwati and Padma Desai (1970), India, Planning for Industrialization, Oxford
University Press, Chs. 2 & 3.
4. Basudev Chatterjee, Trade, Tariffs & Empire, Lancashire and British Policy in India, 1919-
1939, Oxford University Press, New Delhi, 1992, ch.2.
5. Rajnarayan Chandavarkar (1985), "Industrialization in India before 1947: Conventional
Approaches and Alternative Perspectives", Modern Asian Studies.
6. Jean Dreze, “Famine Prevention in India”, in J. Dreze, and A.K. Sen, (eds), Political
Economy of Hunger, WIDER Studies in Development Economics.
7. D.R. Gadgil (1971), The Industrial Evolution of India in Recent Times, Oxford University
Press.
8. Omkar Goswami (1989), "Sahibs, Babus and Banias: Changes in Industrial Control in
Eastern India", Journal of Asian Studies.
9. Sumit Guha (1991), "Mortality Decline in Early 20th Century India", Indian Economic and
Social History Review.
10. Sumit Guha (1999), Environment and Ethnicity in India, 1200-1991, Cambridge University
Press, Ch.8.
11. Ira Klein(1984), "When Rains Fail: Famine Relief and Mortality in British India", Indian
Economic and Social History Review.
12. Dharma Kumar (ed.) (1983), The Cambridge Economic History of India, Vol. II, Cambridge
University Press, Chs. 4, 5, 6, 8.2, 10 & 12,
13. Morris D. Morris (1965), The Emergence of an Industrial Labour Force in India: A Study of
the Bombay Cotton Mills 1854-1947, Oxford University Press, last chapter.
14. Rajat Ray (ed) (1992), Entrepreneurship and Industry in India, 1800-1947, Oxford
University Press, Introduction.
15. Rajat Ray (1979), Industrialization in India, Oxford University Press, Ch. 4.
16. Tirthankar Roy (2000), The Economic History of India, 1857-1947, Oxford University Press,
Ch.3, 4, 7, 8 & 9.
17. Sivasubramonian (1997), "Revised estimates of the national income of India, 1900-1901 to
1946-47", Indian Economic and Social History Review.
18. B.R. Tomlinson (1993), The Economy of Modern India, Cambridge University Press, Ch.1 &
2.
19. B.R. Tomlinson (1979), The Political Economy of the Raj 1914-1947: The economics of
decolonization in India, Macmillan, Ch. 3 & 4.
Course 07: India's Economic Development since 1947
Unit 1: Major features of Indian economy at Independence
Unit 2: Growth, development and structural change
a) The experience of growth and development: planning and the market
b) Growth and Development experience in different Phases of Growth
defined broadly (but not exclusively) by reference to changes in policy
regimes and goals of development.
Growth and structural change
Growth and distribution
Human development and environment
Regional contrasts
c) Indian development experience in international perspective: factors,
strategy and policy
Unit 3: Issues in Indian economic Policy
a) Population and Human resource development
b) Growth, unemployment and poverty
c) Macro economic stabilisation: Trade, Fiscal and Monetary policy issues.
d) Agriculture, industry, services and trade
Unit 4: India's development prospects - looking ahead
Readings: (To be reviewed annually to keep abreast of new Readings)
1. Montek S. Ahluwalia, (2002), "State-level Performance under Economic Reforms in
India”, in A.O. Krueger (ed), Economic Policy Reforms and the Indian Economy,
The University of Chicago Press.
2. Pranab Bardhan (2003), Poverty, Agrarian Structure and Political Economy in India:
Selected Essays, OUP, Ch.5.
3. Jagdish Bhagwati, (1993), India in Transition, Freeing the Economy, Clarendon
Press, Ch.2.
4. ____ and Padma Desai,(1970) India: Planning for Industrialization (Oxford University
Press), Ch.2.
5. S. Chakravarty, (1987), Development Planning: The Indian Experience, Clarendon
Press, Chs. 2,3 and 5.
6. V.M. Dandekar, (1992), "Forty Years After Independence" in Bimal Jalan (ed.), The
Indian Economy, Problems and Perspects, Viking Press.
7. Angus Deaton and Jean Dreze (2002), “Poverty and Inequality in India: A Reexamination”,
EPW, September 7, 2002.
8. Jean Dreze and Amartya Sen,(2002), India Development and Participation, OUP, Chs.
2,3,5,6 and 7.
9. Jean Dreze and Gita Kingdon (2001), “ School Participation in Rural India”, Review of
Development Economics, Vol.5, No.1.
10. Rakesh Mohan (2003), “Small Scale Industry Policy in India: A Critical Evaluation”
in A.O. Krueger (ed.) Economic Policy Reforms and the Indian Economy.
11. Sebastian Morris (2001), “Issues in Infrastructure Development Today: The Inter
linkages”, in India Infrastructure Report, OUP.
12. B.S. Minhas (1991), Public vs. Private Sectors: Neglect of Lessons of Economics in
Indian Policy Formulation, R.R. Kale Lecture, Gokhale Institute of Politics &
Economics, Pune.
13. R. Nagaraj (2003), “Industrial Policy and Performance Since 1980”, EPW, August 30
– September 7, 2003.
14. Kirit S. Parikh, A. Ganesh Kumar and Gangadhar Darbha (2003), “Growth and
Welfare Consequences of Rise in MSP”, EPW, March 1, 2003.
15. Mihir Rakshit (2001), “On Correcting Fiscal Imbalances in the Indian Economy:
Some Perspectives”, Money and Finance, ICRA Bulletin, July-September 2001.
16. Mihir Rakshit (2002), Food Policy in India: Some Longer-Term Issues”, Money and
Finance, ICRA Bulletin, April-September, 2002.
17. V.M. Rao, and P.D. Jeromi,(2000) "Modernizing Indian Agriculture: Priority Tasks
and Critical Policy" Study No.21, DRG, RBI.
18. S.K. Ray (1996), “Land Systems and the Reforms in India”, Indian Journal of
Agricultural Economics, January-June 1996.
19. T.N. Srinivasan, (2000), Eight Lectures on India's Economic Reforms, OUP.
20. T.N. Srinivasan (2003), “India’s Fiscal Situation: Is a crisis Ahead?” in A.O. Krueger
(ed.), Economic Policy Reforms and the Indian Economy.
21. T.N. Srinivasan, and Suresh D. Tendulkar (2003), Reintegrating India with the World
Economy, OUP, Chs. 2 and 3.
22. K. Sundaram and Suresh D. Tendulkar (2002), The Working Poor in India:
Employment Poverty Linkages and Employment Policy Options, Issues in Employment
and Poverty, Discussion Paper 4, ILO, Geneva, September 2002.
Course 08: ECONOMY, STATE AND SOCIETY
1. Analysing Socio-Economic Change in Historical Perspective.
2. Capitalism as an Economic System: Origins, nature and structure of capitalism;
Accumulation and crisis; Alternative perspectives on capitalism.
3. The transition from Feudalism to Capitalism.
4. The Evolving Structure of Capitalism: Monopoly capitalism; The modern corporation:
divorce between ownership and control; The institutional diversity of capitalism;
Alternative perspectives on the role of state.
5. Capitalism in a Global Context: Multinational corporations and their impact on the
developing economies; imperialism.
Readings:
1. Gurley (1978): "The Materialist Conception of History", Ch.2.1 in R. Edwards, M.Reich and
T. Weisskopf (ed.), The Capitalist System (2nd edition), and editorial comment in 3rd edition
(1986) pp. 7-10, Prentice Hall.
2. O. Lange, Political Economy, vol 1 , Chapters 1 and 2.
3. R.L. Heilbroner (1987), "Capitalism", in The New Palgrave Dictionary of Modern
Economics, Macmillan. Also reprinted as Chapter 2 in Behind the Veil of Economics by R.L.
Heilbroner (1988), W.W.Norton.
4. D. Foley (1983), "Commodity", in T. Bottomore et al (ed.) , The Dictionary of Marxist
Thought., OUP. (Indian edition, Maya Blackwell, 2000) .
5. A. Shaikh (1983), "Economic Crises" and "Falling Rate of Profit", in T. Bottomore et al
(eds.) , The Dictionary of Marxist Thought , OUP. (Indian edition, Maya Blackwell, 2000) .
6. P. Kenway (1987), "Crises" and "Realisation Problem" in The New Palgrave Dictionary of
Modern Economics, Macmillan.
7. T. Bottomore (1985), Theories of Modern Capitalism, Allen & Unwin. Chapters on Weber
and Schumpeter.
8. J. Schumpeter (1942), Capitalism, Socialism and Democracy, George Allen and Unwin
(1976 edition), Chapters 7 and 8.
9. P. Baran (1957), The Political Economy of Growth, Chapter 3, (Pelican edition, 1973).
10. J.K. Galbraith (1967), The New Industrial State, Chapters 2 – 7.
11. R. Blackburn,(ed.) (1972), Ideology in Social Science, Chapter 8, Fontana.
12. S. Hymer : Part I of "The Multinational Corporation and the Law of Uneven Development",
in H. Radice (ed.) International Firms and Modern Imperialism (also in J. Bhagwati (ed.)
Economics and the World Order from the 1970s to the 1990s)
13. W. Lazonick (1994), "Social Organisation and Technological Leadership", in W.Baumol et al
(ed.) Convergence of Productivity , Oxford .
14. P. Hirst and J. Zeitlin (1997), "Flexible Specialisation : Theory and Evidence in the Analysis
of Industrial Change”, in R. Boyer et al (ed .), Contemporary Capitalism, Cambridge
University Press.
15. M. Kalecki (1943), “Political Aspects of Full Employment”, in E.K. Hunt and J.G. Schwarz
(eds.) A Critique of Economic Theory (Also in Kalecki, Selected Essays on the Dynamics of
the Capitalist Economy , Cambridge University Press, 1971 ).
16. T.N. Srinivasan (1985), “Neoclassical Political Economy”, chap. X.10.1 in G.M. Meier
(ed.) Leading Issues in Economic Development ( 6th edition ), OUP India, 1995.
17. Peter Evans (1998), "Transnational Corporations and the Third World States", in R.Kozul -
Wright and R.Rowthorn (ed.), Transnational Corporations and the Nation State (till sec
6.2), Macmillan.
18. Prabhat Patnaik (1986), “Introduction” (pp. 1-21) in Lenin and Imperialism, ed. P. Patnaik ,
Orient Longman.
19. Prabhat Patnaik (1996): "Globalisation of Capital and the Theory of Imperialism", Social
Scientist, Nov.- Dec., pp. 5 - 17.
20. Rodney Hilton (ed.) The Transition from Feudalism to Capitalism, Introduction.
21. Paul Sweezy, A. Critique, in Hilton (ed.)
22. Maurice Dobb, A. Reply, in Hilton (ed.)
Course 09:DEVELOPMENT THEORY AND EXPERIENCE
Part I: Growth and Development
Development and underdevelopment (size of the market; characteristics and measures of
development); Historical experience of development (stages of growth; late industrialization;
structural analysis).
Poverty and inequality (conceptual issues and measurement; capabilities and entitlements;
policies for poverty reduction)
State and the market (market failure; government failure; conflict versus complementarity)
Project Appraisal and Social Cost Benefit Analysis
Part II: Resources
Capital and technical progress (role of capital; capital output ratio; resource allocation; level and
pattern of capital formation; patterns of technical progress; technology and unemployment;
obsolescence; choice of techniques)
Labour and employment issues (population growth; demographic transition; human resource
development; surplus labour; open and disguised unemployment; informal sector; rural-urban
migration)
Land and the rural economy (overview of farm and non-farm sector; credit and micro-credit;
interlocked markets; natural resources; environment and sustainable development)
The Environment and Sustainable Development, Non Renewable resources.
Part III: Globalisation and Development
Trade policy debate (export promotion and import substitution, WTO – structure and functions;
WTO and LDCs)
Foreign capital (role and limitations; MNCs; Third World debt crisis; private foreign investment;
IMF and World Bank)
Part IV: Overview and Contemporary Issues
Readings
1. Michael P. Todaro (1997), Economic Development, International Student (Sixth) Edition,
Addison-Wesley
2. Debraj Ray (1998), Development Economics, OUP
3. Gerald M. Meier (1995), Leading Issues in Economic Development, Sixth Edition, OUP
4. Jean Dréze and Amartya Sen (1995), Economic Development and Social Opportunity, OUP
5. A.P. Thirlwall (1999), Growth and Development with Special Reference to Developing
Economies, Macmillan, 6th Edition
6. S Chakravarty, “The State of Development Economics” based on Lecture at Manchester
University in 1985, Ch.8, pp.184-203 in S. Chakravarty (1997): Writings on Development,
Oxford University Press.
COURSE 10: INDIAN AGRICULTURE AND INDUSTRY
PART-I: AGRICULTURE
1. Agricultural Performance since Independence
Output and productivity growth: regional and crop perspectives. Growth and instability.
2. The Policy Environment
Agricultural price policy and subsidies; The public distribution system
3. Resource Use Efficiency
Fertiliser, Water, Other inputs
4. Current Issues in Indian Agriculture (selected topics)
Sustainable agricultural growth—concepts and constraints
Prospects for dryland agriculture
International trade in agriculture
Technology policy
Market infrastructure
Crop insurance
5. Agricultural Exports
Quantitative Restrictions (QRs) and Non tariff barriers
WTO and Subsidies in Developed Countries
Management of Shortages and surpluses.
Readings
1. Vaidyanathan, A. (1994), “Performance of Indian Agriculture since Independence” in
Kaushik Basu (ed.), Agrarian Questions Oxford University Press.
2. 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.
3. Robert Evenson, Carl Pray and Mark Rosegrant (1999), Agricultural Research and
Productivity Growth in India (IFPRI Research Report 109).
4. Gunvant Desai and A. Vaidyanathan (1995), Strategic Issues in Future Growth in Fertiliser
Use in India, Macmillan.
5. 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.
PART-II: INDUSTRY
1. Overview of the Industrial Scene in India
Trends in growth and productivity; Competitiveness and changes in Policy Regimes
2. Issues relating to the Composition of Indian Industry
1. Small vs. Large Industry
2. Public vs. Private Sector, with emphasis on:
3. Performance of the public sector
4. Privatisation
5. Dynamics of the Industrial Sector: Growth and Sickness
3. Trends in Industrial Regulation and Control
Pricing in the public and private sectors
Employment growth in the industrial sector
4. Policy Issues and Future Prospects
Infrastructure; Technology
5.Issues of Management
Limiting market abuses
FDIs/FIIs
6. Financing of Industry
Ownership and Efficiency
Equity markets
Readings
1. J. Bhagwati (1993), India in Transition: Freeing the Economy, Clarendon Oxford 1993
2. Mrinal Datta Chaudhri (1990), Market Failure and Government Failure: Journal of Economic
Perspectives
3. NCAER The India Infrastructure Report (Rakesh Mohan Committee)
4. Department of Disinvestment, White Paper, 2000
5. Dilip Mookherjee, ed. (1995), Indian Industry, Oxford University Press, New Delhi.
Course 11: MONEY AND FINANCIAL MARKETS
1. Money in the Financial System
Money and its functions; financial markets, financial instruments and money; Demand
for money -- various approaches, Money and Capital market, Financial deepening.
2. Money Supply Analysis
Theory of money supply; money multiplier analysis; monetary aggregates; monetary
aggregates in India; financial innovations
Central Bank's Functions, Reserve/High Powered Money.
Monetary Survey and Central Bank's Balance sheet.
3. Analysis of Interest Rates
Interest rates in closed and open economies; Theories of term structure
4. Financial Markets
Banking system, bond market, foreign exchange market, equity market
Introduction to the concept of Derivatives
Futures, Options, Call/Put.
5. Monetary Policy
Goals, targets, indicators and the transmission mechanism; instruments of monetary
policy
6. Monetary Management in An Open Economy
International capital markets, portfolio diversification; the international monetary system;
monetary policy in India's open economy; financial sector reforms in India. The
Narasimham Committee Report.
Readings
1. M.K. Lewis (2000), Monetary Economics, OUP
2. M.R. Baye, D.W. Jansen (1996), Money Banking and Financial Markets, AITBS, (Indian
Edition)
3. Maurice Levi (1999), International Finance, Tata McGraw Hill
4. L.M. Bhole (1999), Financial Institutions and Markets, Tata Mcgraw Hill
5. R.B.I. Bulletin, Annual Report; Report on Currency and Finance
6. R.B.I. - Report of the Committee on the Financial System (Narasimham Committee
Report I)
7. R.B.I. - Report of the Committee on Banking Sector Reforms (Narasimham
Committee Report II) Summary in RBI Bulletin, July, 1998.
8. R.B.I - Report of the Working Group : Money Supply Analytics and Methodology of
Compilation, 1998.
9. Y.V. Reddy (2000), Monetary and Financial Sector Reforms in India UBSPD, New Delhi
Course 12: PUBLIC ECONOMICS
Part I: Theory
1. Fiscal functions: An overview
2. Tools of normative analysis: Pareto efficiency, equity and the social welfare
function; market failure
3. Public goods: definition, models of efficient allocation, pure and impure public
goods, free riding
4. Externalities: The problem and its solutions, taxes versus regulation, property
rights, the Coase Theorem
5. Taxation: Its economic effects; dead weight loss and distortion, efficiency and
equity considerations, tax incidence, optimal taxation
6. Fiscal federalism, the economic basis of decentralisation.
Part II: Indian Public Finances
1. The Indian tax system
2. Public expenditure in India: Its pattern and growth
3. Public debt, deficits and subsidies in the Indian economy
4. Centre-State financial relations
Readings
1. R.A. and P.B. Musgrave, (1989), Public Finance in Theory and Practice, McGraw Hill.
2. Harvey Rosen (1999), Public Finance, McGraw Hill.
3. John Cullis and Philip Jones (1998), Public Finance and Public Choice, Oxford University
Press.
4. J. Richard Aronson (1985), Public Finance, McGraw Hill.
5. Government of India (1992), Interim Report of the Tax Reforms Committee, Ministry of
Finance.
6. R.J. Chelliah (1996), Towards Sustainable Growth, Oxford University Press.
7. Mihir Rikshit (2000), “On Correcting Fiscal Imbalances in the Indian Economy: Some
Perspectives”, ICRA Bulletin.
8. Mahesh Purohit (2001), Value Added Tax, Gayatri Publications.
9. Rakesh Mohan (2000), “Fiscal Correction for Economic Growth: Data, Analysis and
Suggestions”, Economic and Political Weekly, June 10.
10. D.K. Joshi and J.L. Bajaj (1999), Government Finances, NCAER (mimeo).
11. M.G. Rao and Tapas Sen (1996), Fiscal Federalism in India, Macmillan.
12. Government of India (2000), Report of the Eleventh Finance Commission.
13. D.K. Srivastava (ed.) (2000), Fiscal Federalism in India: Contemporary Challenges, Har
Anand Publications, New Delhi.
Course 13: COMPARATIVE ECONOMIC DEVELOPMENT [1850-1950]
Perspectives on Comparative Economic Development: (a)Features of and trends in
Modern Economic Growth -- a brief discussion of Kuznets' findings (b) Gerschenkron's
hypothesis of Economic Development in Historical Perspective
An overview of economic development of the countries selected for case studies -- Britain,
Germany, U.S.A., Japan and USSR.
Changes in the structure of agriculture and economic development -- Britain, Japan and U.S.S.R.
Role and pattern of industrialisation in Britain, Japan and U.S.S.R.
Labour markets and labour processes - Britain and Japan
Financial institutions and economic development in Germany, U.S.A and Japan
Foreign trade and economic development -- Britain, Japan and USA.
Role of the State in economic development (regulatory and developmental role) -- Japan, USA
and USSR.
Readings
1. G.C. Allen, "Industrialisation of the Far East" in Cambridge Economic History of Europe
(CEHE), Vol.VI, Part II,
2. W.A. Cole, "The Growth of National Incomes", CEHE, Volume VI, Part I.
3. Richard A. Easterlin, Davis and Parker (1972) American Economic Growth: An economist’s
History of the United States. Harper & Row Chs. 1, 9,14 and 17.
4. Phyllis Deane (1966), The First Industrial Revolution, Cambridge University Press, Ch.3
5. Phyllis Deane, “Great Britain” Ch.3 in the Fontana Economic History of Europe (FEHE),
The Emergence of Industrial Societies, Part one.
6. Maurice Dobb (1977), Soviet Economic Development since 1917 ed.6, Routledge & Kegan
Paul, Chs. 9, 10
7. A. Gerschenkron (1969), Economic Backwardness in Historical Perspective, Harvard
University Press, Ch.1
8. Bertrand Gille, "Banking and Industrialization in Europe 1730-1914", in FEHE, The
Industrial Revolution. Vol. 3, Ch. 4.
9. Paul R Gregory and Robert C. Stuart (1986), Soviet Economic Structure and Performance,
Harper & Row (3rd ed) Chs. 1,4,5 & 7.
10. Gregory Grossman, "Russia and the Soviet Union" in FEHE, Vol IV, Part II, Ch. 8.
11. Y Hayami (1975), A Century of Agricultural Growth in Pre-War Japan: Its Relevance to
Asian Development. University of Minnesota Press, Chs. 1, 3, and 8.
12. E.J. Hobsbawm (1968), Industry and Empire: An Economic History of Britain since 1750.
Weidenfeld & Nicholson, Chs.1,2,3,5,6.
13. E.J. Hobsbawm (1984), World of Labour: Further studies in the history of labour. London
Weidenfeld & Nicholson, Ch. 11
14. Chalmers Johnson (1982), MITI and the Japanese Miracle: The Growth of Industrial Policy
1925-1975, Stanford University Press, Chs.1,9.
15. Okochi, Karsh and Levine (1965), Workers and Employees in Japan, The Japanese
Employment relations system, University of Tokyo, Ch.13
16. Simon Kuznets, Economic Growth and Structure, Oxford & IBH, Ch.1.
17. Simon Kuznets (1966), Modern Economic Growth: Rate, Structure & Spread, Yale
University Press,
18. W.W. Lockwood (ed) (1965), State and Economic Enterprise in Japan, Princeton University
Press, Ch.2, 195-215.
19. W.W. Lockwood (1966), Economic Development of Japan, Expanded edition, Princeton
University Press, Chs.6,7 & 10
20. Peter Mathias (1983), The First Industrial Nation, An Economic History of Britain, 1700-
1914. 2nd edn, Methuen Chs.1,3,8 and 15.
21. Roderick Floud and D. McCloskey (ed) (1981), Economic History of Britain Since 1700,
Cambridge University Press, (2nd ed) Ch. 12.
22. T. Nakamura (1983) Economic Growth in Pre-War Japan, Tr. by Robert A Feldman, Yale
University Press, Chs. 1, 2, 3, 5 and 6.
23. Alec Nove (1969) An Economic History of USSR, Penguin, 1969, Chs.5,6,7,8,9.
24. Sidney Pollard, "Labour in Great Britain" in CEHE, ch3, Vol. VII, Part I.
25. Michael Piore and Charles Sabel The Second Industrial Divide: Possibilities for Prosperity.
Basic Books.
26. Richard Tilly, "German Banking" in Journal of European Economic History, 1986, Vol. 15.
No.1.
27. William Woodruff, “Emergence of International Economy 1700-1914” in FEHE, The
Course 14: INTRODUCTORY ECONOMETRICS
1. Nature and scope of econometrics
2. Review of Statistics
(i) Descriptive statistics: (a) the univariate case, (b) the bivariate case;
(ii) Random Variables and Probability distributions;
(iii) Estimation of parameters; Testing of hypotheses
3. Classical Linear Regression Model : Two Variable Case
(i) Descriptive Aspects
(ii) Properties of Least Squares estimates; tests of hypotheses and confidence intervals;
Gauss - Markov Theorem
(iii) Forecasting
4. Classical Multiple Linear Regression Model.
(i) Descriptive Aspects : Least Squares Estimation ; R2 and Adjusted R2 ; Partial
Correlations
(ii) The Classical Model : Gauss - Markov Theorem ; Standard Error of Estimate
Standard errors of regression coefficients
(iii) Tests of Hypotheses : Single Parameters ; Sets of Parameters
(iv) Forecasting
(v) Functional Forms of Regression Models
(vi) Dummy Variables
5. Violations of Classical Assumptions and Remedies
(i) Multicollinearity
(ii) Heteroscedasticity
(iii) Auto-correlation
6. Specification Analysis
(i) Omission of a relevant variable
(ii) Inclusion of irrelevant variable
(iii) Tests of Specification Errors
7. Simple Applications of Least Squares
(i) Estimation of Engel Functions
(ii) Estimation of Cobb-Douglas Production function
(iii) Estimation of Consumption function
Readings
1. D. Gujarati (1999), Essentials of Econometrics, McGraw Hill.
2. A.S. Goldberger (1998), Introductory Econometrics, Harvard University Press, Cambridge.
Course 15: TOPICS IN MICROECONOMICS
1. Decision theory under uncertainty
2. Basic notions of non-cooperative game theory
Complete information games in extensive from (relatively informal introduction) and strategic
form; pure and mixed strategies; dominant strategies equilibrium, Nash equilibrium and subgame
perfect equilibrium.
3. Applications of material in Section 2
Cournot, Bertrand, Stackelberg, Hotelling, Prisoners' Dilemma, Centipede, Battle of the Sexes,
Chicken, Simple dynamic game (e.g. entry deterrence), Auctions (sealed-bid first price, sealed
bid second price, English, Dutch), etc.
4. Incomplete information games
5. Moral hazard problems
6. Adverse selection problems
7. Signaling games
Readings
1. L.M.B. Cabral, (2000) Introduction to Industrial Organization, MIT Press.
2. P.K. Dutta (1999) Strategies and Games: Theory and Practice, MIT Press.
3. E. Rasmusen (1994) Games and Information: An Introduction to Game Theory, 2nd Edition,
Blackwell.
Course 16: TOPICS IN MACROECONOMICS
1. Mathematical Prerequisites:
Difference equations; differential equations; phase plane analysis; dynamic optimization
2. Growth Theory:
Solow model; optimal growth; overlapping generations model; endogenous growth
3. Rational Expectations:
Lucas critique; policy ineffectiveness; time inconsistency; Dornbusch's overshooting model
4. New Keynesian Models:
(a) Real and nominal price rigidity: menu costs; co-ordination failures; imperfect
competition
(b) Real and nominal wage rigidity: insider-outsider models; efficiency wages; implicit
contracts.
5. Non Walrasian Economics:
Dual decision hypothesis; Keynesian and Classical unemployment
6. Structuralist Macroeconomics:
Closed and open economy structuralist models.
Readings
1. M. Hoy, J. Livernois, C. McKenna, R. Rees, T. Stengos (1996), Mathematics for Economics,
Addison-Wesley.
2. A.C. Chiang (1992), Elements of Dynamic Optimization, McGraw Hill.
3. C. Jones (1998), Introduction to Economic Growth, Norton.
4. O. Blanchard and S. Fischer (1989), Lectures on Macroeconomics, MIT.
5. W. Scarth (1996), Macroeconomics, Dryden.
6. S. Sheffrin (1996), Rational Expectations, Cambridge University Press.
7. R. Dornbusch (1980), Open Economy Macroeconomics, Basic Books.
8. N. Mankiw and D. Romer (1991), ed., New Keynesian Economics, MIT, 2 volumes. Selected
Readings.
9. W. Branson (1989), Macroeconomic Theory and Policy, 3rd Edition, Harper Collins.
10. L. Taylor (1991), Income Distribution, Inflation and Growth, MIT.
Course 17: INTERNATIONAL ECONOMICS
Part I
The subject matter of international economics
Comparative advantage: Ricardian, specific-factors, and Heckscher-Ohlin models.
Terms of trade, immiserising growth, and the transfer problem.
New trade theories: economics of scale and imperfect competition
International factor movements: labour migration and foreign investment.
Trade policy and welfare, with special reference to developing countries.
The international trading system: WTO and preferential trading agreements.
Part II
Review of national income and balance of payments accounting.
The foreign exchange market and exchange rate determination.
Open economy macro-economics: Determination of output, interest rates and exchange rates in
the long and short runs.
Macro-economic policy in an open economy and international policy coordination: fixed and
flexible exchange rates.
International monetary institutions and issues: IMF, currency crises, stabilization and other
contemporary issues.
Readings:
1. Paul Krugman and Maurice Obstfeld, International Economics: Theory and policy, latest
edition, Pearson Education low-price edition, distributed in India by Addison-Wesley
Longman.
2. W.M. Corden (1974), Trade Policy and Welfare, Clarendon Oxford , Chapters 1,2 and 9.
3. T.N. Srinivasan (1998), Developing Countries and the Multilateral Trading System, OUP,
Delhi, Chapters 5-8.
4. Amitav K. Dutt (1995), "The Open Economy" in Prabhat Patnaik (ed.), Macro-economics,
OUP, Delhi.
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