Central University of Rajasthan Course Structure for M.A. (Economics)
The syllabus comprises of twenty four courses carrying four credits each spread over the four semesters. The 96 credits may be divided as follows. o Core courses and electives (e.g., Environmental Economics) and a Project report on issues covered by the Electives) - 80 o Supportive and Socially Oriented Courses 16 The University may introduce later on other Electives such as Finance, Infrastructure, etc. Following papers were suggested to be incorporated in each semester: Semester I 1.1. Micro Economics-1 1.2. Mathematical Methods in Economics 1.3. Statistical Methods in Economics 1.4. Macro Economics-1 1.5. Introduction to Environment and Ecology (S) English Language and Communication Skills (to be designed by the Department of English literature and Culture)(S) Semester II 2.1. Micro Economics-2 2.2. Macroeconomics-2 2.3. *Development Issues in Indian Economy-1 (or Theory of International Trade) 2.4. Introductory Econometrics 2.5. Public Economics-1 2.6. Environmental Economics-1/Other Elective(s) Semester III 3.1. Theories of Economic Growth 3.2. Public Economics-2 3.3. Development Economics 3.4. Environmental Economics-2/Other Elective(s) 3.5. Computer Application in Economics (S) 3.6. Natural resource Economics Semester IV 4.1 Global Environmental Issues and Sustainable Development/Other Elective(s) 4.2. Economics of Human Development(S)/ International Macro-economics, Money and Finance 4.3. Environmental Impact Assessment or International Law and Environment or Introduction to Environmental Sociology 4.4. *Development Issues in Indian Economy-2 (or International Monetary Economics) 4.5. Research Methodology and Data Base of the Indian Economy with a focus on Environment or an alternative Elective 4.6. Project Report on an environmental issue/An alternate Elective
Notes: 3 Courses for the Semester-3 and Semester-4 are tentatively prepared and put in the course design. These need further discussion before these are finally accepted. 4 As and when adequate resources permit introduction of new specializations, courses on Business Analytics comprising of courses on Econometrics of Financial markets, Time Series Models and mathematical Finance be considered as the potential area. Resources in this specialization may be shared with the Department of Mathematics, Department of Statistics (Actuarial), and Department of Management. (*Either of the two courses on Indian Economy or the two courses in International Economics is to be opted as a combination) Course Credits, Contact Hours Program Structure and Courses offered: SEMESTER – I/II/III/IV/V/VI Seme Sub. Code Title of the course -ester
I 1.1 1.2 1.3 1.4 1.5 1.6 II 2.1 2.2 2.3 2.4 2.5 2.6 III 3.1 3.2 3.3 3.4 3.5 3.6 IV 4.1
Type of Cours e C/E/S C C C C S S
Contact hours/ week
4 4 4 4 4 4
L 3 3 2 3 3 2
I.L. 1 1 2 1 1 2
MAE01 MAE03 MAE04 MAE05 MAES01 MAES02
Micro Economics-1 Mathematical Methods in Economics Statistical Methods in Economics Macro Economics-1 Introduction to Environment and Ecology English Language through selected Economics Text
MAE07/09 MAE11 MAE12 MAEE01
Micro Economics-2 Macroeconomics-2 Development Issues in Indian Economy-1 or Theory of International Trade Introductory Econometrics Public Economics-1 Environmental Economics-1
C C C E
4 4 4 4
3 3 3 3
1 1 1 1
MAE13 MAE14 MAE15 MAEE02 MAES03 MAEE03
Public Economics-2 Theories of Economic Growth Development Economics Environmental Economics-2 Computer Application in Economics Natural Resource Economics
C C C
4 4 4
3 3 3
1 1 1
Global Environmental Issues and Sustainable Development
Human Development/ Health Economics E 4 3 Environmental Impact Assessment or International Law and Environment or Environmental Sociology S 4 3 4.4 Development Issues in Indian Economy-2 or MAE08/10 International Macroeconomics, money and Finance E 4 3 4.5 Research Methodology and Data Base of the Indian Economy with a focus on Environment/ MAE16 E 4 3 Other Electives 4.6 Project Report on an environmental issue / Other MAE17 electives E 4 3 MAE: Economics Core; MAEE: Economics Elective (Environmental Economics in the Present case) MAES: Economics Supportive 4.2 4.3
MAES04/05 MAEE05 MAEE06 MAEE07
Type of Courses Offered Core (C), Elective (E), Supportive and Socially Oriented (S) Pedagogy L: Lectures, I.L.: Integrated Learning involving Tutorials, Group Discussions, Assignments, Field work; P: Project Work Methods of Evaluation Semester
Title of the course
MAE01 MAE03 MAE04 MAE05 MAES01 MAES02
Micro Economics-1 Quantitative Methods in Economics-1(Mathematics) Quantitative Methods in Economics-2 (Statistics) Macro Economics-1 Introduction to Environment and Ecology English Language through selected Economics Text
MAE02 MAE06 MAE07/0 9 MAE11 MAE12 MAEE01
Micro Economics-2 Macroeconomics-2 Development Issues in Indian Economy-1 or Theory of International Trade Introductory Econometrics Public Economics-1 Environmental Economics-1
MAE13 MAE14 MAE08/1
Public Economics-2 Theories of Economic Growth Development Issues in Indian Economy-2 or
Method of Assessment CIE ESE (40 (60 %) %)
0 MAEE02 MAES03 MAEE03 IV MAEE04 MAES04/ 05 MAEE05 MAEE06 MAEE07 MAE15
International Macroeconomics, money and Finance Environmental Economics-2 Computer Application in Economics Natural Resource Economics Global Environmental Issues and Sustainable Development Human Development/ Health Economics Environmental Impact Assessment or International Law and Environment or Environmental Sociology Development Economics Research Methodology and Data Base of the Indian Economy with a focus on Environment/Other Electives Project Report on an environmental issue /Other electives
Note: The assessment of the student will be as laid down in the relevant Ordinances on Examination and Evaluation: (a) For passing a semester, the assessment of a student shall be based on: (i) Continuous Internal Evaluation (CIE) of 40% marks in each course, and (ii) End Semester Examination (ESE) of 60% of marks in each course. The CIE will consist of three assessments each comprising of one Sessional Test, two Term papers and one assignment each of 20 marks. Best two out of the three assessments would be used for the scores of CIE.
Detailed Course Syllabus: SEMESTER-I 1.1 Microeconomics-1 (MAE 01) Module 1 Basic elements of Micro-economic analysis, Scarcity and Choice, Optimization and Equilibrium, Comparative Statics (10) Theory of Consumer: Preference relations and their properties, Consumption Decision. (Optimizing Behavior of the consumer under alternative preference structures- Utility, Indifference curves and revealed preference). Comparative statics of the consumer‘s decision, Slutsky Equation, Derivation of Demand Curves. Demand elasticities. Welfare evaluation of economic change (prices). Consumer‘s surplus(10) Module 2: The Classical Firm and its Characteristics. Alternative Theories of the Firm, Critical evaluation of marginal analysis;(5) Theory of Production and Costs. The Production function- Assumptions, Variation in Scale, Variation in input proportions, The multi-product firm and production possibility set.
Minimization of costs in the long and the short run. Derivation of cost functions from production functions; derived demand for factors of production Supply: Profit maximization in the short and the long run. The multi-product case. Comparative statics- The firm‘s Supply function. Technical progress. Cobb-Douglas, CES, and Trans-log production functions and their properties; (15) Module 3 : Price and Output Determination under alternative markets perfect competition — short run and long run equilibrium of the firm and industry, 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; (10) 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.(10) Sen, A. (1999), Microeconomics : Theory and Applications, Oxford University Press, New Delhi. Stigler, G. (1996), Theory of Price, (4th Edition), Prentice Hall of India, New Delhi. Varian, H. (2005), Intermediate Microeconomics: A Modern Approach W.W. Norton, New York.
1.2. Mathematical Methods (MAE 03) The main objective of this paper is to train the students to use the techniques of mathematics which are commonly applied to understand and analyze economic problems. The students are expected to formulate problems in economic theory and learn simple solutions with one or two variables, leaving the solution of general problems for the paper on Application of Computers in Economics. Mathematical Methods Module-1 Concept of a function; Limits, continuity and differentiability of a real valued function; Convex and concave fubctions; Multivariable functions, Differentiation-Total and Partial; Interpretation of partial derivatives; Optimization with single and multivariable functions- Unconstrained and constrained optimization in simple economic problems; Integration-simple and Definite; (20) Module 2 : Concept of a vector - its properties; Concept of matrix - their types, Simple operations on matrices, matrix inversion*.
Determinants and their basic properties; Solution of simultaneous equations through Cramer‘s rule; Input-output Analysis* Difference equations - Solution of first order and second order difference equations*; Differential Equations (20) Module 3 : Linear programming — Basic concept; Formulation of a linear programming problem — Its structure and variables; Nature of feasible, basic and optimal solution; Solution of simple linear programming problems through graphical and simplex method*; Concept of duality and statement of duality theorems; Formulation of the Dual and its interpretation; Shadow prices and their uses; Game Theory; Strategies - simple and mixed; Value of a game; Saddle point solution; Simple applications. (20) *Use computers to solve general formulations in the paper on ‗Computer Application in Economics‘) Basic Readings Chiang, Alpha, C., Fundamental methods of Mathematical Economics; 4th Edition, McGraw Hill, 2008. Mukherji, B. and V,Pandit, (Latest Edition),Mathematical methods of Economic Analysis, Allied, 1.3. Statistical Methods (MAE 04) The paper deals with simple tools and techniques, which will help a student in data collection, presentation, analysis and drawing inferences about various statistical hypotheses. The students are expected to formulate problems in economic theory and learn simple solutions with one or two variables, leaving the solution of general problems for the paper on Application of Computers in Economics. Statistical Methods Module 1 Probability theory: Laws of addition and multiplication; Conditional probability and concept of independence; Bayes theorem and its applications; Random variable; Discrete and Continuous random variables; Probability mass function and probability density functions; (20) Expectations, moments and moment generating functions; Properties (without derivations) of Binomial, Poisson and Normal distributions. (10) Correlation: Pearson‘s product moment and spearman‘s rank correlation-their properties; Partial and multiple correlations.(10) Module- 2 Statistical Inference: Concept of an estimator and its sampling distribution; Desirable properties of a good estimator; Point and Interval estimation. Formulation of statistical hypotheses — Null and alternative; Type 1 and Type 2 errors, Goodness of fit; Confidence intervals and level of significance; Hypothesis testing based on standard normal, t, Chi-square and F tests;.(20) Basic Readings 1. Statistics for Social Sciences (with SPSS applications): Hari shankar asthana, PrenticeHall India Pvt Ltd, 2007.
1.4. Macroeconomics-I (MAE 05) Module-1 Basic Concepts:Macroeconomic Variable- Stocks and Flows, Macroeconomic relationships, Micro assumptions of macroeconomics, Problem of Aggregation: Macroeconomic Equilibrium, Flow equilibrium and Stock equilibrium, Full equilibrium. National Income Accounts, Flow of Funds Accounts and Input-Output Accounts, Concept of Wealth and Price Indices Module-2 Determination of Income and Employment:Models of Income and Employment Determination: An Overview, Walrasian interpretation of Keynesian unemployment- Patinkin, Clower, Leijonhufuud, New Keynesian Interpretation, PostKeynesian Interpretation-Sidney Weintraub, Paul Davidson, Kalecki and Minsky, New Classical Economics Module-3 Money and Inflation:Demand for Money- Friedman, Baumol, Tobin, Patinkin‘s Real Balance Effect, Issues regarding endogenous and exogenous supply of money, R.B.I.‘s Approach to Supply of Money Demand-Pull and Cost-Push Inflation, Phillips Curve Controversy, Natural Rate of Unemployment-Adaptive expectation and Rational expectation models, Lessons from the Indian Economy Module-4 Consumption Function and Investment Function:Life Cycle Hypothesis, Permanent Income Hypothesis, Random Walk Hypothesis, Classical Theory of Investment, Keynesian Theory of Investment, Accelerator, Neo-Classical and New Classical Theories of Investment. Recommended Texts1. Dornbusch, Fischer & Startz, Macroeconomics, Tata McGraw-Hill Publishing Co. Ltd. 2. Branson, W.H., ― Macroeconomic Theories and Policies, 1.5. Introduction to Ecology and Environment (MAES 01) MODULE I (20 hours) The Planet and Concept of eco-system; Major eco-systems of the world; Solar energy Flow; Bio-Geo chemical cycles:- Carbon Cycle, Hydrological Cycle, Nitrogen cycles; Climate systems and Oceanic Currents MODULE II ( 20 hrs) Economy-Environment Interaction; Entropy law and Material balance - resources and waste generation; Stock and Flow of exhaustible resources and Fund services of Eco-system resources; Problems of Resources Depletion and degeneration; Classification of resources: Renewable and Non-renewable. Biotic and Abiotic, Exhaustible and Non-exhaustible resources Biotic Resources: Vegetation and forests; Agriculture, Fishery and livestock; Biodiversity: Exhaustion and Degradation
Abiotic Resources: Land and Soil, Surface Water and ground water; Energy resources; NonEnergy mineral resources; Problems of their depletion and exhaustion (Land and Soil use and erosion must be covered here) MODULE III (15 hours) Problems of Pollution due to Overuse of Ecosystem Services (With reference to sectoral activities of agriculture, mining, industry and other activities such as transport and Health services) Air Pollution: Types of pollutants and their impact; Ozone Depletion; Global Warming; Acid rain; Urban Pollution and Urban Health Water Pollution- The Concepts of BOD and COD, Ph values, Fluoride; Biotic Waste; Fertilizer use; Euthrophication of water Bodies; Arsenic pollution; Heavy metals and Toxic wastes; Sewage Land Degradation- the problem of Solid waste disposal and contamination; The problem of Salinity and water logging MODULE IV (5 hours) Introduction to Sustainable Development: Concept, Sustainable resource use and pollution control policy. (This is to provide an interface with economics. The teacher is not expected to teach the theory of sustainable development.) Number of Credits: 4 All contact hours are to be Lectures.
Number of hours: 60 hrs.
RECOMMENDED READINGS: 1. Sengupta, Ramprasad, Ecology and Economics: An Approach to Sustainable Development, Oxford University Press, 2001. 2. Eugene P.Odum, Ecology, 1996, Sinauer Associates Inc. chapters 3 and 5 Parts from : Y.Anjaneyulu, Introduction to environmental Science, B.S.Publications 2004
1.6. English Language and Communication Skills (MAES 02) The Course, contact hours and the method of assessment to be provided by the Department of English and Culture.
Detailed Course Syllabus: SEMESTER II 2.1.
Microeconomics-2 (MAE 02)
Theory of 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; (15) General Equilibrium Partial and general equilibrium, Walrasian excess demand and inputoutput 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;.(15) Welfare Economics: Pigouvian welfare economics; Pareto optimal conditions; Value judgment; 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, equity-efficiency trade off.(15) Market failure and the Second best: Causes of Market Failure, Instances of Market failure, the theory of Second Best, Government action and Government Failure.(15): References Gravelle, H and Ray Rees (2004), Microeconomics, 3rd edition, Prentice HallLongman London. Mas-colell, A, Michael D. Wiston and Jerry G. Green (1995), Microeconomic Theory, OUP, New York. Sen, A. (1999), Microeconomics : Theory and Applications, Oxford University Press, New Delhi. Stigler, G. (1996), Theory of Price, (4th Edition), Prentice Hall of India, New Delhi. Varian, H. (2004), Microeconomic Analysis, W.W. Norton, New York.
Macroeconomics- II (MAE 06)
Preamble The Course will selectively cover recent developments in macroeconomics of fluctuations, open economy, policy, micro-foundations. The focus will be on substantive issues and applications of basic principles. The workhorses of macroeconomic issues will be applied to analyse economywide topics of current interest. Familiarity with the material covered in texts as mention in Macroeconomics-I is assumed. Module-1 Macroeconomics in the Short Run Fluctuations of Macroeconomic variables, The Stylized facts, Wage-Price rigidities, and Keynesian Cycles.
Open Economy Issues: Open economy IS-LM-MP, The Mundell-Flemming Model, Stabilisation, Macroeconomic Policy and Exchange Rate Regimes. Asset Price Volatility, Interest rate and Exchange rates, Crisis models and Strategic interactions. Module-2 Micro-foundations of Real and Nominal Rigidities Non-Walrasian model and Economic Fluctuations, Imperfect Information, Imperfect Competition and Asymmetric Information, Solving for Rational Expectation Equilibrium, Coordination Failure Module-3 Macroeconomics in the Medium Run:Ricardian Equivalence, The Open economy Consumption Smoothing, and foreign capital, The firm; Tobin‘s ‗q‘ theory of investment , Research and Development, Human Capital and Externalities-Empirical Issues, Real Business Cycle Dynamics. Module-4 Macro Policy:Coordination of Fiscal and Monetary Policy, Rules versus Discretion, Credibility, Commitment devices, Monetary Transmission Mechanism and Targeting. Recommended Texts1. Romer D. (2001) Advanced Macroeconomics. McGraw Hill Book Company: London, 2. Blanchard Olivier & Fischer Stanley. Lectures on Macroeconomics. Cambridge: MIT Press, 3. Heijdra B., van der Ploeg F. (2002) Foundations of Modern Macroeconomics, Oxford University Press, 2.3 Development Issues in Indian Economy-1 (MEA 07-General Issues) Unit 1 Economic development and institutions – Role of state, markets and civil society institutions.. Characteristics of Indian markets and need for state interventions. Growth of Indian economy since independence – Sectoral growth rates and changing structure. Poverty trends. Inequalities and regional imbalances. Unit-2 Pre 1991 Development policies: Role of central planning, Import substitution and development of capital goods and heavy industries, Industrial licensing and exchange controls, Growth of public sector growth. Post 1991 development in global economies; Trade and exchange rate liberalization, market oriented reforms, Capital flows from World Bank and IMF. Structural adjustment programmes and conditionalities. Exchange rate and trade policy changes, Industrial policy and setting up of regulatory structures like SEBI, TRAI, IRDA, etc. Unit 3 Growth of domestic savings and investment. Role of foreign capital - borrowing, equity and direct investment. Technology inflows. Monetary policy issues: Price level and inflationary trends – Composition of wholesale price index. Retail prices.
2.4 Theory of International Trade (MAE 09) Module 1 ‗Pure‘ theory of trade – Classical theory, Comparative advantages and labour productivity differences as the basis of trade. ―Trade is better than no trade‖. Constant costs and complete specialization in a two good, one factor model. Extension to multi country and multi commodity trade. Gains from trade and terms of trade. Neo- classical trade theory – two factor, two goods and variable cost model. Opportunity cost. Role of demand even with same production function. Incomplete specialization. General equilibrium in two-country, two goods open economy model. Heckscher Ohlin factor endowment model. From equalization of commodity prices to factor price equalization. Stolper-Samuelson theorem. Specific Factor Model Module 2 Leontieff Paradox and factor intensity reversals and pattern of trade Intra-industry and intra-firm trade. Modern explanations of trade patterns Transportation costs. Increasing returns. Product differentiation. Trade under imperfect competition,Technology and demand. Empirical testing of trade models. Leontieff Paradox and factor intensity reversals – Solow, Arrow-Minhas results with CES production function. Global trade patterns. Gains from trade. Distribution and welfare. Terms of trade and Offer curves. Growth and terms of trade effects. Rybczynski theorem. Immiserizing growth. Growth and factor mobility – immigration and capital mobility. Trans-national corporations Module 3 Trade policy and Theory of trade interventions. General equilibrium effects of tariffs on welfare. Offer curves and tariffs. Arguments for protection. Quotas. Comparison of tariffs and quotas. Countervailing duties and export subsidies. Effects of tariffs on factor prices. Effective rate of protection. Dumping. Non-tariff barriers. Voluntary Export Restraints, Export Subsidies etc. Theory of customs union – ‗second best‘ argument – trade creation and trade diversion, Stages of integration Regional trade groupings, GATT and WTO References Pugel, T.A.( 2008), International Economics, 13th Edition, Tata Mcgraw hill publishing Co, New Delhi. Bhagwati, J. N., A. Panagariya and T.N.Srinivasan(1998), Lectures on International Trade, OUP,NewDelhi, Second Edition. Krugman, P.A. and M Obstfeld (2003), International Economics: Theory and Policy,Sixth Ed.
2.4 . Introductory Econometrics (MAE 11) Module-1 Classical Linear Regression Model- two and three variables- estimation testing and forecasting, Introduction to multiple linear model and tests of linear restrictions. (15) Module-2 Multicollinearity. Heteroscedasticity and Auto-correlation: Causes, consequences, common tests and remedies. (15) Module-3: Models for Binary Choice-The logit and the probit regression. Dummy variables (15) . Module-4 Simultaneous Equation Models. Identification. Methods of Estimation- Properties of estimarors (Without Derivations and Proofs). (15) Recommended Text Book 1. Damodar N. Gujarati, Basic Econometrics; 4th Edition, McGraw Hill, 2008. Supplementary References 2. Damodar Gujarati, Essentials of Econometrics: McGraw Hill, 2005. 3. C. Mukherjee, H.White and M. Wuyts, Econometrics and Data Analysis for Developing Countries, Routledge, 1998. 4. Ramu Ramanathan, Introductory Econometrics with Applications: Cengage Learning (Thompson), 2002. 2.5 Public Economics-1 (MAE 12) Introduction Scope and Methods of Public Economics, Economic Analysis of Public Policy, Market Economy and Mixed Economy, Ways of Government Intervention (10) Theory of Public Goods Alternative Classifications of Public Goods, Optimal Provision of Public Goods, Private Provision of Public Goods, Nash-Cournot Solution, Preference Revelation, Samuelson and Lindahl Equilibrium, Club Goods Model (20) Problem of Externalities and Solutions Positive and Negative Externalities, Negative Externalities and Social Cost, Choice of Policy Instruments, Pigouvian Tax, Coase Theorem and Private Negotiation (Private Property Solution) Tradable Permits, Subsidy Solution, Externality Solutions and their Problems (15) Theory of Regulation and Pricing Economic Rationale of Regulation, Concerns of Regulation like Environment, Health and Safety, Network Economies, Regulating Rate Structure, Public Utility Pricing, Marginal Cost Pricing and Two-Part tariff, Private Provision of Public Goods (15)
Reference Books John Leach (2004); A course in Public Economics , Cambridge University Press Jean Hindriks and Gareth D. Myles (2006), Intermediate Public Economcs, MIT Press Peter Abelson (2008); Public Economics: Principles and Practices, Oxford University Press David A. Starrett (1988), Foundations of Public Economics, Chambridge University Press Other Useful references Viscuss WK (2009); Economics of Regulations and Anti Trust, Joseph Harrington Press Kniesner T.J. (2005); Economics of Regulation: Principle and Regulations, MIT Press Kahn Alfred Edward (1988); Economics of Regulations: Principles and Institution, MIT Press Dennes C. Muller (2003); Public Choice III, Cambridge University Press 2.6. Environmental Economics-1 (MAEE 01) MODULE I (10 Hrs) What is environmental economics? Distinction between environmental Economics and natural resource economics. Issues of Environmental economics: Problems of Market Failure: Public bads and externalities. Social choice of optimum pollution. (Kolstad, Chapters1-4) MODULE II (15 Hrs) Theory of environment Regulation: Price Rationing, Pigovian taxes; Subsidies for Abatement of pollution-The case in the short and long run; Property Rights and the Coasian Approach: bargain Solution. (Kolstad, Chapters 5-8) MODULE III (10 Hrs) Quantitative regulation:Command and Control- Standard setting; Tradable pollution permits (Kolstad, Chapter 9); Mixed permit- charge system ( H, S & W chapter 3); Output Tax MODULE IV (15) The Problem of uncertainty and risk in Environmental policy choice; Regulation with unknown Control cost; Monitoring emissions, enforcement and Moral hazard; Environmental Risk and uncertainty, Disaster management and insurance. (Kolstad chapters 10-12); Lecture Hours: 50
Total: 60 hrs
Suggested Texts : 1. Kolstad, C, D. (2003) Environmental Economics, Oxford university Press 2. Hanely, Nick, Jason F.Shorgen, and Ben White, Environmental Economics: In Theory and Practise 1999, MacMillian
Detailed Course Syllabus: SEMESTER III 3.1 Theories of Economic Growth (MAE-11) Module-1 Problem of Economic Growth- Problem of Economic Growth and the General Solution; Growth Equilibrium: Existence, Uniqueness and Stability; Harrod –Domar Model of Economic Growth Module-2 Neo-Classical Models of Growth: Growth model of R.M. Solow, Instability & Convergence debate, Ms. Joan Robinson and Concept of Golden Age and Golden Rule of Accumulation; Models of Optimum Economic Growth- Keynes-Ramsey Rule, Cass-Koopmans Model Module-3 Neo-Keynesian Models of Growth & Distribution- Kaldor and L. Pasinetti Technology and Growth- Hicks, Harrod and Solow- Neutrality of Technical Change, Embodied and Dis-embodied Technical Change, Growth Accounting. Money and Growth- James Tobin and H.G. Johnson; Module-4 Endogenous Growth Models- AK Models, Lucas Model of Human Capital, Romer Model of Endogenous Innovation. Recommended Text1. Barro, Robert J. and Xavier Sala-i-Martin, Economic Growth, McGraw-Hill, 2. H.G. Jones, ― An Introduction to Modern Theories of Economic Growth‖ McGraw-Hill Book Company 3. Jones C.I., ―Introduction to Economic Growth‖ W.W. Norton & Company, New York 4. Romer, David, Advanced Macroeconomics, New York: McGraw-Hill Co., 5. Sen, A.K.,ed.(1970) Growth Economics, Penguin Books. 6. Blanchard, O. and Fischer, S. 1989. Lectures on Macroeconomics.
3.2 Public Economics II (MAE-10) Public Finance Objectives and Instruments of Fiscal Policy, Taxation-General Principles: Efficiency, Equity, Cost of Collection and Compliance; Tradeoff between Efficiency and equity; Effect of Taxes on labor supply and SavingsIncome, commodity and wealth tax. Laffer‘s Curve, Superiority of direct taxes over indirect taxes (Commodity, sales, turnover or value added tax) (15) Non-Tax Fiscal Instruments: Profit and Dividends, Rents and Royalties, Non-revenue Effects of Non-Tax Instruments (5) Public Debt: Public Debt and External Debt, Theories of Public Debt, Ricardian Equivalence, Debt Management Techniques (10) Budget and Fiscal Policy: Capital and Revenue Accounts, Dynamic Nexus between Two Accounts, Budget Deficits, Theories of Deficits, Indian Budget Deficits: Union and States, (10) Public Expenditure: Leviathan Hypothesis, Revenue/Capital, Plan/Non Plan and Development/ Non development expenditure, Niskanen Model, Efficiency and Equity Tradeoff, Transfers and Subsidies, Financing of Social Programs (10) Fiscal Federalism: Principles Determining Federal Division of Revenue and expenditure, Vertical and Horizontal Imbalances, Transfer Mechanism in India, Role of Finance & Planning Commissions, Sharing of Taxes, Non-tax Revenues and Grants (10) Selected Readings Musgravw R.A. and P.B. Musgrave (1989); Theory and Practice of Public Finance 5 th ed, Tata Mc Graw Hills Gupta Janak Raj (2007); Public Economics in India: Theory and Practice, Atlantic Publisher Bagchi Amaresh; Readings in Public Finance, Oxford University Press
3.3 Development Economics (MAE 12) Unit 1 Concept of Development – From GDP per capita to holistic indicators. PPP and international differences. International poverty line and estimates of poor. Factors of development. Colonialism and dependency theories. Schumpeter –Innovation, enterprise and process of ‗creative destruction‘. Rejection of trade as the ‗engine of growth‘. Nurkse and Prebisch arguments. Structural changes: Kuznets analysis of structural change. (15 Hours) Unit 2 Concept and Measures of Poverty-, Pareto Distribution, Head- Count Ratio, Income Gap Ratio, FGT Index. Concept and Measures of Inequality – Lorenz Curve and Gini coefficient, Issues in composite Indices, Problems of Aggregation. Inequality and Growth- the inverted U curve hypothesis, Inequality and growth – Interrelationships. (15 Hours) Unit 3 Role of capital formation – vicious circle arguments, Rostow‘s stages of development, Kuznet‘s economic history analysis of characteristics of development. Capital formation and allocation of investment- Balanced and unbalanced growth theories. Rosenstein –Rodan and Hirschman. Denison‘s growth accounting – Contribution of labour, capital and Technology. (15 Hours) Unit 4 Role of agriculture. Dual economies and surplus labour argument, Ranis-Fei Model, Unemployment- efficiency wage theory as an explanation for wage rigidity and involuntary unemployment, Collusive theory of unemployment. Population growth and critical Demographic dividend. (15 Hours)
Required Readings: A.P. Thirlwall: Growth and Development, ELBS. D Ray: Development Economics, OUP. S. Ghatak: Introduction to Development Economics, Rutledge. Kaushik Basu: Analytical Development Economics. The Less Developed Economy Revisited, OUP. D Lal; The Poverty of Development Economics, OUP. G. Meier: Leading issue in Economic Development (4th Edition),OUP. Meier and Rauch: Leading Issues in Economic Development (8th Edition),OUP
M.P. Todaro and S.C. Smith: Economic Development (8th Edition), Pearson.
3.4 Environmental Economics-2 (MAEE2) MODULE I(15 Hrs) A. Economic Valuation of Environmental Damage or Benefits i) Economic Theory and Measurement of Environmental Benefits. Demand for Environmental Service – Willingness to Pay and Willingness to Accept. ii) Concepts of Consumer‘s Surplus. Compensating and Equivalent Surplus in the context of rationed goods and the Environment. MODULE II (20) i) Alternative Approaches and Methods of Environmental Valuation – Revealed Preference and Stated Preference Method – Hedonic Pricing, Household Production Function, Travel Cost Method, Defensive cost and Contingent Valuation Method. Case studies to be discussed. ii) Valuation of Health and Human Life iii) Valuation of Bio-Diversity MODULE III (10) Macroeconomic Aspects of the Environment a. The concept of Sustainable Development. b. Measuring Sustainable Development c. Sustainable Macroeconomic Accounting of National Income and Wealth. d. Green Accounting. MODULE IV (15) Development and Environment: The Environmental Kuznets Curve. Theory of KrutillaFisher Equation for Preservation or Development. Environmental Cost-Benefit Analysis for Sustainable Development. Rationale of Discounting the Future in the context of Sustainability Endogenous Growth Theory and Sustainable Development. Technological Change and the Environment Total Hours: 60 hrs. Tutorials can be conducted depending on the need and the nature of the topic. The allocation for tutorial should not exceed 20%. Suggested Readings: 1. Johansson Per-Olov: The Economic Theory and Measurement of Environmental Benefits, Cambridge University Press, Cambridge, 1987. 2.
Kolstad C.D., Environmental Economics, Oxford University Press, 2000.
3. Bhattacharya R.N. (ed.), Environmental Economics: An Indian Perspective, Oxford University Press, 2001.
4. M.N. Murthy Environment, Sustainable Development, and Well-being Valuation, Taxes, and Incentives, OUP May 2009 5. Oates W.E. (ed.), The Economics of the Environment, An Elgar Critical Writings Reader, Edward Elgar, 1994. PART 4 REFERENCES 6. Jeoren,C.J.M van den Bregh (Ed) Hand Book of Environmental and Natural Resource Economics, (Edward Elgar, 1999) Part VI paper numbers 42, 44, 45, 46. 7. Pearce D.W. And R.K. Turner, Economics of Natural Resources and the Environment, Harvester Wheatsheaf, 1990. 8. Kadekodi, Gopal K., Environmental Economics in Practice, Oxford University Press, 2004. 9. Arrow, Kenneth J. and Anthony C. Fisher, ―Environmental Preservation, Uncertainty and Irreversibility ―Quarterly Journal of Economics, Vol. 87, 1974. 10. Krutilla John V. (1967). ―Conservation Reconsidered‖, American Economic Review, Vol. 57, 1067. 11. Sujarto Marjit (ed) India Macro Annual 2007, Sage publications. 12. Dasgupta P., Human Well-being and the Natural Environment, Oxford University Press, 2001.Chapter 9 13. Kanchan Chopra and Vikram Dayal (Ed). Hand book of Environmental Economics in India. Oxford University Press 2009. Chapter 2 by Partho Dasgupta and Maelier
Computer Application in Mathematical Economics and Statistics (MAES3)
3.6 Natural Resource Economics (MAEE3) MODULE I (10 HRS) Theory of General Equilibrium incorporating Resources and Environmental Pollution. MODULE II (20 hrs) Economics of Renewable Resources: Biotic and A-biotic. Optimal Management of Renewable Resources – Cases of Water, Soil, Forest, Fishery, Bio-Diversity: Theories of Pricing, Depletion and Augmentation of Resources. Agriculture and the Environment, Land Use and Environment in Developing Economies. MODULE III (15Hrs) Economics of Non-Renewable Resources: Theories of Depletion and Investment for Exploration. Pricing and Market. Natural Resource Cartels: CASES OF Energy and Non-fuel Minerals Energy, Environment and Economic Growth
MODULE IV (Hrs15) Economics of Common Property Resources and Institutions. Participatory Development for Sustainability. Specific Issues of Sustainability for Developing Economies: i) Population, Poverty and Environmental Resource Base. ii) Human Development and Environmental Sustainability. Distributional and Equity Issues in Environmental Policy. Total Hours: 60 hrs. Tutorials can be conducted depending on the need and the nature of the topic. The allocation for tutorial should not exceed 20%. Suggested texts: Suggested Texts and references : 3. Hanely, Nick, Jason F.Shorgen, and Ben White, Environmental Economics: In Theory and Practise 1999, MacMillian Chapters 7-11. 4. Hanely, Nick, Jason F.Shorgen, and Ben White,, Introduction to Environmental Economics, OUP, 2004, (Chapters 6,10,11,12,13 and 14 For module I) 5. Kneese, A.V., R.U. Ayres, Production Consumption and externalities, American Economic review, 1969, June Vol.59, 282-97 6. Kneese, A.V., R.U. Ayres and R.C. d‘Arge, Economics of the Environment: A Material Balance Approach, Journal of Political Economy, Vol. 86, 1970.
Detailed Course Syllabus: SEMESTER IV 4.1. Global Environmental Issues and Sustainable Development (MAEE4) MODULE I (15 hrs) Trans-national Issues and the Environment i)
Trade and Environment: Trade, Foreign Investment and the Environment. Ecological dumping and standards
Trans-national Pollution. Management of the Global Commons
Globalization, Economic Reforms and the Environment
MODULE II (10 hrs) Economics of Global Warming and Climate Change: Nordau‘s Dice Model. MODULE III (15hrs) Energy, Environment and Economic Growth: Indian Energy and Environment issues and Climate Change negotiations. MODULE IV (15 hrs) Environmental Issues and Policies in India: Water, Land Transport and Urban development and related issues
Total lecture Hours: 45 Suggested readings for Module I Sengupta, R.P, High Economic growth, Equity and Sustainable Energy Development in Kanchan Chopra and Vikram Dayal (Ed). Hand book of Environmental Oxford University Press 2009. Sengupta, R.P, ―Economics in India. Prospects and policies of low carbon Economic growth in India‖, NIPFP Publications 2010. Available on the net. Kavi Kumar, in Kanchan Chopra and Vikram Dayal (Ed). Hand book of Environmental Economics; Oxford University Press 2009. Joyashree Roy in Kanchan Chopra (Ed).2009 Module II Nicholas Stern, The Economics of Climate Change: Stern review, Cambridge University Press, 2007 Module III 1. Mohan Munasinghe and James Gustave Speth, Sustainable Development in Practice Cambridge University Press 2. Sustainable Energy in Developing Countries: Policy Analysis and Case Studies, Peter Meier and Mohan Munasinghe (Cheltenham: Edward Elgar)
Module IV 1. Remaining sections in Kanchan Chopra and Vikram Dayal (Ed). Hand book of Environmental Oxford University Press 2009. 2. The integrated energy Policy of the Planning Commission 4.2 Environmental Impact assessment (MAEE 05) (Course outline under preparation) Or International laws and Environment (MAEE 06) (Course outline under preparation) Or Environmental Sociology (MAEE-07) (Course outline under preparation) 4.3. Development Issues in Indian Economy-2 (MEA 08-Sectoral Issues) Unit-1 Structure of Rural Economy: Farm and Non-farm sector Growth rate of agriculture – main features. Recent deceleration of agricultural growth and public investment in agriculture. Agricultural prices, Agriculture and non-agriculture terms of trade. Agricultural price policy: Support prices, procurement prices and buffer stocks. Import and export controls on agricultural commodities. Futures commodity trading. Market regulations of agricultural commodities. Agricultural Policy in India- Its contribution to agricultural development, Food security and poverty reduction Major subsidies in agriculture: Fertilizer, Power, Irrigation and input subsidies. Unit-2: Rural livelihood Livelihoods and Employment: Structure of rural poverty Food security and the Public Distribution System; Employment Security- NREGA Unit 3: Industry Industrial growth and diversification. Policy changes and industrial growth – examples of automobile and telecom sector growth. Industrial price regulations and subsidies through price controls – examples of oil and petroleum and fertilizer sectors. Unit-4 miscellaneous Issues
Infrastructure sectors. Investment requirements of roads, power, ports and other infrastructure sectors. Policy initiatives to bridge the gaps e.g allowing foreign investment and private-public partnership mode, SMEs and Informal sector Labour market reforms - Exit policy and liberalization of labour markets. 4.4. International Macro-economics, money and finance (MAE 10) Unit-1 International Macro-economics- Prices and Output in an open economy. Long-run adjustment mechanisms. Automatic adjustment – foreign trade multipliers. Fiscal and monetary policy under flexible exchanges. Interdependence and Multi-lateral co-ordination. Balance of payments. Current account and fiscal deficit. Capital account. Disequilibrium and adjustment. Elasticity conditions for adjustment in trade account. Currency markets transactions. Currency standards, convertibility and reserve currencies. Exchange Rates. Unit-3 Purchasing power parity. Interest rate parity. Nominal, real and effective exchange rates. . Fixed and flexible exchange rates. Exchange controls. Short-run and long run capital movements. Hedging, speculation and hot money transfers under capital account convertibility. Implication of capital flows—Mundell-Fleming Model, currency crisis and contagion. Unit-3 Money and the role of banks. EU and monetary integration. Dollarization. Optimum currency areas, Monetary, banking and foreign exchange regulations. The International Monetary Fund. Reforming the international institutional architecture. China and reserve currency issues. 4.5 Research Methodology and Data Base of the Indian Economy with a focus on Environment/Other Electives (MAEE6) 4.6 Project Report on an environmental issue /Other Electives (MAEE 7)