Semester-VI

Public Economics

Paper: ECO-A-CC-6-13-TH

Unit 1. Government in a Market Economy

• Market failure and externalities; public and merit goods;

• Government intervention;

• Public Expenditure for financing development

Unit 2. Choice and Public Economics

• Characteristics of Pure Public Good; Distinction between Pure Public Good and Private Goods

• Market Failure in case of Pure Public Good Optimal provision of Public Goods - Private Provision and Public Provision of Public Goods,

• Lindahl Equilibrium,

• Voting Equilibrium.

Unit 3. The Revenue and Expenditure of the Government

• Classification of Taxes; Canons of Taxation;

• Principles of Taxation - Benefit Principle, Equal Sacrifice Principle, Ability to Pay Principle;

• Incidence and Burden of Taxes;

• Effects of taxation on income distribution, work efforts, and on savings,

• The Laffer curve;

• Comparison between direct and indirect taxes – income and substitution effects;

• Optimal Taxation

Unit 4. Public Finance

• Meaning and Classification of Public Expenditure - government budget and its types, government expenditure and tax multipliers, balanced budget multiplier;

• Meaning of Public Debt; Sources of Public Borrowings: internal and external borrowing; Effects of Public Debt.

• Indian Public Finance – Fiscal Federalism in India

Development Economics

Paper: ECO-A-CC-6-14-TH

1. Meaning of Economic Development

• Income Approach and Capability Approach,

• Construction and interpretation of HDI; international variations in development measures; comparing development trajectories across nations and within them.

• Dependency school of development.

2. Poverty and Inequality

• Inequality axioms; a comparison of commonly used inequality measures.

• Gender Inequality, connections between inequality and development.

• Poverty measurement, HPI; poverty traps and path dependence of growth processes.

• Vicious Circle of Poverty Hypothesis

3. Dual Economy Models

• The concept of surplus labour and disguised unemployment

• Peasants and Dualism with and without surplus labour

• Interdependence of agriculture and Industry (Lewis model, Ranis-Fei model)

• Rural-Urban Migration (Harris- Todaro model)

4. Population Growth and Economic Development

• Basic concepts (Birth and Death Rates, mortality, fertility)

• Demographic transition theory

• Cost of children, externalities

• Low Level Equilibrium Trap models and their criticism-critical minimum effort theory (Nelson and Leibenstein).

5. Development Strategies

• Balanced vs. Unbalanced Growth Theories

• Choice of Techniques

6. Political Institutions and the State

• Definition of institutions, Evolution of Political and Economic Institutions.

• The determinants of democracy.

• Alternative institutional trajectories and their relationship with economic performance.

• Within-country differences in the functioning of state institutions. State ownership and regulation. Government failures and corruption.

Discipline Specific Elective- A(2)

Money and Financial Markets (MFM)

paper: ECO-A-DSE-6-A(2)-TH

1. Introduction to money and Money and Banking

• Concept, functions, measurement; theories of money supply determination.

2. Financial Institutions, Markets, Instruments and Financial Innovations

• Role of financial markets and institutions; problem of asymmetric information – adverse selection and moral hazard; financial crises.

• Money and capital markets: organization, structure and reforms in India; role of financial derivatives and other innovations.

• Why banks are special Institutions? How banks act as a leveraging mechanism?

3. Financial Markets and Interest Rates Behaviour

• Determination; sources of interest rate differentials;

• Theories of term structure of interest rates; interest rates in India.

4. Banking System

• Balance sheet and portfolio management;

• Multiple Deposit Creation,

• Determinants of the Money Supply.

• Indian banking system- Changing role and structure- banking sector reforms

5. Central Banking and Monetary Policy

• Functions, balance sheet; goals, targets, indicators and instruments of monetary control;

• Monetary management in an open economy; current monetary policy of India.

Discipline Specific Elective- A(2)

Issues in Indian Economy (IIE)

Paper: ECO-A-DSE-6-A(2)-TH

1. Growth and structural changes

• Trends in national income and per capita income- Analysis with official statistics

• Structural Composition of national income and employment with NAS and NSSO data

2. Macroeconomic Policies and Their Impact

• Fiscal Policy

• Trade and investment policy

• Financial and monetary policies

• Inflation and measures to control inflation

• Labour laws and regulation

3. Policies and Performance in Agriculture

• Growth; productivity; agrarian structure and technology, capital formation

• Agricultural marketing

• Food security and food policy

• Pricing and procurement

• WTO and Indian agriculture

4. Policies and Performance in Industry

• Output, employment and productivity growth

• Regional variation of industrial growth

• Small scale industries- problems and prospects

• Public sector; competition policy

• Foreign direct investment in industry

• Economic reforms and industry

5. Trends and Performance in Services

• Formal and informal sectors

• Banking and insurance

• Trade in services

ECO-A-DSE-6-A(2)-P

Practical Paper

Students will have to take help of primary or secondary data and will have to make statistical/econometric analysis of any problem on Indian economy as mentioned in this course (i.e. the topic will not be outside the course) on the basis of the use of statistical softwares like SPSS/STATA/R/E-VIEWS .A project report is to be prepared by the candidate analysing the results obtained from the use of any one of the above-mentioned statistical softwares. Though there is a project report, basically it is a computer laboratory based practical on the basis of which the project report will be constructed. Use of computer laboratory is essential for running the above-mentioned statistical softwares and also for handling the data. In this sense the project work is to be interpreted as a Practical (it is not a separate project paper).The project should be supervised by a full time teacher of the subject belonging to the institution. All total 60 hours (30 Practical classes) have been allotted for the practical part of the course. The norm of the examination will be similar to that of a practical examination. To be more specific, the practical examination of the project is to be conducted jointly by the supervisor and an external examiner on the basis of the content of the project report, use of the above-mentioned statistical softwares in the computer laboratory (in the form of running the regressions used in the project or by determining the various measures of descriptive statistics used in the project in front of the examiners just like that of a practical examination) and also on the basis of a viva-voce based on the candidate‟s knowledge about the data set (especially data sources in case of secondary data) along with economic interpretation of the regression results. In case the student uses primary data it should be related to one of the topics covered in the course and why primary data is used instead of secondary data is to be justified by the student. In case of use of primary data students should have good knowledge about the sampling procedure used in collecting data. On the day of the practical examination students should carry with them soft copy of the data set used in the project.

Discipline Specific Elective- B(2)

Environmental Economics (EE)

Paper: ECO-A-DSE-6-B(2)-TH

Unit 1. Introduction

• What is environmental economics;

• Review of microeconomics and welfare economics.

• Interlinkages between the economy and environment

Unit 2. Efficiency and Market Failure

• Pareto optimality and market failure in the presence of externalities

• Property rights and the Coase theorem

• Public goods/ bads and market failure

Unit 3. The Design and Implementation of Environmental Policy

• Pigouvian Fees – Single Polluter, Multiple Polluters, Fees vs Subsidies

• Regulating Pollution : Command and Control, Economic Incentives

• The Basic Theory of Tradeable Pollution Permits

Unit 4. International Environmental Problems

• Transboundary Pollution – Transboundary Pollution as a problem of international externalities

• International Trade and Environment – Pollution Havens

• International Environmental Agreements – Basic idea about Montereal and Kyoto Protocol and Talks on Climate Change

Unit 5. Measuring the values of Environmental Costs and Benefits

• Concepts of Willingness to pay (WTP) and Willingness to accept compensation (WTAC), Difference between the two concepts

• Direct and Indirect Methods of Valuation – Contingent valuation, Travel Cost, hedonic Pricing – basic concepts only (no econometric techniques) – when they should be used, what are the advantages and disadvantages of these methods.

Discipline Specific Elective- B(2)

Issues in Development Economics (IDE)

ECO-A-DSE-6-B(2)-TH

1. Demography and Development

• Demographic concepts; birth and death rates, age structure, fertility and mortality

• Demographic transitions during the process of development; gender bias in preferences and outcomes and evidence on unequal treatment within households

• Connections between income, mortality, fertility choices and human capital accumulation

• Migration.

2. Land, Labor and Credit Markets

• The distribution of land ownership; land reform and its effects on productivity

• Contractual relationships between tenants and landlords

• Land acquisition; nutrition and labor productivity

• informational problems and credit contracts

• Microfinance

• Inter- linkages between rural factor markets.

3. Individuals, Communities and Collective Outcomes

• Individual behavior in social environments

• Multiple social equilibria;

• Governance in organizations and in communities;

• Individual responses to organizational inefficiency.

4. Environment and Sustainable Development

• Defining sustainability for renewable resources

• A brief history of environmental change;

• Common-pool resources;

• Environmental externalities and state regulation of the environment;

• Market based instruments, economic activity and climate change.

5. Globalization

• Globalization in historical perspective

• the economics and politics of multilateral agreements;

• Trade, production patterns and world inequality

• Financial instability in a globalized world.

• India in the context of global economy