Economics

Rift Valley University
Faculty of Business and Social Sciences

Department of Economics
BA Degree Program in
Economics
Curriculum for Degree of Bachelor of Arts in Economics
March 2021
Addis Ababa, Ethiopia

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Contents Page
Background ......................................................................................................................................... 3
Vision & Mission of the Department .............................................................................................. 5
Rationale.............................................................................................................................................. 5
Rationale for Curriculum Change ....................................................................................................... 6
Objective .............................................................................................................................................. 7
Professional Profiles .......................................................................................................................... 8
Graduate profile ................................................................................................................................. 8
Admission Requirement ................................................................................................................. 10
Duration of the program ................................................................................................................. 10
Graduation requirement ................................................................................................................. 11
Degree Nomenclature ..................................................................................................................... 11
List of Modules/Courses ................................................................................................................ 12
Regular Program: Economics program, Coursecourse breakdown by year and semester for
Four years.......................................................................................................................................... 15
Extension Program: Economics program, Coursecourse breakdown by year and semester
for Five years .................................................................................................................................... 19
Teaching Methodology ................................................................................................................... 24
Method of Teaching ......................................................................................................................... 24
Medium of Instruction .................................................................................................................... 24
Required facilities ............................................................................................................................ 24
Assessment ....................................................................................................................................... 24
Grading System ................................................................................................................................ 24
Description of the Grading System ............................................................................................... 25
Quality Assurance ........................................................................................................................... 25
Course descriptions ......................................................................................................................... 25
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1. INTRODUCTION
1.1. Background of Rift Valley University
Rift Valley University initially conceived as College, was established in Adama City of East
Shawa Zone, Oromia National Regional State in October 2000 G.C, foreseeing the core values of
good governance, commitment to quality services and community development, gender
sensitivity, secularism and non-partisan, creativity, responsiveness, team work spirit, and work
culture parallel to the nation’s development goals along with the purpose of producing
competent, ethical and skilled manpower without making any distinction between people of
different ethnic, religious, social, economic and political backgrounds.
After securing its legal personality, the then Rift Valley College strongly worked on the
accreditation processes of its training and education programs from all regulatory bodies, and
managed to get full accreditation from Higher Education Relevance and Quality Agency and
Regional States TVET Agencies. Taking its flourishing capacity and quality service into account,
the Ministry of Education, in collaboration with HERQA, granted the rank of University College
in August 2007 G.C. This was not an easy task and a simple success story for the institution.
The two regulatory bodies had conducted rigorous evaluation of the systems of the institution,
physical facilities and learning resources of its campuses and faculties to come to decision of
such status change. Afterwards, Rift Valley University College rigorously worked towards
becoming a full-fledged university and realized itself as Rift Valley University in August 2014
G.C.
Currently, Rift Valley University being a pioneer and the largest Private Higher Learning
Institution in Ethiopia has been delivering quality education to the citizens and foreigners who
have lived in the country for different purposes. Furthermore, the University has 50 Campuses, 3
TVET Colleges and College of Open and Distance Education (32 accredited branches) with
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diversified fields of study across the country. Over the last two decades, thousands have joined
and graduated with Technical and Vocational Education and Training (TVET), Bachelor’s
degree, and Master’s degree that enabled them to support themselves and their families. Others
have also managed to create their own jobs whereby they exhibited the merits of their training
and education at Rift Valley University in fostering the already established development goals of
the country.
1.2. Mission, Vision and Values of Rift Valley University

1.2.1. Mission of the University
Rift Valley University exists to produce graduates who are competent, committed and ethical
citizens; to engage in innovative and problem solving research; and to deliver sustainable
community services.
1.2.2. Vision of the University
RVU aspires to be one of the leading universities in teaching, research and community
engagement in Africa and beyond by 2030.
Motto of RVU
“Hub of Excellence”
1.2.3. Values of RVU
The following are the values cherished by RVU:
1. Quality and Excellence

2. Responsiveness to customer needs
3. Good Governance
4. Professionalism and Academic Freedom
5. Team Spirit
6. Professional Integrity and Ethical Practices
7. Creativity and Innovativeness
8. Commitment to Community Services
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9. Recognition of Diversity and Gender Sensitivity
10. Social Responsibility
2. Background of the Department
The Department of Economics was first launched in 1953 with the objective of addressing the
country‟s trained human power shortage in the field of Economics. The program provides
instruction on economic theories and a rigorous foundation in the analytical tools and applied
areas of economics, relying on mathematical and statistical techniques.
As per the new policy of the Ethiopian government to mitigate the manpower shortage in this
field of study, the department aspires to produce qualified citizens who are going to participate
in research and development, teaching and consultancy service that the economy demands and
thereby contribute towards the fulfillment of the development policies and strategies of the
country. Therefore, its plan is to educate and train students in this field of specialization.
The current programme is found by the staff chiefly to address lack of courses that acquaint
students with the needs of employing industries and specific knowledge that enable students to
be more competitive in the labour market. This need is addressed by introducing elective
courses in four concentration areas with minor adjustments in credits of other courses.
Vision & Mission of the Department

 Vision
Vision of the department is to be one of the top departments in Africa by 2025 and be exemplary
through the provision of quality education in subject areas of economics, undertaking research
& consultancy service.
 Mission
The mission of the department is enhancing the intellectual and economic strength of our
country through our academic program, research and community outreach activities.
Rationale
There are fundamental facts that each society faces, i.e., resources are scarce and human wants
are unlimited. This imbalance necessitates efficient allocation and utilization of the scarce
resources in ways that maximize the benefit of the society. This requires understanding of three
issues, i.e., How individuals make decision? How people interact? And how the whole
economy works? Economics deals with the three issues. Alternatively, Economics is the science
concerned with how society best allocates and utilizes its scarce resources to maximize its
benefit. It is plain fact that given the scarce resources to satisfy societal want, nations need to
know how to efficiently allocate and utilize their scarce resources and Economists can help in
this regard.
Several great issues that confront us today-unemployment, inflation, environmental problems

and poverty- have economic roots. In order to diagnose and remedy these ailments, we must
first understand their complex nature. Economics helps us in this regard and it enables us
prescribe remedies. In general, it is of no doubt that the study of Economics can illuminate
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much about the world and that the lessons learned if properly applied can make the world a
better place to live.
Owing to these facts, the program in Economics will be of great significance in producing
citizens that try to better understand how the economy works and more importantly how to
affect the economy through economic policies in a way that the society desires.
Rationale for Curriculum Change
Education is one of the ingredients for change and quality education is vital for economic
prosperity of a country. More importantly, education has to be relevant and responsive to
societal or development needs of the country. Curriculum is the means/instrument by which
you produce the desired quality personnel and respond to societal/development needs.
Currently, the government is striving to keep the country on accelerated growth track
envisioning that Ethiopia joins the middle-income countries in about a decade. This vision
demands concerted efforts in all sectors and above all it requires an active and productive
human capital that can realize the vision.
The required active and productive human capital can be produced and molded through
quality education, among other factors. Though, the existing curriculum has contributed its
share in building the human capital of the nation thus far, it has certain limitations that
necessitates the change in curriculum so that the nation can successfully produce productive
human capital to realize its vision. There have been several changes in Economics science that
are worth introducing at an undergraduate level, hence updating the existing curriculum is
found necessary in order to produce an economics professional that understands economic
theories and their applications, undertake economics research in various sectors, stand the level
of rigor required at higher level of economics training, among others. The introduction of
freshman program is also one of the pressing issues to revise the existed curriculum and extend
the program life to 4 years.
With dynamic world, the discipline of Economics has been changing and with this changing
world, there should be a need for change in curriculum that can produce qualified experts that
could cope up with the country‟s demand. There have also been a lot of changes in the
discipline at undergraduate level making it worth changing the old curriculum to update with
these changes, including modularizing the old curriculum. This will foster the development
strategy of Ethiopia to reach the middle-income countries.
Therefore, the dynamic nature of the discipline and the ever-increasing demand of the country
to produce qualified experts that could foster the development of the nation demands change of
the curriculum. In addition, the view/response received from the staff teaching the various
subjects on the existing curriculum necessitated the changes and additions to update the current
curriculum.
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Objective
General Objectives of the program:
 The aim of the program is to produce high level professionals in Economics and high-
level qualified experts in different professions that will benefit the country‟s sustainable
economic development and foster growth and transformation process of Ethiopia to
reach the middle-income countries in the near future, through offering students a
comprehensive basis for professional and academic careers and further education in any
economics specializations, and thesis work. The program will equip students with a
solid knowledge of economic theory as applied to development issues, natural
resources, and other socio-economic issues concerning the developing countries in
particular and the globe in general.
Specific objectives of the program:
With these general objectives, the prime and specific focuses of the program is:
 to produce Economists (Economic thinkers) with basic skills that would help to teach
and do research in areas of economics.
 to better acquaint the students with solid understanding of microeconomic theories,
macroeconomic theories, and other economic issues for intelligent applications of
economics in a way that improve the quality, relevance and output of undergraduates in
economics in Ethiopia.
 to equip the students with the necessary methodologies in economics that enable them
explain the economic phenomenon, undertake economic analysis and design economic
policy.
 to highlight the different applications of economic theories in various sectors and expose
the students to the different sub-disciplines of economics [labour economics, agricultural
economics, industrial economics, environmental economics, financial economics, etc]
 produce graduates with a skill of planning, project preparation, monitoring and
evaluation.
 to enable the students, undertake theoretical and applied researches relevant to the
overall development strategy and vision of the country and address national problems
of socio-economic roots; and disseminate research findings through outreach program.
 to promote interdisciplinary collaboration among the various programs in training,
research and extension.
 to offer short term training courses and to provide consultancy service for different
organizations and community.
 to show students how economic science evolved, its present and future vision of the
field and make them up-to-date with the dynamism of the field.
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Professional Profiles
This refers to general description of the desirable qualities of the professional in the world of
work. Professional‟s profile is the determination of the conceptual knowledge, skills and the
tools a professional is expected to possess. It is the major roles and tasks of the professional and
the competencies that it requires for optimal functioning. It is the graduate profile that is
advanced through experience in the real world. It is known that economics professionals have
the necessary understanding of theoretical, analytical tool, and practical implementation of
economic issues that can be applied in various institutions (government, non-government,
private, and community related activities). Similarly, they do have knowledge and skills of
resource allocation, are of critical thinking on various socio-economic phenomenon. They do
also have firm mathematical and analytical skills, good knowledge and skill of computer use
and software applications.
Therefore, it is expected from an economist to

 Present and transfer economic knowledge to the target groups
 Develop and build economic Models
 Use empirical evidence to evaluate an economic argument
 Develop, design, appraise and monitor projects.
 Develop and promote attitudes that advance the nation‟s well-being in particular and
the globe in general.
 Be ethical, openly and objectively comments on economic policies, strategies and issues.
 Contribute to the economic policy formulation capability and broadly to the economic
advancement of the country;
 Conduct scientific Researches and assist in the dissemination of the findings of such
research in Ethiopia;
 Able to provide independent consultancy and advisory services for various agents.
 Initiate forum for the discussion of economic issues, and
 Create professional linkage with domestic and foreign economists.
Graduate profile
A graduate profile is derived from the professional profile and describes the competencies that
a graduate (beginning professional) is expected to have as a result of their educational
programs. It determines the program goals and the skills and knowledge needed for a
beginning professional. As a result, after completion of their study, the graduates will be able to
achieve the knowledge, skills and attitude discussed below.
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Graduate Profile
Areas of Graduate Profile
competence
Knowledge Generally
- Microeconomics theories and their applications
- Macroeconomic theories and their applications
- Mathematical techniques, theories and their application in
economics
- Economic applications in different sectors (financial, education,
infrastructure, environment, industry, money market, public policy,
agriculture, etc.)
- Statistical and econometric tools and applications
- Economic applications in developmental issues
- Economic applications in labor market and industrial sectors
- The evolution and development of economic ideas and thoughts
- International trade and finance
- Planning, project analysis and evaluation
Specifically
- Theories of consumer behavior, producer behavior and the market
- Theories of price and output determination by firms
- Functioning of different market setting, their structure and
organization
- Macroeconomic theories dealing with national income accounting,
unemployment, inflation and economic growth of nations, etc.
- Theories of renewable and non-renewable resources, public goods,
externalities and market failure and environmental valuation.
- Theories of international trade & finance.
- Theories of wage determination, issues of labor demand and supply
analysis
- Different economic policy instruments (such as monetary policy,
fiscal policy, income policy, trade policy, etc) used at an aggregate
level.
- Theories, strategies, approaches and country experiences of
agricultural and rural development.
- Theories of economic development and the problems of developing
countries and the different paths/way-outs from the problems or
challenges.
- Project designing, appraisal, economic planning, analysis,
monitoring and evaluation.
- Sectoral issues that cover social services as education, health,
transport, communication and electric power and infrastructural
developments as a whole.
- The link between the various economic and non-economic aspects.
Skills/tools
- Basic computer skills and software applications in economic
research and analysis
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- Research proposal developing skills and writing research reports
and professional articles
- Interviewing (conducting of survey) skill
- Critical socio-economic phenomenon observation and data analysis
skills
- Both quantitative and qualitative socio-economic research skills.
- How to use empirical evidence to evaluate an economic argument
- How to conduct appropriate statistical analysis of data, and explain
the statistical problems involved.
- Instruct in universities and higher training institutions.
Attitude - Have a rational attitude about private and/or public matters
- Easy to work with others (economists and other professionals)
- Ready to support state and communities
Emerging and - Governance
Cross Cutting - Community development
Issues - Gender, HIV/AIDS and disabilities
- Environment
- Experimental economics, etc
Communication  Ability to lead Focus Group Discussions
 Formal and informal communication skills
 An excellent rational oratorical skill
 Reporting skills
 Reasoning skills.
Management  A good management skill of private and public resources
 Time management
 A good ability to manage and suggest ideas and views (the various
arguments that arise because of the various socio-economic
complications,)
Admission Requirement
The department is a program of study that normally takes four years (including freshman
program) to complete for full time regular students and five to six years for part time students.
The department will admit if the student:
o has successfully completed preparatory level schools and passed entrance examination
for the University prepared by Ministry of Education.
o Has successfully completed freshman program and assigned to the department on a
regular program base by the University
o is able to pass the standards set by the department
Duration of the program
The program will have Four-year duration (including freshman program)
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Graduation requirement
o No „F‟, „NG‟, or „I‟ grade in any course taken.
o The minimum number of credit points (EtCTS- Ethiopian Credit Transfer System) hours
set by the department and all required courses are taken.
o Minimum Cumulative Grade Average Point (CGPA) of 2.00 in all courses
Degree Nomenclature
Up on successful completion of the program, the graduates will be awarded a degree with the
following nomenclature:
In English: “Bachelor of Arts degree in Economics”

In Amharic: “ የአርት ባችለር ዲግሪ በኢኮኖሚክስ”
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List of Modules/Courses
a. Major Compulsory
Course title Course code Cr.hr EtCTS Prerequisite

1 Calculus for Economists Econ 2011 3 5
2 Microeconomics I Econ 2021 3 5
3 Macroeconomics I Econ 2031 3 5
4 Introduction to statistics Econ 2041 3 5
5 Linear Algebra for Economists Econ 2012 3 5
6 Microeconomics II Econ 2022 3 5 Econ2021
7 Macroeconomics II Econ 2032 3 5 Econ2031
8 Statistics for Economists Econ 2042 3 5 Econ2041
9 Mathematical Economics Econ 3051 3 5 Econ2012
10 Labour Economics Econ 3101 2 3 Econ2022
11 Econometrics I Econ 3061 3 5 Econ 2042
12 Development Economics I Econ 3071 3 5 Econ-2022 and Econ-2032
13 International Economics I Econ 3081 3 5 Econ2022 and Econ 2032

14 Financial Economics Econ-3091 3 5
Econometrics II Econ 3062 3 5 Econ3061
15
Research method for economists Econ 3063 2 3 Econ 3061
16 Development Economics II Econ 3072 3 5 Econ3071
17 International Economics II Econ 3082 3 5 Econ3081
18 Natural Resource & Environmental Economics Econ 3092 3 5 Econ2022
19 Economics of Industry Econ 3102 3 5 Econ2022
20 Practical Attachment Econ 3112 2 3
21 Economics of Agriculture Econ 4111 3 5 Econ2022
Econ 2022
22 Monetary Economics Econ 4121 3 5
Econ2032
23 Development Planning & Project Analysis I Econ 4131 3 5 Econ3072
12
24 History of Economic Thought I Econ 4141 3 5
25 Thesis in Economics I Econ 4151 2 3 Econ2063
26 Introduction to Institutional and Behavioural Economics Econ 4161 3 5
27 Statistical Software Application in Economics Econ 4171 2 3 Econ -3061 and Econ 3062
28 Rural Development Econ 4112 3 5 Econ4111
29 Public finance Econ 4122 3 5 Econ 4121
30 Development Planning & Project Analysis II Econ 4132 3 5 Econ4131
31 History of Economic Thought II Econ 4142 3 5 Econ4141
32 Thesis in Economics II Econ 4152 3 5 Econ4151
33 Urban and Regional Economics Econ 4162 3 5
Total 97 160
Note: * indicate that the course requires 8-hours additional field visit/industry visit per semester.
** indicates that the course requires 16-hours lab-practice per semester (or 1-hour per week).
b. Supportive

1 Fundamentals of Accounting I Acct-2201 3 5
2 Basic Computer Skill of Microsoft Applications CoSc-2201 3 5
3 Fundamentals of Accounting II Acct2202 3 5 AcctM2201
4 Introduction to Management MGMT-2061 2 3
11 18
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c. Freshman Program (General Education)
# Course Title Course Code Cr.hr ECTS Prerequisite

1. Communicative English Language Skill English I FLEn 1011 3 5
2. Economics Econ 1011 3 5
3. General Psychology PsyL 1011 3 5
4. Mathematics for Social Sciences Math 1011 3 5
5. Critical Thinking LoCT 1011 3 5
6. Physical Fitness SpSc 1011 - 2 P/F
7. Geography of Ethiopia and the horn GeES 1011 3 5
1. Communicative English Language Skill II FLEn 1012 3 5
2. Social Anthropology Anth1012 2 3
3. Entrepreneurship Mgmt 1012 3 5
4. Inclusiveness SNIE 1012 2 3
5. Intro. To emerging technologies EmTe 1012 3 5
6. Moral and Ethical Education MCiE 1012 2 3
7. Global Trend GlTr 1021 2 3
Basic Writing Skill EnLa 2012 3 5
Total 35 64
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Regular Program: Economics program, course breakdown by year and semester for Four years
Year I, semester I
# Course Title Course Code Cr.hr ECTS Prerequisite Remark

6. Physical Fitness SpSc 1011 - 2 contact Hrs. P/F
Total 18 32
Year I, Semester II

7. Global Trends GlTr 1021 2 3
Total 17 26
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Year II, semester I
1 Calculus for Economists Econ 2011 3 5
2 Microeconomics I Econ 2021 3 5
3 Macroeconomics I Econ 2031 3 5
4 Introduction to statistics Econ 2041 3 5
5 Fundamentals of Accounting I Acct-2201 3 5
6 Basic Computer Skill of Microsoft Applications CoSc-2201 3 5
18 30
Year II, semester II

3 Linear Algebra for Economists Econ 2012 3 5
2 Microeconomics II Econ 2022 3 5 Econ2021
3 Macroeconomics II Econ 2032 3 5 Econ2031
4 Statistics for Economists Econ 2042 3 5 Econ2041
5 Fundamentals of Accounting II Acct2202 3 5 AcctM2201
6 Basic Writing Skill EnLa 2012 3 5
18 30
16
Year III, semester I
1 Mathematical Economics Econ 3051 3 5 Econ2012
2 Labour Economics Econ 3101 2 3 Econ2022
3 Econometrics I Econ 3061 3 5 Econ 2042
Econ-2022
4 Development Economics I Econ 3071 3 5 Econ-2032
Econ2022
5 International Economics I Econ 3081 3 5 Econ 2032
6 Financial Economics Econ-3091 3 5
7 Introduction to Management MGMT-2061 2 3
19 31
Year III, semester II

Course title Course code Cr EtCTS Prerequisite
1 Econometrics II Econ 3062 3 5 Econ3061
2 Research method for economists Econ 3063 2 3 Econ 3061
3 Development Economics II Econ 3072 3 5 Econ3071
4 International Economics II Econ 3082 3 5 Econ3081
5 Natural Resource & Environmental Economics Econ 3092 3 5 Econ2022
6 Economics of Industry Econ 3102 3 5 Econ2022
7 Practical Attachment Econ 3112 2 3
19 31
17
Year IV, semester I
1 Economics of Agriculture Econ 4111 3 5 Econ2022
Econ 2022
2 Monetary Economics Econ 4121 3 5
Econ2032
3 Development Planning & Project Analysis I Econ 4131 3 5 Econ3072
4 History of Economic Thought I Econ 4141 3 5
5 Thesis in Economics I Econ 4151 2 3 Econ2063
6 Introduction to Institutional and Behavioural Economics Econ 4161 3 5
Econ -3061 and
7 Statistical Software Application in Economics Econ 4171 2 3
Econ 3062
19 31
Year IV, semester II
Course title Course code Cr.hr ECTS Prerequisite

1 Rural Development Econ 4112 3 5 Econ4111
2 Public finance Econ 4122 3 5 Econ 4121
3 Development Planning & Project Analysis II Econ 4132 3 5 Econ4131
4 History of Economic Thought II Econ 4142 3 5 Econ4141
5 Thesis in Economics II Econ 4152 3 5 Econ4151
6 Urban and Regional Economics Econ 4162 3 5
18 30
18
Extension Program: Economics program, course breakdown by year and semester for Five years
Year I, semester I
6. Physical Fitness SpSc 1011 - 2 contact Hrs. Not provided for
extension program
Total 12 22
Year I, Semester II

Total 11 18
Year I, Summer

Total 7 11
19
Year II, semester I
2. Global Trend GlTr 1021 2 3
3. Calculus for Economists Econ 2011 3 5
4. Microeconomics I Econ 2021 3 5
11 18
Year II, semester II

1. Macroeconomics I Econ 2031 3 5
2. Introduction to statistics Econ 2041 3 5
3. Fundamentals of Accounting I Acct-2201 3 5
Basic Computer Skill of
4. CoSc-2201 3 5
Microsoft Applications
12 20
Year II, Summer

Linear Algebra for
1. Econ 2012 3 5
Economists
2. Microeconomics II Econ 2022 3 5 Econ2021
6 10
Year III, semester I
20
1. Macroeconomics II Econ 2032 3 5 Econ2031
2. Statistics for Economists Econ 2042 3 5 Econ2041
3. Fundamentals of Accounting II Acct2202 3 5 AcctM2201
4. Basic Writing Skill EnLa 2012 3 5
12 20
Year III, semester II

1. Mathematical Economics Econ 3051 3 5 Econ2012
2. Econometrics I Econ 3061 3 5 Econ 2042
Econ-2022
3. Development Economics I Econ 3071 3 5 Econ-2032
Econ2022
4. International Economics I Econ 3081 3 5 Econ 2032
12 20
Year III, Summer

1. Labour Economics Econ 3101 2 3 Econ2022
2. Financial Economics Econ-3091 3 5
3. Introduction to Management MGMT-2061 2 3
7 11
Year IV, semester I
21
1. Econometrics II Econ 3062 3 5 Econ3061
2. Research method for economists Econ 3063 2 3 Econ 3061
3. Development Economics II Econ 3072 3 5 Econ3071
4. International Economics II Econ 3082 3 5 Econ3081
11 18
Year IV, Semester II

Natural Resource & Environmental
1. Econ 3092 3 5 Econ2022
Economics
2. Economics of Industry Econ 3102 3 5 Econ2022
3. Practical Attachment Econ 3112 2 3
4. Economics of Agriculture Econ 4111 3 5 Econ2022
11 18
Year IV, Summer

Econ 2022
1. Monetary Economics Econ 4121 3 5
Econ2032
2. Development Planning & Project Analysis I Econ 4131 3 5 Econ3072
6 10
Year V, Semester I
22
1. History of Economic Thought I Econ 4141 3 5
2. Thesis in Economics I Econ 4151 2 3 Econ2063
Introduction to Institutional and Behavioural
3. Econ 4161 3 5
Economics
4. Statistical Software Application in Economics Econ 4171 2 3 Econ -3061 and Econ 3062
5. Rural Development Econ 4112 3 5 Econ4111
13 21
Year IV, semester II
Course title Course code Cr.hr ECTS Prerequisite

1. Public finance Econ 4122 3 5 Econ 4121
2. Development Planning & Project Analysis II Econ 4132 3 5 Econ4131
3. History of Economic Thought II Econ 4142 3 5 Econ4141
4. Thesis in Economics II Econ 4152 3 5 Econ4151
5. Urban and Regional Economics Econ 4162 3 5
15 25
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Teaching Methodology
The nationally agreed delivery method is semester based and one Course for a maximum of
two consecutive semesters.
Method of Teaching
The method of teaching shall be student-centered. Students are highly expected to participate in
class works at the middle and end of each session and in group discussions inside and outside
of the class. Specifically, the course will be delivered through the following methods:
 Lecture Method
 In-class problem solving
 Group Work
 Assignment
Medium of Instruction
Medium of instruction of delivering the courses of the program is English.
Required facilities
The department faces shortages, including chairs, computer lab, tables, shelves, cabinets, books
both texts and references, econometrics and statistics software, computers (both laptop and
desktop) improved access to the internet including Wi-Fi.
Assessment
Students will be assessed continuously. That means there will be about 2 formal quizzes, home
take assignments and one summative exam. The quizzes and assignments will be counted out
of 50% and the remaining 50% will be for the summative exam.
Grading System
The grading system is based on the European credit transfer system (ECTS) that is
contextualized to Ethiopia. One EtCTS is equivalent to 27 study hours taking the assumption
that a student has 50 working hours per week (10 hours per day is multiplied by 5 working
days). EtCTS is based on the principle that 60 credits points measure the workload of a full-time
student during one academic year and average semester load of 30 EtCTS (Hence, in a three-
year Bachelor Degree program a student must take a minimum of 180 EtCTS). The grading
system will be criteria-based fixed scale system as shown below:
Raw mark Corresponding fixed Corresponding letter

Interval (100%) number grades grade
[90,100] 4.0 A+
[83,90) 4.0 A
[80,83) 3.75 A-
[75,80) 3.5 B+
[68,75) 3.0 B
[65,68) 2.75 B-
[60,65) 2.5 C+
[50,60) 2.0 C
[45,50) 1.75 C-
[40,45) 1.0 D
[0,40) 0.0 F
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Description of the Grading System
1. A student who scored „C-„ and/or “D” in a course/s can pass to the next semester if he
or she has pass mark in Cumulative Average Number Grade (CANG).
2. If the „C-„ and/or “D” grade is for a Course or for a course as a module, he/she must
re-sit for another exam with self-study to remove „C-„ and/or “D” when Course status
determination is required.
3. A student with a good stand can pass to the next semester and even can graduate if
he/she scores “D” and or “C-” in any course under module. Nevertheless, if the student
is not in good standing, he or she should re-sit an exam within two weeks after the
beginning of the semester with self-study.
4. A student who scored “F” in a course/Course must repeat the course/Course for a
maximum of two-times. After that, if s/he repeats F grade, the student can request for
course change/replacement or waiver as course allergic.
5. The final grade of any repeated course shall be maintained regardless of the initial one.
Quality Assurance
In order to guarantee the quality and standard of the training, the following factors will be
taken in to account:
 Students entry requirement
 Quality and commitment of academic staff
 Availability of teaching facilities
 Student involvement in both theoretical and practical activities
 Effectiveness and efficiency of the management
 Good planning, monitoring, and evaluation of activities and academic programs
 Examinations and various assessment methods of the training program
 Feedback from employers and graduates conducting tracer studies.
 Evaluation of the instructors by the staff and by the students to improve the teaching-
learning process
 Refining and revising its curriculum in light of recent developments in the field and
immediate demands for the profession
 Checking the quality of the program by conducting systematic graduate survey
preferably as part of an alumni management scheme for broader networking
Facilities:
 List of laboratories, workshops, Libraries, rooms and their capacity
Computer lab for undergraduate Program 1

Computer lab for the post graduate program 1
Documentation center for final year undergraduate 1
and for all graduate students
Course descriptions:
 The word “Econ” indicates the name of the department “Economics”
 The first number represents the Year that students take the course
 The middle digit number indicate the order/sequence number of the course
 The last number represents the sequence of the course.
25
Course Title: Calculus for Economists
Course Code: Econ 2011
Course Description:
This course is prepared to develop the topics of differential and integral calculus. More
emphasis is placed on limits, continuity, derivatives and integrals of algebraic and
transcendental functions of one variable. It is also intended to develop practical skills in
differential and integral calculus. As well, it is intended to illustrate various applications
of calculus to technical problems.
Learning Outcomes:
Upon successful completion of this course, the student will have reliably demonstrated
 The ability to differentiate any algebraic or transcendental function,
 Apply differentiation to determine roots of equations to determine maxima and
minima of functions and
 Determine power series, integrate any algebraic function,
 Apply integration to determine volumes, areas, and averages.
 Finally, they are able to apply calculus to economics.
1. Revision of Function and Limit Reading Materials

1.1 Types of Functions and Application in  A.Chiang: chapter 1(p3-
Economics 5, 145-147)
Multivariable Functions,  Larson: chapter P&
Inverse and Implicit Functions, chapter1(p1-83)
Exponential and Logarithmic functions  Knut : chapter 5(p117-
Monotonic and Homogeneous Functions 122, 129-132)
4 hours 1.2 Limit and Application in Economics  Kapoor, sec. 3.2-3.15
The Concept of Limit,  Laurance (etal),P.1-57;
The Limit Theorems,  Barnett, P.1-98
Continuous Functions and criteria for continuity  Laurence et al, P.57-88;
Economic Applications of limit and continuity  Barnett et al, P.485-519;
 Chiang, P.145-154
 Kapoor, sec. 4.2-4.14
2. The Derivatives Reading Materials

2.1 The Concept Derivatives and geometric  Larson: chapter 2(p95-141)
Interpretation of Derivatives: slope of a curve  Knut: chapter 5(p117- 156)
2.2 Continuity and Differentiability of a Function  Chiang: chapter (p187-
2.3 Rules of Differentiation 204)
14 hours  Kapoor, sec. 5.1-5.30
2.4 Derivatives of Logarithmic and Exponential
Functions  Dowling, E., P 43
2.5 Higher Order Derivatives  Laurence et al, P.96-157;
2.6 The sign of the Derivative
2.7 Maximization and Minimization
26
3. Univariate Calculus and Multivariate Calculus  Chiang (1984) chapters
3.1 Univariate Calculus 7,8,9,10,11
Increasing and decreasing functions, Concavity  Dowling (1980) chapters
and convexity, Linear approximations, Polynomial 3,4,5,9
approximations , Estimation of functions
(Maclaurin and Taylor series) , Intermediate value
12 hours theorem, Newton method/
3.2 Multivariate Calculus: Homogeneous functions
and Euler's theorem, Total differentials and
implicit differentiation
3.3 Economic Application of Derivatives
3.4 The Marginal Concepts and Elasticities in
Economics
4. Integration Reading Materials:
4.1 The Concept of Integration Larson : chapter 4(p247-282)
4.2 Properties of Integration Knut: chapter8(p215-243)
4.3 Techniques of Integration (Integration by Chiang: chapter 13(p435-458)
18hours Substitution, by Part, by Partial Fraction) Kapoor, P 10.2 –10.34
Barnett et al, P.742-767, 789-
4.4 The Definite Integral (Properties of Definite
791, 835-849
Integral and Integral and area under the curve)
Laurence et P.356-425
4.5 Economic Applications of Integrals
Course Delivery Methods

The delivery method shall be student-centered. Students are highly expected to participate in
of the class. Specifically the course will be delivered through the following methods:
 Lecture Method
 Group Work
 Assignment
Assessment Methods
Student evaluation in this Courseconsist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.
Assessment Method Weight

Assignment(Indiv/group) 20%
Quizzes/Tests (Max of 10% each) 30%
Final Exam 50%
Total 100%
Course Policy
 Late coming is not allowed and no student is allowed to enter after class has started.
 Duplication of assignments is strictly forbidden; it entails serious penalty.
27
 Assignments are required to be submitted before or on the deadline.
 Cheating during exam sessions results in a minimum of “F “grade while cheating in
quizzes and tests is subjected to a zero mark. All cheating cases will be reported to
the department for further considerations.
 Students should switch off their cell phones while they are in class and must keep
their cell phones switched off during all kinds of exam sessions.
 students must attend 80% of the class for the course. Failure to attend 80% of the class
will not allow the student to sit for the final exam.
 Missing a quiz without convincing evidences will earn the students a grade of zero
marks in that specific quiz.
Text Books:
 Barnet R.A. and M.R. Ziegler, (1994), Applied Mathematics for Business Economics, Life
Sciences and Social Sciences, 4th edition, MacMillan College Publishing Company.
 Laurence D. Hoffmann, Gerald L. Bradley and Kenneth H. Rosen, Applied Mathematics
for Business Economics, Life Sciences and Social Sciences
 Chiang A.C, (1984), Fundamental Methods of Mathematical Economics, McGraw Hill,
Inc.
 Knut Sydsæter and Peter Hammond: Mathematics for Economics I and II. Ethiopian
Edition
 Knut Sydsæter and Peter Hammond: Essentials of Mathematics for Economics.
References:
 Allen R.G.D. ( 1963),Mathematical Economics , 2nd edition Macmillan , new York
 Allen R.G.D. (1962) , Mathematical Analysis for Economists ,Macmillan, London
 Yamane T. (1978), mathematics for Economists: An elementary ,Survey ,2nd edition,
prentice -Hall
 Dowling E.J.T., (1980) , Mathematics for Economists , Schaum‟s outline series,McGraw-
Hill, Inc.
 Any other intermediate textbooks on “ Calculus and Microeconomic theory “ can largely
serve the purpose
28
Course Title: Linear Algebra for Economists
Course Description:
Linear algebra is a branch of mathematics that studies systems of linear equations and
the properties of matrices. Therefore, this course covers matrix, linear algebra, input and
output linear programming. Due to its broad range of applications, linear algebra is one
of the most widely taught subjects applied in economics for allocating resources to the
desirable level. So, the overriding objective of the course is to give the students a clear
understanding of some important topics in linear algebra. Students will acquire an
understanding of systems of simultaneous linear equations.
Learning Outcomes:
Up on the completion of this course, students should be able to demonstrate
 An understanding of symbolic logic, basic properties of number systems, vectors and
matrices
 The applications of linear Algebra to certain sorts of problems in solving systems of
simultaneous equations and long-term behavior of coupled recurrence relations and
 Understand formal mathematical definitions and theorems and apply them to solve
problems in linear algebra.
Chapter1.Matrix Algebra Reading Materials:

1.1 Introduction  Chiang[1984] PP 54-102
1.2 Matrix Operations  Dowling[1980] PP 244-281,
1.3 Special Matrices 287-289
10 hours 1.4 Determinants  Yamane[2002] PP 348-557
1.5 Matrix Inversion  Bhardwaj[2005] PP 2.1-2.40
1.6 Partitioned Matrices  Sydsaeter, ch 14, pp. 389-416
1.7 Rank of a Matrix and Linear Independence /Vectors
and Space, Powers and Trace of a Square Matrix
Chapter2. Systems of Linear Equations Reading Materials
2.1 Matrix Representation of Linear Equations Chiang[1984)] PP 103-123
2.2 Solving Systems of Linear Equations (Gaussian Bhardwaj[2005] PP 2.41-2.74
12 hours Elimination, Gauss-Jordan Method, Inverse Method Sydsaeter, ch14, pp. ch.15
and Cramer‟s Rule)
2.3 Homogeneous Systems of Linear Equations
2.4 Economic Applications
Chapter3.SpecialDeterminants&Matrices in Economics Reading Materials:
3.1 Introduction Sydsaeter, Chapter 2 (27-40)
3.2 The Jacobean Determinant Dowling [2001] PP 262-283
10 hours
3.3 The Hessian Determinant
3.4 Eigen vectors and Eigen values
3.5 Quadratic Forms
29
Chapter4: Input-Output Analysis and Linear Reading Materials:
Programming Bhardwaj[2005] sec 2.74-2.87,
4.1 Input-Output Model (Leontief Model) and 10.1-10.42
4.1.1 Introduction Chiang[1984] PP 121-130, and
4.1.2 Assumptions of Input Output Models PP 651-709
4.1.3 The Open Model Dowlig (1980) PP 286-287, 317
4.1.4 The Closed Model 350
16 hours
4.2 Linear Programming Kapoor (2002) PP 2.1-2.74, PP
4.2.1 Introduction 12.1-13.40
4.2.2 Formulating Linear Programming
Problems
4.2.3 Solving Linear Programming Problems /
The Graphic Method, The Simplex
Method and The Duality Theorem

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50%
Total 100%
Course Policy
 Late coming is not allowed and no student is allowed to enter after class has started.
 Duplication of assignments is strictly forbidden; it entails serious penalty.
 Cheating during exam sessions results in a minimum of “F “grade while cheating in
quizzes and tests is subjected to a zero mark. All cheating cases will be reported to
the department for further considerations.
 Students should switch off their cell phones while they are in class and must keep
their cell phones switched off during all kinds of exam sessions.
 students must attend 80% of the class for the course. Failure to attend 80% of the class
will not allow the student to sit for the final exam.
 Missing a quiz without convincing evidences will earn the students a grade of zero
marks in that specific quiz.
30
REFERENCES
1. Chiang, Alpha C.(1984),Fundamental Methods of Mathematical Economics, McGraw-Hill, Inc
2. Bhardwaj, R. S.(2005)Mathematics for Economics and Business, Excel Books.
3. Knut sydæster and Peter Hammond: Mathematics Essentials for Economic analysis
Ethiopian Edition
5. Knut sydæster and Peter Hammond: Further Mathematics for Economists.
Ethiopian Edition
6. Yamane, T. (2002),Mathematics for Economists: An Elementary Survey, 2nd ed., Prentice
Hall.
6. Dowling, E.T., (1980),Mathematics for Economists (Schaum's Outline Series), Mc Graw-Hill
7. Kapoor,V. k. (2002),Introductory Mathematics for Business and Economics, Sultan & Sons
:NewDelhi
8. .Monga, G.S. (1972), Mathematics and Statistics for Economics, Vikas Publishing House.
9. Bowen, E.K. ,etal., (1987), Mathematics with Applications in Management and Economics,
6th ed., Irwin Inc.
31
Course Name: Microeconomics
Course Category: Core
Course Code: Econ-2021
Course Competency:
Enables the student to make economic analysis & interpretation from
firms & households‟ perspective
Course Description
The Course contains two courses; Micro economics I and Micro economics II. These courses
cover theories of consumer behaviour, producer behaviour and theories of market structure,
perfect competition, monopoly, monopolistic competition and oligopoly), choice under
uncertainty, game theory), factor market pricing, general equilibrium analysis and asymmetric
information. It begins presenting the assumptions underlying each theory; it proceeds on
analysing the behaviour of economic unit (the consumer or producer) in an attempt to meet its
objective and finding the equilibrium of these economic units.
Course Objective
 To introduce students to the fundamental concept of individual decision-making units
such as consumers, business firms and resource owners and income distribution
 Acquaint the students with the neoclassical theory of consumer behaviour, how each
consumer makes decision to maximize her/his utility.
 Provide the students with detailed theories of production and cost, how firms
organize their production process, how firms decide to minimize costs.
 Offer a deeper understanding of the different market structures and how firms
behave under perfectly competitive, pure monopoly, monopolistically competitive and
oligopoly markets.
 Give students an overview discussion of general equilibrium analysis and asymmetric
information.
32
Course Name: – Microeconomics-I
Course
Lecture Topic of the lecture Reference
(hours) Materials
Chapter one: Theory of Consumer Behaviour and demand
1. Consumer Preferences and Choices o A.Koutsoyiann
1.1. Consumer Preference is, PP 13-60.
1.2. Utility o H.S. Agrawal,
2. Approaches to measure Utility PP 97-260.
2.1. The Cardinal Utility approach
2.1.1. Assumptions of Cardinal Utility theory
2.1.2. Total and Marginal Utility
2.1.3. Law of diminishing marginal Utility (LDMU)
2.1.4. Equilibrium of a consumer
2.1.5. Derivation of the Cardinalist Demand
2.2. The Ordinal Utility Approach
2.2.1. Assumptions of Ordinal Utility approach
2.2.2. Indifference Set, Curve and Map
2.2.3. Properties of Indifference Curves
2.2.4. The Marginal rate of substitution (MRS)
15 hours 2.2.5. Types of Indifference Curves
2.3. The Budget Line or the Price line
2.3.1. Factors Affecting the Budget Line
2.3.1.1. Effects of changes in income
2.3.1.2. Effects of Changes in Price
2.4. Optimum of the Consumer
2.4.1. Effects of Changes in Income and Prices on
Consumer optimum
2.4.1.1. Changes In Income: Income Consumption
Curve and the Engel Curve
2.4.1.2. Changes in Price: Price Consumption
Curve (PCC)
2.4.2. Decomposition of Income and Substitution
Effects(normal, inferior or giffen goods )
2.4.3. Derivation of market demand curve
2.5. Elasticity of demand
Chapter Two: Choice –involving risk and uncertainty
2.1. Introduction -Hal R. Varian
2.2. Expected utility -R.S. Pindyck and
4.5 hours 2.3. Risk aversion D.L. Rubinfeld
2.4. Diversification
2.5. Risk spreading
Chapter three: The Theory of Production
33
3.1 Production function o A.Koutsoyiann
8 hours 3.2. Laws of production is, PP 67-92
3.2.1. The law of variable proportions o H.S. Agrawal ,
3.2.2. Laws of returns to scale PP 279-292
3.3. Choice of optimal combination
of factors of production
Chapter Four: Theory of Costs
4.1. Short-Run Costs o A.Koutsoyiann
4.2. Long-Run Costs is, PP 105-120
4.3.Derivation of Cost Functions from o H.S. Agrawal ,
5 hours
Production functions PP 359-368
4.4. Dynamic Changes in Costs- the Learning Curve
Chapter Five: Perfect Competition Market
5.1 The Short-Run Equilibrium of the Firm and o A.Koutsoyiann

industry is, PP 154-163
5.2. Market Equilibrium
7.5 hours
5.3. The Long-Run Equilibrium of the Firm
and industry
Chapter Six: Pure Monopoly Market

1.1. Characteristics and source of monopoly
o A.Koutsoyiann
1.2. Short Run and Long-Run Equilibrium
is, PP 171-189
1.3. price discrimination
o H.S. Agrawal ,
1.4. Multi-Plant Monopolist
8 hours PP 470-477
1.5. Social Cost of Monopoly Power
R.S. Pindyck and
D.L. Rubinfeld, PP
351-356

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
34
Final Exam 50%
Total 100%
Course Policy
 Late coming is not allowed and no student is allowed to enter after class has started.
 Duplication of assignments is strictly forbidden; it entails serious penalty.
 Assignments are required to be submitted before or on the deadline.
 Cheating during exam sessions results in a minimum of “F “grade while cheating in quizzes
and tests is subjected to a zero mark. All cheating cases will be reported to the department
for further considerations.
 Students should switch off their cell phones while they are in class and must keep their cell
phones switched off during all kinds of exam sessions.
 students must attend 80% of the class for the course. Failure to attend 80% of the class will
not allow the student to sit for the final exam.
 Missing a quiz without convincing evidences will earn the students a grade of zero marks in
that specific quiz
REFRENCES
1. A. Koutsoyiannis, Modern Microeconomics
2. H.S. Agrawal, Principles of Economics, 7th edition.
3. Hal R. Varian, Intermediate Microeconomics: A Modern Approach, Forth Edition
4. C. Ferguson, Microeconomic Theory
5. R.S Pindyck and D.L.Rubinifeld, Microeconomics
6. E. Mansfield, Microeconomics: Theory and Applications
7. Robert H. Frank, Microeconomics and Behavior
* Any other Intermediate Microeconomics text book can also be used as a supplementary
reading material.
35
Course Name: Microeconomics II
Lecture
Topic of the Lecture Reference Materials
(hours)
Chapter One: Monopolistic Competition
1.1. Assumptions o Koutsoyannis: pp 202

1.2. Product Differentiation, the demand curve – 209
and cost of the firm o Dwivedi: PP 378 – 388
1.3. The Concept of Industry and product o Pindyck: PP 421 – 425
6 hours „group‟
1.4. Short-run and long-run equilibrium of the
firm
1.5. Excess capacity and welfare loss
Chapter Two: Oligopoly
2.1. Non Collusive Oligopoly o Koutsoyannis: pp 216

2.1.1. Cournot‟s Duopoly Model – 251
2.1.2. The Kinked Demand Model o Dwivedi: PP 395 – 418
2.1.3. Bertrand‟s Duopoly Model o Pindyck: PP 428 – 453
2.1.4.Stackelberg‟s Duopoly Model
2.2. Collusive Oligopoly
12 hours 2.2.1. Cartels
2.2.1.1. Cartels Aiming at Joint Profit
Maximization
2.2.1.2. Market Sharing Cartel
2.2.2. Price Leadership
2.2.2.1. The Low Cost Price Leader
2.2.2.2. The Dominant Firm
Chapter Three: Game Theory
3.1. Dominant Strategy Equilibrium o Koutsoyannis: pp 405

3.2. Nash Equilibrium – 415
3.3. Mixed Strategy Equilibrium o Pindyck: PP 458 – 470
6 hours 3.4. Prisoner‟s Dilemma o Varian: PP 259-280
3.5. Repeated Games and Enforcing A Cartel
3.6. Sequential Game
3.7. Game of Entry Deterrence
Chapter Four: Pricing of Factors of Production and Income Distribution
4.1. Factor pricing in a perfectly competitive o Koutsoyannis: pp 438 -

15 hours market 451
36
4.1.1. The demand for factors of production o Dwivedi: PP 435– 452
4.1.1.1. The demand for one variable o Pindyck: PP 488 – 506
productive factors
4.1.1.2. The demand for several variable
inputs
4.1.1.3. Market demand for a factor
4.1.2. Factor supply and factor prices
4.1.2.1. The supply of labour by an
individual worker
4.1.2.2. The market supply of labour
4.1.2.3. Factor pricing
4.2. Factor pricing in imperfectly competitive o Koutsoyannis: pp 451
markets - 480
4.2.1. Monopolistic power in product market o Dwivedi: PP 458 – 475
4.2.1.1. Demand of the firm for a single o Pindyck: PP 509 – 518
variable input
4.2.1.2. Demand of the firm for two or more
variable inputs
4.2.1.3. Market demand and supply of
factors
4.2.2. Monopolistic power in the factor market
(monopsony)
4.2.2.1. A monopolist using a single variable
factor
4.2.2.2. A monopolist using two or more
variable inputs
4.2.3. Bilateral monopoly
4.3. Elasticity of factor substitution, technological
progress and income distribution
Chapter Five: General Equilibrium and Welfare Economics

5.1. Partial and General Equilibrium Analysis o Koutsoyannis: pp 495 -
5.2. General Equilibrium in a Pure Exchange 506
Economy o Dwivedi: PP 557 – 561
6 hours 5.3. General Equilibrium in Production o Pindyck: PP 562 – 568,
5.4.Simultaneous Equilibrium of Production and 573 – 580
Consumption
5.5 Welfare Economics: Criterions
Chapter Six: Introduction to Asymmetric Information

6. Asymmetric Information o Pindyck: PP 591 – 615
6.1. Adverse Selection
3 hours
6.2. Moral Hazard
6.3. Signalling and Screening
37
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50%
Total 100%
Course Policy
that specific quiz
REFERENCES
1. A. Koutsoyiannis, Modern Microeconomics
2. D.N .Dwivedi, 1997, Micro Economic Theory, 3rd Ed., Vikas Publishing
3. R.S. Pindyck & D.L. Rubinfeld, Microeconomics.
4. Hal R. Varian, Intermediate Microeconomics: A Modern Approach, 6th Ed.
5. C.L.Cole, Micro Economics: A Contemporary Approach.
6. Ferguson & Gould‟s, 1989, Microeconomic Theory, 6th Ed.
7. R.R. Barthwal, Microeconomic Analysis.
8. E. Mansfield, Microeconomics: Theory and Applications.
9. D.S. Watson, Price Theory & Its Uses.
*Any other Intermediate Microeconomics book can also be used as a supplementary reading
material.
38
Course Title: Macroeconomics I
Credit Hours: 3
ECTS 5
Course Description: The course, in its two parts, tries to introduce students with the analysis of
economic activity at macro level. By introducing National Income Accounts and the workings of
modern Financial Institutions and Monetary System the course proceeds on a detailed
treatment of aggregate economic variables such as Saving, Investment, Money, Inflation,
Income determination, Unemployment and others using various economic models as tools of
analysis. It also familiarizes students with relevant macroeconomic policy issues.
Course Objectives: After completing the course, students will be able to

 Describe the concept of National Income Accounting.
 Explain the controversies in macroeconomics.
 Explain basic IS-LM model
 Use macroeconomic policy instruments
CHAPTER ONE : The STATE OF MACROECONOMICS - INTRODUCION
1.1 What macroeconomics is about?

1.2 Basic Concepts and Methods of
Macroeconomics
Analysis
1.3 Macroeconomic Goals and
4 hours Instruments
1.4 The State of Macroeconomics: Evolution and
Recent Developments
1.4.1. Classical macroeconomics
1.4.2. Keynesian macroeconomics
1.4.3. Neo-classical macroeconomics
CHAPTER TWO: NATIONAL INCOME ACOUNTING
2.1 The concepts of GDP and GNP
2.2 Approaches of measuring national income
(GDP/GNP)
2.3 Other Social Accounts (GNP, NNP, NI, PI
and DI)
10 hours 2.4 Nominal versus Real GDP
2.5 The GDP Deflator and the Consumer Price
Index
2.6 GDP and Welfare
2.7 The Business Cycle
2.8 Unemployment and Inflation
39
CHAPTER THREE : AGGREGATE DEMAND IN THE CLOSED ECONOMY
3.1. Foundations of Theory of Aggregate Demand
3.2. The Goods Market and the IS curve
14 hours 3.3. The Money market and the LM curve
3.4. The Short Run Equilibrium
3.5 From the IS-LM to Aggregate demand
CHAPTER FOUR: AGGEGATE DEMAND IN AN OPEN ECONOMY

4.1. International flows of Capital Goods
4.2. Saving and Investment in the Small Open Economy
4.3. Exchange rates
4.4. The Mundell-Fleming model
4.5. fiscal and monetary policies in an open economy
12 hours
with perfect capital mobility
4.5.1. Fixed exchange rate
4.5.2. Floating exchange rate
4.6. Limitations of the Mundell-Fleming model
CHAPTER FIVE: AGGREGATE SUPPLY

5.1. Introduction
5.2. The Classical Approach to Aggregate Supply
5.3. The Keynesian approach to Aggregate Supply
5.3.1. The Sticky Price model
8 hours 5.3.2. The Sticky Wage Model
5.3.3. The worker- misperception model
5.3.4. Imperfect information Analysis

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.

Final Exam 50%
Total 100%
40
Course Policy
that specific quiz
Text Books
1. N. Gregory Mankiw, 2007, Macroeconomics 4th edition Worth Publishers USA
2. William H. Branson, 2006 Macroeconomic Theory and Policy
3. Dornbusch, R. and S. Fischer: Macroeconomics
REFERENCE:
4. Eduard Shapiro, 2007. Macroeconomic Analysis 5th edition New Delhi
5. Olivier Blanchard, 1997.Macroeconomics Prentice Hall Inc. New jersey USA
6. Frederick Mishkin, 1998. The Economics of Money, Banking and Financial Markets 5 th
edition USA.
7. Colander, 2001. Macreconomics 4th edition Newyork.
41
Course Title: `Macroeconomics II
Credit Hours: 3
Pre requisite: Econ 2031
Course Description: This course is a follow up to Macroeconomics I. In this course the objective
is to critically examine the macroeconomics issues discussed in Macroeconomics I and examine
their relevance to developing countries from a theoretical perspective. It will have two sections.
The first section outlines the „neoclassical synthesis‟ followed by Post Keynesian analysis of
aggregate demand. The second section of the course attempts to examine the theories discussed
so far in the context of developing countries. It will discuss issues in Structuralist
Macroeconomics, Methodological approach in Structural Macroeconomics and a closed
economy version of Structural Macroeconomics. The Theoretical underpinnings of Structural
Adjustment programs in Africa and Ethiopia will be examined from the perspective of all macro
theories. Elements of open economy macroeconomics will also be discussed.
Course Objective: After completing the course, students will be able to:
• Describe macroeconomics in comparison with microeconomics
• Discuss the different hypothesis of consumption demand
• Discuss the determinants of investment
• Analyze the demand for money in relation to money supply
• Explain the various model of growth and economic development
CHAPTER ONE: BEHAVIOURAL FOUNDAIONS: THEORIES OF CONSUMPTON

1.1 the Keynesian consumption Function
1.2 the early empirical successes
1.3 secular Stagnation, Simon Kuznets and the consumption puzzle
1.4 Irvin Fischer‟s Model
8 1.5 Modigiani‟s Life cycle Hypothesis model
hours 1.6 Friedman‟s permanent income Hypothesis
1.7 Hall‟s Random Walk model
Rational expectations
Adaptive expectations
Naïve expectations
CHAPTER TWO: THEORIES OF INVESTMENT
2.1 The concept of investment
2.2 types of investment
Business fixed investment
10 Inventory investment
hours Residential investment
2.3 Neoclassical Model
2.4 Keynesian Explanation
2.5 Tobin‟s-Q Model
42
2.6 Accelerator (Inventory Model)
CHAPTER THREE: MONEY DEMAND AND MONEY SUPPLY
6 3.1 Money supply and monetary expansion mechanism
hours 3.2 Money demand –portfolio and transaction theories
CHAPTER FOUR: THE LABOR MARKET
4.1 Two ways of analyzing the labour market
3.1 The macroeconomics of the labour market
4.2 Labour-market search and unemployment
5
4.3 Types and Causes of Unemployment
hours
4.4 Classical and Neoclassical Microeconomic model of the labour
market
4.5 New Keynesian view of the labour
CHAPTER FIVE : MACROECONOMIC POLICY DEBATES
5.1 Should Policy be Active or Passive?
5 5.2 Ignorance, Expectation and the Lucas Critique
hours 5.3 Should policies be conducted by Rule or by Discretion?
Rules for monetary policy
CHAPTER SIX: MODELS OF MACROECONOMIC GROWTH
6.1 Introduction: Modeling Economic Growth
6.2 Theories of Economic Growth
10-
6.1.1 The Harrod-Domar Growth Model
hours
6.1.2 The Neo-classical Growth model
Endogenous Growth Theory
CHAPTER SEVEN: MACROECONOMIC THEORIES AND
AFRICAN ECONOMIES
4 7.1 Basic Features of African Economies
hours 7.2 The Applicability of Conventional Theories to African Economies

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
43
Text Books
1. N. Gregory Mankiw, 2007, Macroeconomics 4th edition Worth Publishers USA
2. William H. Branson, 2006 Macroeconomic Theory and Policy
Reference:
3. Eduard Shapiro, 2007. Macroeconomic Analysis 5th edition New Delhi
4. Olivier Blanchard, 1997.Macroeconomics Prentice Hall Inc. New jersey USA
5. Frederick Mishkin, 1998. The Economics of Money, Banking and Financial Markets 5 th
edition USA
44
Course Name: Introduction to Statistics
COURSE DESCRIPTION:
we use statistical concepts intuitively in our daily lives; and believe it or not, we
all think statistically. If not, think how many times you have decided to take a
jacket with you because you have predicted it will be cold after hours; how many
times you have given your blood for medical test in a laboratory; etc. In fact,
modern society is driven by statistics. This course is an introductory course
which helps students get a preliminary knowledge on statistical methods and
their applications. Data and probability related issues will be addressed. On the
progress of the course, emphasis will be given to sampling theory, data collection
and presentation, measures of central tendency and variation, linear regression
and elementary probability theory. The rationale for providing Introduction to
Statistics is to equip students with an arsenal of techniques for understanding
Statistics for Economists, which focuses on probability theory, parameter
estimation and hypothesis testing.
COURSE OUTCOMES:
Upon completing this course, students will be able to:
 Explain the basic concepts of Statistics;
 Collect and organize statistical data;
 Identify the different types of sampling techniques;
 Analyze and conclude based on the collected data; and
 Understand the basics of introductory probability theory.
 Make descriptive statistical analysis using summary tables and various statistical charts,
graphs and figures
Course Contents for Lecture:

1. INTRODUCTION
3 hrs 1.1 Definition of statistics
1.2 Classification statistics
1.3 Applications of Statistics
1.4 Types of Data (Scale of measurement)
1.5 Sources of Data
2. SAMPLING THEORY
6 hrs 2.1 Basic Concepts
2.2 Reasons for Sampling
2.3 A Review of Methods of Sampling
2.4 Probability Vs Non-Probability
Sampling Techniques
3. DATA COLLECTION AND PRESENTATION
8 hrs 3.1 Data Collection
3.2 Classification of Data
3.3 Methods of Data Collection
3.4 Tabular Methods of Data Presentation
45
3.5 Frequency Distributions
3.6 Graphic Methods of Data Presentation
4. MEASURES OF CENTRAL TENDENCY
9 hrs 4.1 The Use of Summation Notation
4.2 The Mean and its Properties
4.3 Arithmetic, Geometric, and Harmonic
4.4 The Median and Other Measures of Location
4.5 Deciles, Quartiles, Quintiles, Percentiles
4.6 Mode and its properties
5. MEASURES OF VARIATION
6 hrs 5.1 Introduction
5.2 Types of Measures of Variation
5.2.1 Range, Interquartile Range, Mean Deviation
5.2.2 Variance and Standard Deviation
5.2.3 Coefficient of Variation, Standard Scores
5.3 Moments, Skewness and Kurtosis
6. Simple linear Regression and correlation analysis
8 hrs 6.1 Simple Linear Regression (The Method of Ordinary
Least Square (OLS))
6.2 Correlation Analysis (Coefficient of Correlation, Rank
Correlation Coefficient
7. Elementary probability
8hrs 7.1 Definition of Terms and Concepts
7.2 Principles of Counting
7.3 Some Rules of Probability
7.4 Conditional Probabilities and Independence
7.5 Basic Concepts of Probability Distributions

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Assessment method Weight
Assignment (Indiv/group) 20%
Test/Qiuze 30%
Final Exam 50 %
Total 100%
46
Course Policy
 Late coming is not allowed and no student is allowed to enter after class started.
 Plagiarism is strictly forbidden; it entails serious penalty.
 While cheating during exam sessions results in minimum grade of “F “, cheating in quizzes
and tests is subjected to a zero mark in the particular quiz or test he/she cheated. All
cheating cases will be reported to the department for further considerations.
 Students should switch off their cell phones while they are in class and during all kinds of
exam sessions.
 Students must attend at least 80% of the classes. A student who failed to attend at least 80%
of the classes will not be allowed to sit for the final examination.
 Missing a quiz without convincing evidences will fetch the students a grade of zero marks
in that specific quiz
REQUIRED REFERENCES
1. Freund, J.E. and G.A. Simon (1992). Modern Elementary Statistics, 8th ed., Prentice-Hall.
2. Hooda, R. P. (2003). Statistics for Business and Economics, 3rd ed., New Delhi: Macmillan.
3. Monga, G.S. (2000). Mathematics and Statistics for Economics, 2nd ed., Delhi: Vikas
Publishing.
4. Freund, E.J. Modern Elementary Statistics, John Wiley.
5. Gupta, C.P. Statistical Methods.
6. Gupta, C.B and Gupta, V. An Introduction to Statistical Methods
7. Leven,J. Elementary Statistics in Social Research.
8. Pine, V.R. Introduction to Social Statistics: Its Elements and Application
47
Course Name: Statistics for Economists
COURSE DESCRIPTION:
This course is largely a mathematical statistics course. It is designed to acquaint
students with the basics of probability and statistical distribution theory, and
statistical inference. A working knowledge of mathematical concepts such as
differential and integral calculus is mandatory. The rationale for providing
Statistics for Economists is to equip students with an arsenal of techniques and
lay statistical foundations for understanding econometrics, a subject that focuses
on empirical analysis of problems arising in social sciences such as economics,
politics, etc. Students are thus advised at the outset to bear in mind the
integration between statistics and econometrics, which is offered next semester.
This course is a pre-requisite for taking courses in econometrics.
COURSE OUTCOMES:
Upon completing this course, students are expected to:
 Understand the concepts of probability theory and statistical distribution theory and
statistical inference;
 Lays basic statistical foundations for understanding econometric methods used in
economic analysis.
 Lays solid understanding of statistical inference used economic analysis (estimation and
hypothesis tests); and
 apply statistics in economic analysis and modeling.

1. OVERVIEW OF BASIC PROBABILITY THEORY
1.1 Sample Space, Sample Points, Events & Event Space
1.2 Definitions of Probability
1.3 Axioms of Probability
6 hours
1.4 Counting Procedures
1.5 Conditional Probability and Independence
1.6 Bayes' Theorem
2. RANDOM VARIABLES AND PROBABILITY DISTRIBUTIONS ()
2.1 The Concept & Definition of a Random Variable
2.2 Discrete Random Variables and their Probability
Distributions
9 hours 2.3 Continuous Random Variables and their Probability
Density Functions
2.4 The Expected Value of a Random Variable
2.5 Moments and Moment Generating Function
3. SPECIAL PROBABILITY DISTRIBUTIONS AND DENSITIES
3.1 Bernoulli & Binomial Distributions
3.2 Hyper-Geometric Distribution
9 hours
3.3 The Poisson Distribution
3.4 Uniform Density & The Normal Distribution
48
3.5 Gamma & Beta Distribution
3.6 The Normal Approximation to the Binomial Distribution
4. JOINT AND CONDITIONAL PROBABILITY DISTRIBUTIONS
4.1 Joint and Marginal Distributions
4.2 Conditional Distributions and Independence
4.3 Expectation
6 hours
4.3.1 Covariance and Correlation
4.3.2 Conditional Expectation
4.3.3 Independence and Expectation
5. SAMPLING AND SAMPLING DISTRIBUTIONS ()
5.1 Random Sample
5.2 Statistic and Sample Moments
5.3 Law of Large Numbers
6 hours
5.4 Central Limit Theorem
5.5 Sampling from Bernoulli and Poisson Distributions
5.6 Sampling from a Normal Distribution
6. ESTIMATION
6.1 Basic Concepts
6.2 Methods of Point Estimation
6 hours
6.3 Desirable Properties of Estimators
6.4 Interval Estimation
7. HYPOTHESIS TESTING
7.1 Basic Principles in the Design and Evaluation of
Hypotheses
6 hours
7.2 Large Sample Tests
7.3 Small Sample Tests
Course Policy
 While cheating during examination sessions results in a grade of “F “, cheating in quizzes
and tests is subjected to a zero mark in the particular quiz or test he/she cheated. All
cheating cases will be reported to the department for further considerations.
 Students should switch off their cell phones while they are in class and during all kinds of
examination sessions.
 Students must attend at least 80% of the classes to be legible to sit for the final examination.
Missing a quiz/test without convincing evidences will fetch the students a grade of zero
marks in that specific quiz/test.
 Attending at least 80% of the tutorial classes is mandatory.

 Lecture Method, Group Work and Assignment
49
Assessment Methods
Student evaluation in this Course consist both formative and summative assessments including
quizzes, tests and final exam. Marks will be allocated according to the following grading
schedule.
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%
REQUIRED REFERENCES:
1. Hoel, P.G. (1984). Introduction to Mathematical Statistics
2. Freund, J.E. and G.A. Simon (1992). Modern Elementary Statistics, 8th ed., New Jersey: John
E. Freund‟s Mathematical Statistics
3. Freund, J.E. and R.E. Walpole (1987). Mathematical Statistics, 5th ed., New Delhi: Prentice-
Hall.
4. Mood, A.M., F.A. Graybill and D.C. Boes (1988). Introduction to the Theory of Statistics, 3rd
ed., McGraw-Hill.
5. Ross, Sheldon M. (2007), Introduction to Probability Models
6. Miller, I. and M. Miller (2014). John E. Freund‟s Mathematical Statistics, 8th ed., Delhi:
Pearson.
7. Prentice-Hall.
8. Hooda, R. P. (2003). Statistics for Business and Economics, 3rd ed., New Delhi: Macmillan.
9. Hays, W.L (1994). Statistics, 5th ed., Florida: Holt, Rinehart and Winston, Inc.
10. Hoel, P.G. (1984). Introduction to Mathematical Statistics, 5thed.
11. Mendenhall, W., R. L. Scheafer and D.D. Wackerly (1981). Mathematical Statistics with
Applications, 2nd ed.manathan, R. (1993).
12. Application, 2nd edn. Manathan,R. (1993) Statistical Methods in Econometrics, Academic Press.
50
Course Title: Mathematical Economics
Credit Hours: 3
EtCTS: 5
Pre-requisite: Econ 2012
Course description
This Course introduces and discusses mathematical techniques used in economic analysis. The
Course covers topics in optimization in both static and dynamic settings. It equips students with
the ability to analyze simple economic models of constrained optimization and interpret various
mathematical parameters in an economically meaningful fashion. The Course also covers the
concept of the Kuhn–tucker theorems and introduces difference and differential equations with
their respective applications to solve the real and practical problems in the economy. Students
will also be able to analyze both linear and nonlinear dynamic economic models, to find steady
states and discuss stability properties.
Course Learning Aims

The Course aims to provide an insight into the importance of mathematical methods in
economics. It aims to introduce the basic mathematical skills required by economists and show
how a range of mathematical techniques may be applied to economic modelling and analysis.
Learning Outcomes
On successful completion of this module, students will be able to:
 make use of the mathematical approach in formulating and analyzing economic
problems in both dynamic and static settings;
 interpret mathematical formulations of economic problems;
 solve a range of mathematically formulated economics problems;
 derive and draw economic insights from solutions to mathematically formulated
economic models.
Course content
Lecture Conceptual Focus Reading
hours
Chapter One: Derivatives in Use  Chiang (1984)
1.1. Univariate Calculus chapters 7,8,9,10,11
- Increasing and decreasing functions  Dowling (1980)
- Concavity and convexity chapters 3,4,5,9
- Linear approximations
12 hours
- Polynomial approximations
- Estimation of functions (Maclaurin and Taylor series)
- Intermediate value theorem, Newton method
1.2. Multivariate Calculus
- Homogeneous functions and Euler's theorem
- Total differentials and implicit differentiation
51
Chapter Two: Constrained Optimization  Chiang (1984)
2.1. One variable constrained optimization with non-negativity chapters 12,21
constraint  Dowling (1980)
9 hours 2.2. Two variables problems with equality constrains chapters 6,13
2.3. Inequality constraints and the theorem of Kuhn-Tucker
2.4. The General Case: Mixed constraint
2.5. Necessary and sufficient condition for optimization
Chapter Three: Comparative Static Analysis  Chiang (1984)
3.1. The nature of comparative static analysis chapters 7,8
3.2. Differentiating systems of equations  Dowling (1980)
6 hours
3.3. The jacobian and hessian determinants chapter 13
3.4. Comparative static of general function models
3.5. Limitation of comparative static analysis
Chapter Four: Differential Equations  Chiang (1984)
4.1. Definition and type of differential equations chapters 14, 15
4.2. Solution of a differential equation  Dowling (1980)
6 hours 4.3. First order linear differential equations chapter 16
4.4. Exact differential equations
4.5. Second order linear differential equations
4.6. Economic applications of differential equations
Chapter Five: Difference Equation  Chiang (1984)
5.1. Definitions and concepts chapters 16 , 17
6 hours 5.2. First order difference equation  Dowling (1980)
5.3. Second order difference equations chapters 17, 18
5.4. Economic applications
Chapter Six: Dynamic Optimization  Dowling (1980)
6.1. Discrete time optimization chapter 21
6.2. Continuous time optimization
8 hours 6.3. Optimal control theory
6.4. Economic applications
CourseDelivery Methods
The course is delivered through the following methods: Lecture Method, In-class problem
solving, Group Work, Assignment.
class works and discussions.
Assessment criteria and grading system
tests and final exam. Marks will be allocated according to the following grading schedule.
Assignment (Individual/group) 10%
Tests (Max of 20% each) 40%
Final Exam 50%
Total 100%
Reading Materials
1. Allen, R.G.D. (1982), Mathematical Analysis for Economists, Macmillan, London.
52
2. Chiang, Alpha C. (1984), Fundamental Methods of Mathematical Economics, McGraw-Hill.
3. Dowling, E.T. (1980), Mathematics for Economists (Schaum's Outline Series), McGraw-Hill
4. Klein, M. (1998), Mathematical Methods for Economics, Addison-Wisley.
5. Hoy, M., J.Livernois, C.McKenna, R.Rees and T.Stengos (2006). Mathematics for Economics,
2nd Edition , Eastern Economy Edition
6. Sydsaeter, K. & Hammond, P. (2002), Essential Mathematics for economic analysis, prentice–
Hall.
53
Course Name: Econometrics I
Course Description:
The course aims at introducing the theory (and practice) of cross-sectional econometrics. It
first makes an introduction to the basic concepts in econometrics like economic and
econometric modeling as well as types of data; then proceeds to the simple classical linear
regression model and introduces estimation techniques such as the method of moments,
ordinary least squares and maximum likelihood estimation, inference and analyses of
residuals. This is then built into the multiple linear regression framework. After making tests
of linear restrictions emanating from economic theory, the course will finally try to highlight
the problems of multicollinearity, heteroscedasticity and autocorrelation (violations of the
basic assumptions of classical linear regression models). The course builds upon your
previous course Statistics for Economists. Hence, familiarity with the material, particularly
sampling distributions, estimation and hypothesis testing will be of much help. These will be
applied on Ethiopian/international data using statistical packages.
Course Outcomes:
The main outcomes of this course is to enable students have a good background knowledge
on cross-sectional econometric models. More specifically, after the completion of the course,
students are expected to:
o Distinguish between economic and econometric models;
o Do simple and multiple regression with economic data (both manually and using
statistical packages);
o Interpret regression results (like coefficients and R2) and test hypotheses (both
manually and using statistical packages); and
o Detect (in) existence of problems of multicollinearity, heteroscedasticity and
autocorrelation as well as suggest how to rectify such problems (both manually
and using statistical packages).

1. Introduction
4 hours 1.1. Definition and Scope of Econometrics
1.2. Models: Economic models and Econometric
models
1.3. Methodology of Econometrics
The Sources, Types and Nature of Data
2. Simple Linear Regression
17 hours 2.1. Concept of Regression Function
2.2. Method of Moments & Method of Ordinary Least
Squares
2.3. Residuals and Goodness-of-fit
2.4. Properties of OLS Estimates and Gauss-Markov
Theorem
2.5. Maximum Likelihood Estimation
54
2.6. Confidence Intervals and Hypothesis Testing
2.7. Predictions using Simple Linear Regression Model
3. Multiple Linear Regression
13 hours 3.1. Method of Ordinary Least Squares revised
3.2. Partial Correlation Coefficients & their Interpretation
3.3. Coefficient of Multiple Determination
3.4. Properties of Least Squares and Gauss-Markov
Theorem
3.5. Hypothesis Testing in Multiple Linear Regression
3.6. Predictions using Multiple Linear Regression
4. Violations of the Assumptions of the Classical Linear
Regression Model
14 hours 4.1. Heteroscedasticity
4.2. Autocorrelation
4.3. Specification Errors: Consequences of Omission of
relevant Variables and inclusion of irrelevant
variables
4.4. Tests of Parameter Stability
4.5. Multicollinearity
Course Policy
o Late coming is not allowed and no student is allowed to enter after class started.
o Plagiarism is strictly forbidden; it entails serious penalty.
o Assignments are required to be submitted before or on the deadline.
o While Cheating during examination sessions results in a grade of “F “, cheating in
quizzes and tests is subjected to a zero mark in the particular quiz/test the student
cheated. All cheating cases will be reported to the department for further
considerations.
o Students should switch off their cell phones while they are in class and during all
kinds of examination sessions.
o Students must at least attend 80% of the class. A student who failed to attend at least
80% of the classes will not be legible to sit for the final examination.
o Missing a quiz/test without convincing evidences will fetch the students a grade of
zero marks in that specific quiz/test.
REFERENCES:
1. Gujarati, D. N. and D. C. Proter (2009). Basic Econometrics, 5th edition, McGraw-
2. Maddala, G. S. (1992). Introduction to Econometrics, 2nd edition, Macmillan.
3. Wooldridge, J. (2013). IntroductoryEconometrics: A Modern Approach, 5nd ed.
4. Enders, W. (2014). Applied Econometric Time Series, John Wiley & Sons:, 4th ed.,
Singapore.
5. Koutsoyiannis, A. (2001). Theory of Econometrics, Palgrave: New York.
6. Johnston, J. and J.Dinardo (1997)Econometric Methods, 4th edition.
7. Kmenta, J. Elements of Econometrics, 2nd edition.
8. Intrilligator M.D, R.G. Bodkin, and D. Hsiao (1996). Econometric Models, Techniques
and Applications.
9. Verbeek (2004), A Guide to Modern Econometrics. New York: John Wiley & Sons, Ltd.
55
Course Name: Econometrics II
Prerequisite: Econ 3061
Course Description:
This course is a continuation of Econometrics I. It aims at introducing the theory (and
practice) of regression on qualitative data, time series and panel data econometrics as
well as simultaneous equation modeling. It first makes an introduction to the basic
concepts in qualitative data modeling such as dummy variable regression and binary
choice models (LPM, Logit and Probit). Elementary time series models, estimations
and tests for stationarity of data will then be discussed. It also covers introduction to
simultaneous equation modeling with alternative estimation methods. Introductory
pooled cross-sectional and panel data models will finally be highlighted. All of these
theoretical concepts will also be complemented by computer lab practices using
statistical packages such as STATA, EViews, PcGive, etc. applied on available
Ethiopian/international data.
Course Outcomes:
After the completion of this course, students are expected to:
 Understand the basic concepts in regression involving independent dummy variables
and limited dependent variables;
 understand the theory and practice of elementary time series econometrics;
 Understand the motivation and estimation methods of simultaneous equation
modeling;
 Understand introductory ideas on linear panel data models; and
 Apply those theoretical concepts in estimation using statistical softwares.
Course Contents for Lecture

1. Regression Analysis with Qualitative Data:
Binary (or Dummy Variables)
1.1. Describing Qualitative Data
1.2. Dummy regressors
1.3. Limited Dependent Variable Models
15 hours 1.3.1. The Linear Probability Model (LPM)
1.3.2. The Logit and Probit Models
1.3.3. Interpreting the Probit and Logit Model
Estimates
2. Introduction to Simultaneous Equation models()
2.1. The Nature of Simultaneous Equation Models
2.2. Simultaneity bias
2.3. Order and rank conditions of identification
9 hours
(without proof)
2.4 Indirect least squares and 2SLS estimation of
structural equations
3 Introduction to Basic Regression
Analysis with Time Series Data
56
3.1 The nature of Time Series Data
3.2 Stationary and non-stationary stochastic Processes
3.3 Trend Stationary and Difference Stationary
18 hours Stochastic Processes
3.4 Integrated Stochastic Process
3.5 Tests of Stationarity: The Unit Root Test
4 Introduction to Panel Data

Regression Models
4.1 Introduction
4.2 Estimation of Panel Data Regression Model: The
6 hours Fixed Effects Approach
4.3 Estimation of Panel Data Regression
Model: The Random Effects Approach
Contents for Computer Lab.:

1. Regression with Qualitative Data using STATA (6 hours)
 Dummy Regressors
 Limited Dependent Variable Models
- The Linear Probability Model (LPM)
- The Logit and Probit Models
- Interpreting the Probit and Logit Model Estimates
- Marginal Effects of Probit and Logit Model Estimates
2. Introductory Time Series Regression using STATA/EViews/PcGive (5
hours)
 Tests of Stationarity: the Unit Root Test
 Estimation of Stationary time series
 Autocorrelation
 Estimation of Non-stationary time series
3. Introductory Panel Data Regression Models(5 hours)
 Fixed Effects Model
 Random Effects Model
Course Policy
 While cheating during examination sessions results in a grade of “F “, cheating in
quizzes and tests is subjected to a zero mark in the particular quiz and/or test the
he/she cheated. All cheating cases will be reported to the department for further
considerations.
 Students should switch off their cell phones while they are in class and during all
 Students must attend at least 80% of the classes. A student who failed to attend at
least 80% of the classes will not be legible to sit for the final examination.
 Missing a quiz without convincing evidences will fetch the students a grade of
zero marks in that specific quiz
57
REFERENCES:
1. Gujarati, D. N. and D. C. Proter (2009). Basic Econometrics, 5th edition, McGraw-
Hill.
2. Maddala, G. S. (1992). Introduction to Econometrics, 2nd edition, Macmillan.
3. Wooldridge, J. (2013). IntroductoryEconometrics: A Modern Approach, 5nd ed.
4. Koutsoyiannis, A. (2001). Theory of Econometrics, Palgrave: New York.
5. Johnston, J., Econometric Methods, 3rd edition.
6. Kmenta, J. Elements of Econometrics, 2nd edition.
7. Intrilligator M.D, R.G. Bodkin, and D. Hsiao (1996). Econometric Models, Techniques
and Applications.
8. Verbeek (2004), A Guide to Modern Econometrics. New York: John Wiley & Sons, Ltd.
9. Long, J. Scot (1997). Regression Models for Categorical and Limited Dependent
Variables. UK: SAGE Publications, Inc
10. Wooldrige J. M. Econometric Analysis of Cross Section and Panel Data. The MIT
Press, 2002.
58
Course Name: Research Methods in Economics
Course Description:
Research in any discipline is a base for its development. Basic
knowledge in a discipline is also generated through research.
Economic research is additionally required for nations to grow
at all levels and to have a healthy macroeconomic
environment. Research undertakings at household, firm,
national and cross-country levels are relevant. Understanding
the basics of research in general and economic research in
particular is, therefore, vital. This course is an introductory
course which helps students get a preliminary knowledge on
the various methods in research and their applications. Specific
techniques and steps in economic research will be addressed.
Upon the progress of the course, emphasis will be laid on
research proposal writing, sampling techniques, data collection
methods, hypothesis testing, data analysis, research report
writing, etc. Note that this course will equip you with an
arsenal of techniques in the short-run to effectively write term
papers in various courses and your senior essay before
graduation, and in the long-run to research on various
economic issues after your graduation.
Course Objectives:
After the completion of this course, students are expected to:
 Define the concept of research;
 Distinguish between scientific sources vs. other sources of knowledge;
 Explain the assumptions that underlie research methodologies;
 Discuss the philosophy of research;
 Identify different types of research;
 Understand the steps to be followed to conduct an economic research;
 Be able to prepare a standard research proposal;
 Demonstrate the ability of analytical and critical thinking;
 Understand various methods of data collection and analysis;
 Be able to write standard research reports; and
 Develop presentation skills in addressing theoretical and empirical issues.
Course Contents:
1. The Foundations of Economic Research
1.1. Definition of Research
1.2. Characteristics of Research
1.3. Classification of Research
5 hours 1.4. Motivation in Research
1.5. Types of Research
1.6. Criteria of Good Research
1.7. The research process
59
2. Formulation of Research Problem and hypothesis
2.1. Research Problem: the difference between exiting
problem and research problem
2.1.1. Source of Research Problem
2.1.2. Criteria of a good Research Problem
7 hours 2.1.3. Formulating and testing of the problem
2.2. Research Hypothesis
2.2.1. Types of Hypothesis
2.2.2. Characteristics of a usable hypothesis
2.2.3. Difficulties in formulating Hypothesis
3. Research Design
3.1. Definition
3.2. Components of Research Design
3.3. Related literature review, literature search and
stages and procedures of literature review
3.3.1. Characteristics of Related Literature
3.3.2. Recording of Reading for Literature
8 hours 3.3.3. Note taking: Reviewing the literature
3.3.3.1. Paraphrasing
3.3.3.2. Incorporating Direct Quotes
3.3.4. Proper Citation Style
3.4. Conceptualization of the different terms used in
investigation
3.4.1. Variables
4. Research Proposal
6 hours 4.1.1. Importance of Research Proposal
4.1.2. Elements of a Research Proposal
5. Census and Sample Survey
5.1. Over View of Census and Sample Investigation
5.2. Characteristics of a Good Sample Design
5.3. Sampling
5.3.1. Introduction to Sampling Techniques
5.3.1.1. Probability Sampling techniques
5.3.1.1.1. Simple Random Sampling Technique
5.3.1.1.2. Systematic sampling Technique

8 hours
5.3.1.1.3. Stratified Sampling Technique
5.3.1.1.4. Cluster Sampling Technique.

5.3.1.2. Hybrid Sampling Non-probability
Sampling Technique
5.3.1.2.1. Convenient sampling
5.3.1.2.2. Quota Sampling
5.3.1.2.3. Purposive or Judgment sampling
5.3.1.2.4. Snowball (Network) Sampling – chain
60
sampling
5.3.1.2.5. Snowball Sampling
5.3.1.2.6. Typical case sampling
5.3.2. Sampling and Non-Sampling Errors
6. Data Collection
6.1. Classification of Data
6.1.1. Primary Data
- Questionnaire Method
- Interview and its sorts
6 hours - Observation and its types
6.1.2. Secondary Data and its Classification
6.2. Sources of Information
6.3. Statistical units in collection of Data
- Types of Statistical Units
7. Data Processing and Analysis
7.1. Coding, editing and cleaning the data
7.2. Data analysis
5 hours 7.3. Concept of Economic Modelling
7.4. Testing hypothesis: Falsification as a scientific
approach
8. Writing the Research Report (5 hours)
3 hours 8.1. The writing process
8.2. Types of research reports
8.3. Research report formats for long reports
8.4. Components of a research report
8.5. Presenting the research report
Course Policy
 While cheating during examination sessions results in a grade of “F “, cheating in
quizzes and tests is subjected to a zero mark in the particular quiz and/or test the
he/she cheated. All cheating cases will be reported to the department for further
considerations.
 Students should switch off their cell phones while they are in class and during all
 Students must attend at least 80% of the classes. A student who failed to attend at
least 80% of the classes will not be legible to sit for the final examination.
 Missing a quiz without convincing evidences will fetch the students a grade of
zero marks in that specific quiz
61
REFERENCES
1. Ranjit Kumar. 2005. Research Methodology: A step-by-step guide for beginners. London.
Sage Publications
2. C.R. Kothari. 2004. Research Methodology: Methods and Techniques. Second Revised
Edition.
3. Guajarati, Damodar N. 2001. Basic Econometrics, : McGraw-Hill
4. Leedy, Paul. 1997. Practical Research: Planning and Design. Upper Saddle River: Prentice-
Hall.
5. Mukherjee, C., H. White, and M. Wuyts. 1998. Econometrics and Data Analysis in
Developing Countries. London: Routledge.
6. Newman, W. L. 1997. Social Science Research Methods: Qualitative and Quantitative
Approaches. Boston: Ally and Bacon
7. Blaug, Mark. 1992. The Methodology of science: How Economists explain, second edition,
1992.

class works at the middle and end of each session and in group discussions inside and outside of
the class. Specifically the course will be delivered through the following methods:
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.

Assignment (Individual Proposal 20%
Development process)
Final Proposal - 30%
Final Exam 50 %
Total 100%
62
Course Title: Development Economics I
Course Description
The Course is to provide a brief overview of the development and underdevelopment of
nations and outstanding development theories. It explores the principles, concepts and theories
of that have been developed and applied by economists for the study of the problems of
developing nations. In addition, it examines recent developments in theories of growth and
transformation in the context of developing economies and concentrates on key areas of concern
to those responsible for development policy.
Course Objective
Understand how to formulate, test and measure economic models to undertake /conduct
research. Acquire the fundamental developmental concepts to understand contemporary
economic problems of developing countries.
Lecture Lecture Topics

hours
1. Economics of Development: Concepts and Approaches
1.1 Basic concepts and definition of development
economics
1.2 The Scope and Nature of Development Economics
1.3 Interests in and Evolution of Development Economics
1.4 Economic Growth and Economic Development
1.5 Three core values of Development
1.6 Measurement and international comparison of growth
and development.
1.6.1 Conventional Measures of Development and their
Limitations
9 hours 1.6.2 Alternative measures of level of development
 Physical Quality of Life Index,
 Human Development Index
 Human poverty Index
1.7 Obstacles to Development and Basic Requirements for
Development
1.8 Development Gap
1.9 From MDGs to SDGs and Africa Agenda 2063
2. Structural features and common characteristics of developing
countries
6 hours 2.1 An Over View of the Diverse Structure of Developing
Countries
2.2 Common Characteristics of Developing Countries
3. Growth Models and Theories of development
3.1 Facts of economic growth and why growth rates differ
12 hours
across countries
3.2 Factors of Economic growth
63
3.3 Models and theories of economic growth and
development
3.3.1 Linear stages of growth models
 Rostow‟s stage of growth
 Harod Domar growth model
 Solow growth model
3.3.2 Structural change models: Lewis theory of
Development
3.3.3 Dualistic Theories
 Social Dualism
 Technological Dualism
 Financial Dualism
3.3.4 The process of Cumulative Causation
3.3.5 The Balanced Growth vs Unbalanced Growth
3.3.6 The International Dependence Model
3.3.7 A Model of Low Level Equilibrium Trap
3.3.8 The Neoclassical counterrevolution
3.3.9 The new growth theories
 Endogenous Growth Theory
 The Big-Push Theory
3.4 The O-Ring model
4. Historic Growth and contemporary Development: Lessons and
controversies
4.1 The Economics of growth
4.1.1 Traditional Approach (Economic Factors) to Development
 Natural Resource
 Capital Accumulation
 Organization
 Technological Progress
 Division of Labor and Scale of Production
9 hours
4.1.2 Institutional Approach to Development
 Type of Government
 Institutions
 Social Structure of Population
 Social Capital and Cultural Traits
4.2 The Historical record: Kuznets‟s six characteristics of
Modern Economic Growth
4.3 The limited value of the Historical Growth Experience:
Differing Initial Conditions
5. Income Inequality, Poverty and Development
5.1 Overview of Income Distribution, Poverty and
Economic Growth
12 hours 5.2 Measures of Income Inequality and Poverty
 Approaches to Measures of Income Inequality
 Approaches to Measures of Absolute Poverty
5.3 Poverty, Inequality, and Social Welfare
64
 What‟s So Bad about Extreme Inequality?
 Kuznets Inverted U-hypothesis
 Income Inequality and Economic Growth
5.4 Poverty Reduction and Economic Growth
5.5 Economic Characteristics of poverty groups
 Rural Poverty
 Women and Poverty
 Ethnic Minorities, Indigenous Populations, and
Poverty
5.6 Policies Options for Poverty Reduction and
enhance income Distribution

The delivery method shall be student-centered. Students are highly expected to
participate in class works at the middle and end of each session and in group
discussions inside and outside of the class. Specifically the course will be delivered
through the following methods:
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.

Final Exam 50 %
Total 100%
Course Policy
 Late coming is not allowed and no student is allowed to enter after class has
started.
 Cheating during exam sessions results in a minimum of “F “grade while
cheating in quizzes and tests is subjected to a zero mark. All cheating cases will
be reported to the department for further considerations.
65
 Students should switch off their cell phones while they are in class and must
keep their cell phones switched off during all kinds of exam sessions.
 Students must attend 80% of the class for the course. Failure to attend 80% of
the class will not allow the student to sit for the final exam.
 Missing a quiz without convincing evidences will earn the students a grade of
zero marks in that specific quiz.
Required References
1. Todaro,M.,(1994)EconomicDevelopment,Fiftheditions,Longman:NewYorkand
London.
2. TodaroM.P.& Smith S.C.(2012) Development Economics, eleventh edition,Harlow,
Pearson & Addison Wesley:London.
3. Ray, D.(1998) Development Economics, Princeton UniversityPress.
4. Gillis, Dwight H. Perkins, Michael R., Donald R. and Snodgrass, W.W. (1996)
Economics of Development, Malcolm. Norton &Company.
5. Meier, Gerald, M. and James E. Rauch(2000)Leading Issues in Economic
Development, Seventh edition, Oxford University Press:New York and Oxford.
6. Ghatak,S.(1995)Introduction to Development Economics,Third edition,Routledge:
London.
7. Basu, Kaushik(1997) Analytical Development Economics: The Less Developed Economy
Revisited, TheMIT Press:London.
8. Thirlwall,A.P.(2003)Growth and Development:With special reference to Developing
countries, Seventh edition, PalgraveMacmillan, UK.
9. Jones, introduction to Economic growth
10. Bardhan, Pranab and Christopher Udry (1999) Development
Microeconomics, Oxford UniversityPress:
11. Deaton, Angus(1997)The Analysis of Household Surveys: A Microeconometric
Approach to Development Policy, theWorld Bank, the John Hopkins University
Press: Baltimore.
12. Dasgupta, Partha (1993) An Enquiry into Well-Being and Destitution,
Clarendon Press: London.
13. World Bank, (various issues) World development report.
66
Course Title: Development Economics II
Lecture Lecture Topics

hours
1. Population Growth and Economic Development
1.1 The Basic Issue: Population Growth and the Quality of
Life
9 hours 1.2 Trends of population growth and age structure
1.3 The Hidden Momentum of Population Growth
1.4 The Demographic Transition
1.5 The Causes of High Fertility in Developing Countries:
The Malthusian and Household Models
1.5.1 The Malthusian Population Trap
1.5.2 The Microeconomic Household Theory of
Fertility
 The Demand for Children in Developing
Countries
 Implications of Women‟s Education for
Development and Fertility
1.6 The Consequences of High fertility: Some Conflicting
Opinions
1.6.1 Population Growth is Not a Real Problem
1.6.2 Population Growth is a Rea l Problem
1.6.3 Other Empirical Arguments: Seven Negative
Consequences of Population Growth
1.7 Some
2. Human Policy
Capital: Approaches
Education and Health in Economic
Development
9 hours 2.1 Education and health in developing countries
2.2 Investing in Education and Health: The Human Capital
Approach
2.3 Improving Health and Education: Why Increasing
Income Is Not Sufficient?
2.4 Educational Systems and Development
 Educational Supply and Demand: The Relationship
between Employment Opportunities and
Educational Demands
 Social versus Private Benefits and Costs
 Education, Inequality, and Poverty
2.5 Health Systems and Development
2.6 The Gender Gap: Women and Education
2.7 Consequences of Gender Bias in Health and Education
2.8 Policies for Health, Education, and Income Generation
67
3. Rural-urban interaction, migration, and unemployment
6 hours 3.1 Migration and urbanization dilemma
3.2 The Role of Cities and urban Giantism
3.3 Urban informal sector and urban unemployment
3.4 Economic model of Rural-Urban Migration
 TheLewis model
 TheHarris-Todaro model of Migration
3.5 Comprehensive strategies for employment and migration
6 hours 4. Agriculture and Economic Development
4.1 Agricultural Progress and Rural Development
4.2 The Structure of Agrarian systems in the Developing
World
4.3 The Important Role of Women in Agriculture
4.4 The Economics of Agricultural Development
 Special features of agriculture
 The contribution of agriculture to development
 Constraints of agricultural productivity
 Agricultural strategies and the role of the
government in the agricultural sector
5. International trade and economic development: the trade
policy debate and Industrialization
5.1 Role of foreign trade in development
9 hours 5.2 Terms of trade
5.3 The trade policy debate: Export promotion
industrialization versus Import substitution
Industrialization
5.4 Balance of Payments and Macroeconomic Stabilization
9 hours 6. Foreign aid, debt, financial reform and development
6.1 Motivations for foreign aid
6.2 Foreign debt
6.3 Foreign direct investment and MNCs
6.4 Financial reform
Course Policy
68
that specific quiz

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
Required References
1. Todaro, M.,(1994)Economic Development, Fifth editions, Longman: New York and
London.
2. TodaroM.P. & SmithS.C. (2012) Development Economics, eleventh edition, Harlow, Pearson &
Addison Wesley: London.
3. Ray, D.(1998) Development Economics, Princeton University Press.
4. Gillis, Dwight H. Perkins, Michael R., Donald R. and Snodgrass, W.W. (1996) Economics of
Development, Malcolm. Norton &Company.
5. Meier, Gerald, M. And James E. Rauch(2000)Leading Issues in Economic Development, Seventh
edition, Oxford University Press :New York and Oxford.
6. Ghatak,S.(1995)Introduction to Development Economics, Third edition, Routledge: London.
7. Basu, Kaushik (1997) Analytical Development Economics: The Less Developed Economy Revisited,
The MIT Press:London.
8. Thirlwall,A.P.(2003)Growth and Development: With special reference to Developing countries,
Seventh edition, Palgrave Macmillan, UK.
9. Jones, introduction to Economic growth
10. Bardhan, Pranab and Christopher Udry (1999) Development Microeconomics, Oxford
University Press:
11. Deaton, Angus(1997)The Analysis of Household Surveys: A Microeconometric Approach to
Development Policy, the World Bank, the John Hopkins University Press: Baltimore.
12. Dasgupta, Partha (1993) An Enquiry into Well-Being and Destitution, Clarendon Press:
London.
69
Course Name: International Economics I
Course Code: Econ 3081.
Course Description
This Course contains two courses: International Economics I and International Economics II.
These courses deal with international trade theories and policy issues and how international
trade is financed. The Course aims to provide a highly focused discussion of topics in
international economics in two separate subject areas of International trade and international
finance in the context of developing countries. Issues covered in the Course are conventional
and nonconventional trade theories which include the classical model (Smith and Ricardo), the
modern and neoclassical theory of trade (the H-O-S model, the Stolper-Samuelson Theorem,
and The Leontief Paradox), The New Trade Theories and the African context (Imperfect
competition and scale economies), Economic Integration and Theories of Customs Union, Trade
Policies and Developing countries (Import Substitution and Export Promotion, Trade and
Development, the World Trade Organization and Developing Countries, etc). Besides, the
issues of the Balance of Payments (and different approaches to balance of payments), Exchange
rate economics, Open-Economy macroeconomics (IS-LM-BP framework, the Mundel-Fleming
Model), the Evolution of International Financial Institutions (the IMF, the World Bank etc…),
impact of capital flows and the debt crisis in African context will be covered.
Course Objective
The objective of this Course is to:

 Demonstrate understanding of the various effects of trade policy interventions
 Be able to identify those groups that benefit and lose from a move from free to restricted
trade
 Demonstrate how to apply economic reasoning to global policy issues in a critical manner
 Demonstrate knowledge of the current issues in economics, an appreciation of how
economists address international economic issues and be familiar with current research
issues in international economics
 Understand the economic basis behind current policy debates in international economics
 Critically address different policy proposals in addressing issues arising in international
economics
 Deliver coherent argument in written work, including coherent arguments for assessing
complex policy issues in the global economy
 Develop presentation skills in addressing theoretical and empirical issues in international
economics
 Lay a foundation of open Macro International Economics
 Discuss and analyze nation‟s international interaction through trade and finance to the
rest of the world.
 Explain approaches and techniques of analyzing trade and finance internationally.
70
I. INTRODUCTION
1.1. Meaning, Nature, and Scope of International Economics
1.2. The Components of International Economics
1.3. The Importance of International Economics
1.4. International Economics and Economic Theories
4 hrs 1.5. Purposes of Economic Theories and/or Models
1.6. Testing a Hypothesis/Theory/ Model
1.7. The Role of Assumptions
1.8. Summary and Conclusions
II INTERNATIONAL TRADE THEORIES

2.1. Historical Development of Modern Trade Theory
2.1.1. Mercantilists‟ View on Trade
2.1.2. Physiocracy: A Link between Mercantilism and Classical School
2.1.3. The Classical /Traditional Trade Theories
2.1.4. The Neoclassical Trade Theories
14 hrs 2.1.5. The New/ Modern Trade Theories
2.1.4.1. The Point of Departure from the Traditional/Classical
trade Theories
2.1.4.2. The Emergence and Development of the New Trade
Theories
2.2. Evaluation of Trade Theories
III. INTERNATIONAL TRADE POLICY
3.1. The Instruments of Trade Policy
3.2. Arguments in Favor of and Against Trade Protection
3.3. Trade Policy and Economic Welfare
10 hrs 3.4. Optimal Trade Policy Intervention
3.5. The Process of Trade Liberalization
3.6. The Political Economy of Protection
3.7. Intellectual Property and Intellectual Property Rights
71
IV. INTERNATIONAL TRADE AND ECONOMIC DEVELOPMENT
4.1. Trade Theory and Economic Development
4.2. Beneficial Effects of Trade
4.3. Static versus Dynamic Analysis in Trade
4.4. Alternative Trade Strategies
4.5. Trade Strategies and Economic Performance
8 hrs 4.6. Export Pessimism and the Prebisch – Singer Thesis
4.7. Trade, the Environment, and Natural Resources
4.8. The Process of Trade Liberalization and its Implications
4.9. The Role of the State: Experiences of South – East Asian Countries
4.10. Current Problems Facing the Developing Countries
V. INTERNATIONAL TRADE INSTITUTIONS AND REGIONAL

ECONOMIC ARRANGEMENTS
5.1. Historical Background: From the General Agreement on Tariffs and
Trade
(GATT, 1947) to World Trade Organization (WTO, 1995)
5.2. WTO Opportunities
5.3. WTO Accession Process and its Challenges
5.4. Issues of Globalization
5.5. Regional Economic Cooperation and Integration
12 hrs 5.5.1. The Definition of Basic Concepts
5.5.2. The Rational for Integration Schemes
5.5.3. The Forms of Integration
5.5.4. The Theory of Customs Union (CU) and its Limitations
5.5.4.1. Trade Creation and Trade Diversion
5.5.5. The Status of Regional Economic Integration in Africa
5.5.6. The Lessons of Integration Experience
5.5.7. Regionalism versus Multilateralism
5.5.8. Summary and Conclusions

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
72
Assignments (Individual / Group) 25%
Mid – Semester 25%
Final Exam 50 %
Total 100%
MAIN REFERENCES
Alemayehu Geda (2012), Fundamentals of International Economics for Developing Countries: A Focus
on Africa, African Economic Research Consortium, Printwell Industries Ltd., Nairobi, Kenya
Appleyard, Dennis R. and Field, Alfred J. (1998), International Economics, Irwin
McGraw - Hill, Boston, U.S.A.
Hallwood, C. Paul and Ronal MacDonald, (1994), International Money and Finance, Oxford,
Blackwell.
Krugman, Paul and Maurice Obstfeld (1997), International Economics: Theory and Policy, Addison
– Wesley Longman, Inc. California, U. S. A.
Markusen et al, International Trade Theory and Evidence, McGraw – Hill Education, 1994
Mitra, D., Panagariya, A. (ed.) (2004), The Political Economy of Trade, Aid and Foreign
Investment Policies, Elsevier
Salvatore, Dominic (1995), International Economics, Prentice hall International, Inc.
Sodersten, B. and G. Reed (1994), International Economics, New York: St. Martin‟s Press,
U. S. A.
Sodersten, B. and G. Reed, (1994), International Economics, Macmillan, London.
Stiglitz J., Charlton A. (2007), fair Trade for All: How Trade can Promote Development, Oxford
University Press
ADDITIONAL / SUPPLEMENTARY READINGS
Balassa, B. (1961), The Theory of Economic Integration, Homewood, Illinois:
Richard D. Irwin, Inc.
Bhagwati, J. N. and T. N. Srinivasan (1983), Lectures on International Trade,
Cambridge, Massachusetts: The MIT Press.
Bagwati, J. N. and T. N. Srinivasan (1983), Lectures on International Trade,
Cambridge, Massachusetts: The MIT Press.
Economic Commission for Africa (2004), Economic Report on Africa 2004: Unlocking Africa’s Trade
Potential, Economic Commission for Africa, Addis Ababa, Ethiopia
_____________, Assessing Regional Integration in Africa: ECA Policy Research Report, Economic
Commission for Africa, Addis Ababa, Ethiopia.
Salvatore, Dominic (1987), Theory and Problems of International Economics, Schaum‟s
Outline Series: McGraw – Hill Book Company.
Snider, D. A. (1954), Introduction to International Economics, Homewood, Illinois:
Richard D. Irwin, Inc.
Course Policy
73
 Students must attend 80% of the class for the course. Failure to attend 80% of the class will
that specific quiz
74
Course Name: International Economics II
Course content
I.THE FOREIGN EXCHANGE MARKET
1.1. What is a Foreign Exchange Market?
1.2. Characteristics and Participants of the Foreign Exchange
Market
1.3. The Functions of Foreign Exchange Markets
1.4. The Demand for and the Supply of Foreign Exchange
1.5. The Foreign Exchange Rate
1.5.1. Definition of Exchange Rate
1.5.2. Spot and Forward Exchange Rates
1.5.3. Nominal, Real and Effective Exchange Rates
10 hrs
1.5.4. The Determinants of Exchange Rates
1.6. Exchange Rate Regimes
1.6.1. Fixed Exchange Rate
1.6.2. Freely Floating / Flexible Exchange Rate
1.6.3. Managed Float / Hybrid System
1.7. The Interaction of Hedgers, Arbitrageurs, and Speculators
1.8. Appreciation / Revaluation and Depreciation /
Devaluation of Currencies
II. THEORIES OF EXCHANGE RATE
DETERMINATION
2.1. The Purchasing Power Parity Theory
2.1.1. The PPP theory and the Law of one price
2.1.2. The absolute, relative and generalized versions of
the PPP theory
2.1.3. Empirical evidence on the PPP theory
2.2. Money, Interest rate and Exchange rate

2.2.1. A Brief Review of the Money Market
2.2.2. The Definition of Money
6 Hours 2.2.3. The Functions of Money
2.2.4. The Supply of and the Demand for Money
2.2.5. The Demand for Foreign Currency Assets
2.2.6. Interest Parity Condition and Rate of Return
2.2.7. Exchange rate and rate of return
2.2.8. Linking Money, the Interest Rate, and the Exchange
Rate
2.3. The monetary model of exchange rate determination
III. BALANCE OF PAYMENTS
75
3.1. Definition and Purposes of Balance of Payments
3.2. Balance of Payments Accounting Principle
3.3. The Components of Balance of Payments
3.4. Balance of Trade and Balance of Payments
3.5. Balance of Payments Disequilibria
3.5.1. Balance of Payments Surpluses and Deficits
12 Hours 3.5.2. Financing Balance of Payments Deficit
3.5.3. Exchange Rates and the Balance of Payments
3.6. Approaches to Balance of Payments
3.6.1. Elasticity Approach to Balance of Payments
3.6.2. Absorption Approach to Balance of Payments
3.6.3. Monetary Approach to Balance of Payments
IV. MACROECONOMIC POLICY IN AN OPEN ECONOMY
4.1. What is Open – Economy Macroeconomics?
4.2. Macroeconomic Policy Goals in an Open Economy
4.3. Stabilization Policies
4.3.1. Fiscal Policy: Tools of Fiscal Policy
4.3.2. Monetary Policy: Tools of Monetary Policy
4.4. International Macroeconomic Policy Coordination
12 Hours 4.4.1. What is meant by International Macroeconomic Policy
Coordination?
4.4.2. Why does the need for International Macroeconomic
Policy Coordination Arise?
4.4.3. Potential Benefits of Policy Coordination
4.4.5. Potential Impediments to Policy Coordination
V. INTERNATIONAL MONETARY SYSTEM AND KEY
INTERNATIONAL FINANCIAL INSTITUTIONS
5.1. What is the International Monetary System?
5.2. Criteria for Evaluating an International Monetary System
5.3. The Evolution of an International Monetary System
5.3.1. The Gold Standard
5.3.2. The Inter – War Experience
5.3.3. The Gold Exchange Standard: Bretton Woods System
5.3.4. The Current System: Managed Float / Hybrid System
8 Hours
5.4. Key International Financial Institutions
5.4.1. The International Monetary Fund (IMF)
5.4.2. The World Bank (WB)
5.5. International Capital Flows and Multinational Corporations
5.6. The Concept of Dutch Disease
5.7. Issues on Foreign Aid and International Debt Crises
76
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Assignments (Individual / Group) 25%
Mid – Semester 25%
Final Exam 50 %
Total 100%
MAIN REFERENCES
Appleyard, Dennis R. and Field, Alfred J. (1998), International Economics, Irwin McGraw - Hill,
Boston, U.S.A.
Bird, Graham. (2004), International Finance and the Developing Economies, Palgrave Macmillan.
Copland, Laurence S. (2005), Exchange Rates and International Finance. 4th ed. Prentice Hall.
Gandolfo, Giancarlo. (2016), International Finance and Open-Economy Macroeconomics, Springer.
Hallwood, C. Paul and Ronal MacDonald. (1994), International Money and Finance, Oxford,
Blackwell.
Isard, Peter (1995), Exchange rate Economics, Cambridge University Press, New York, USA.
Klein, Michael W. and Jay C. Shambaugh. (2010,) Exchange Rate Regimes in the Modern Era, The
MIT Press.
Krugman, Paul and Maurice Obstfeld. (1997), International Economics: Theory and Policy, Addison
– Wesley Longman, Inc. California, U. S. A.
Levi, Maurice D. (2009), International Finance. Fifth edition.
MacDonald, Ronald. (2007), Exchange Rate Economics: Theories and Evidence, Routledge.
Marc, Nelson C. (2001), International Macroeconomics and Finance: Theory and Econometric
Methods. Blackwell Publishers
Pikoulakis, Emmanuel, (1995), International Macroeconomics, Macmillan, London.
Pilbeam, Keith, (1992), International Finance, Macmillan, London.
___________ (2006), International Finance, 3rd Ed., Palgrave.
Salvatore, Dominic. (1995), International Economics, Prentice hall International, Inc.
Schmitt - Grohe, Stephanie, Martin Uribe, and Michael Woodford (Latest version 4 May 2016),
International Macroeconomics, Textbook Manuscript.
Sodersten, B. and G. Reed (1994), International Economics, New York: St. Martin‟s Press, U. S. A.
________________ (1994), International Economics, Macmillan, London.
Visser, Hans (2004) A Guide to International Monetary Economics: Exchange Rate Theories,
Systems and Policies, Third Edition. Edward Elgar.
77
Wang, Peijie. (2005), The Economics of Foreign Exchange and Global Finance, Springer, Berlin.
ADDITIONAL / SUPPLEMENTARY READINGS

Alemayehu, Geda (2000), Finance and Trade in Africa: Macroeconomic Response in the World
Economy Context, London: Pal grave / Macmillan.
Alexander, S. (1959), Effects of devaluation: A simplified synthesis of elasticities and absorption
approaches, American Economic Review, 49, 22 - 42.
Bhagwati, J. N. and T. N. Srinivasan (1964), The PPP Doctrine: A Reappraisal, Journal of Political
Economy, 72, 584 – 596.
Dornbusch, R. (1987), Purchasing Power Parity, in the New Palgrave Dictionary of Economics
(London: Macmillan).
Fleming, J.M. (1962), Domestic Financial Policies Under Fixed and Floating Exchange Rates, IMF
Staff Papers, 9(3), 369 - 379.
Frenkel, J.A. and Johnson, H.G. (eds.) (1976), The Monetary Approach to Balance of Payments, Allen
and Unwin, London.
Grabbe, J.O. (1986), International Financial Markets, New York: Elsevier
Johnson, H.G. (1977), The Monetary Approach to Balance of Payments: A Non-technical Guide,
Journal of International Economics, 7, 251 - 268.
Mundell, Robert (1960), The Monetary Dynamics of International Adjustment Under Fixed and
Flexible Rates, Quarterly Journal of Economics, 74, 227 - 257.
Mundell, Robert (1963), Capital Mobility and Stabilization Policy under Fixed and Flexible Exchange
Rate, Canadian Journal of Economics and Political Science, 29, 487 -499.
Salvatore, Dominic (1987), Theory and Problems of International Economics, Schaum‟s Outline
Series: McGraw – Hill Book Company.
Snider, D. A. (1954), Introduction to International Economics, Homewood, Illinois: Richard D.
Irwin, Inc.
Walmsley, J. (1996), International Money and Foreign Exchange Markets (New York: Wiley)
Course Policy
 Students must attend 80% of the class for the course. Failure to attend 80% of the class will
that specific quiz
78
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Assignments (Individual/group) 25%
Mid – Semester Examination 25%
Final Exam 50 %
Total 100%
79
Course Name: Natural Resource and Environmental Economics
Course Code: Econ- 2091
COURSE DESCRIPTION
The Course requires students‟ background knowledge of introductory economics, and more of
microeconomics. The theoretical foundations try to elaborate how environment affects (and is
affected by) human activities. The subject is concerned on the relationship between
environment and economic activities; the issue and role of property rights; optimal and
sustainable utilization of depletable (non-renewable) and renewable resources; optimal
pollution control; environmental policy instruments; environmental valuation and analysis; and
international environmental issues. Since every rational individual and the society as a whole is
concerned on the balance between human activities and preservation of safe environment for
the existing and future generations, the basic question is how to use resources and the
environment in an optimal and sustainable manner. The Course aims at enabling the students
to understand such circumstances and be aware of the effects of economic activities on the
environment in policy making processes.
COURSE OBJECTIVES
The broad objective of this Course is to introduce students to natural resource and
environmental economics. At the end of the Course students are expected to know the
following main elements: the subject matter of resource and environmental economics, market
failure and the environment, natural resource economics, the links between development and
environment, environmental policy instruments to control pollution, environmental valuation
techniques and international environmental issues.
More specifically, students will be able to:
 Understand the general relationships between human activities and the environment
 Describe the role of property rights in resource use and allocation decisions
 Identify resource categories and their optimal and sustainable use
 Know optimal pollution control decisions and policy instruments
 Identify the different environmental valuation techniques
 Apply environmental valuation methods on the socioeconomic activities that will have an
influence on the environment (and resources)
 Make rational decisions in utilization of environmental resources and as such, they could
take their part in the activities of solving environmental problems
Course Contents
Course contents References
Chapter One: Introduction
1.1 Introduction to the subject matter  Perman et al. (chapter 1)

3hours 1.2 Interlinkage between the environment and  Tietenberg and Lewis
the economy (chapter 1)
80
1.3 The two views for the prospects in the
environment
Unit Two: Some issues on the environment and development
2.1 The environment and emerging

development issues  Perman et al. (chapter 2)
9hours 2.2 Population growth and the environment
2.3 Economic growth and the environment
2.4 Sustainability and economic policies
Unit Three: Efficiency, property rights, market failure and the environment
3.1. Efficiency, discounting & intergenerational  Tietenberg and Lewis
equity (chapter 2)
3.2. Property rights  Perman et al. (chapter 5)
9 hours 3.3. Externalities
3.4. Public goods
3.5. Common property resources
3.6. Correcting market failure
Unit Four: Natural resources
4.1 Classification of natural resources  Tietenberg and Lewis
4.2 Non renewable resources (chapters 5-12)
4.2-1 Theory of optimal depletion  Perman et al. (chapters 14,
4.2-2 Energy resources 15, 17, 18)
4.2-3 Minerals
4.3 Renewable resources
9 hours
4.3-1 Biological dimension of fisheries
4.3-2 Theory of optimal use of fisheries
4.3-3 Forest resources: Economic value of
forest resources; biological dimension of
forestry, and economic dimension of forest
resources
Unit Five: Economics of pollution control and environmental policy
5.1 Pollutant taxonomy  Tietenberg and Lewis
5.2 Efficient allocation of pollution (chapter 14)
5.3 Environmental policy instruments  Perman et al. (chapter 7)
5.3-1 Command and control (emission
standards)
6 hours
5.3-2 Emission charges
5.3-3 Transferable emission permits
5.3-4 Liability rules
5.3-5 Other instruments: voluntary
agreements, information disclosure
Unit Six: Valuation and cost-benefit analysis of environmental resources
6.1 Valuation of the environment  Perman et al. (chapters 11
6.1-1 Welfare foundations and 12)
6 hours 6.1-2 Dimensions of value Tietenberg and Lewis
6.1-3 Valuation methods (chapters 3 and 4)
6.2 Environmental analysis
81
Chapter Seven: International environmental issues
7.1. International environmental externalities Perman et al. (chapter 10);
and public goods and Tietenberg and Lewis
implications/solutions (chapter 16)
6 hours
7.2. International agreements
7.3. Economics of climate change
7.4 International trade and the environment
**NB: This course needs practical observation in a field so that the theoretical concepts are
verified through practical observation. The load for the course is indicated in the load
distribution of the course.
Course Policy
 All cheating cases will be reported to the department for appropriate decision.
that specific quiz
 Since field trips attached to the course are few in number, all students should attend the
field trips.

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
REFERENCES:
Perman, R., Y. Ma, J. McGilvray and M. Common, 2003. Natural Resource and Environmental
Economics, Third Edition, Pearson Education Limited, London.
Tietenberg T. and L. Lewis, 2015. Environmental and natural resource economics, 10th edition,
Pearson Education Limited, Boston.
82
COURSE NAME: LABOUR ECONOMICS
COURSE CODE: ECON-3101
Course Description:
This Course contains two courses: Labour Economics and Economics of Industry. The course
Labour Economics provide a good understanding of how different Labour market actors
interact under different set of condition to pursue their respective goals. It essentially helps to
understand how the modern Labour market functions and the socio-economic implication
thereof. It covers ranges of topics such as the individual and market labor supply & demand
decisions, determination of wage and employment level under different set of conditions,
effects of other non-wage factors on labor supply and demand, the labor market effects of
unions, the role of government in labor market, job security and occupational safety & health
standards, labor policies & regulations, and the functioning of labor market in developing
countries.
Course Objectives:
At the end of this module, the students will be able to:
 Understand the basic concepts, types and theories of labor market, the major actors in
labor market and diverse policy issues dealt with in labor economics,
 Understand the economic and non-economic(institutional) factor that shape the labour
supply and demand, and the effect of labor mobility on labor market equilibrium
outcomes,
 know how wage is determined in the labour market under different set of conditions;
understand the causes and measurements of wage structure, and theories of
compensating wage differentials,
 Know the labor market effects of unions under diverse labor market situations,
 Realize factors affecting Human Capital Investment Decisions of individuals, and grasp
the different man power planning approaches,
 Appreciate why labour market does not function perfectly; comprehend the role of
government in developing labour policies, and understand and analyze the different
approaches to regulate labor market,
83
COURSE CONTENT
Lecture
Course Content Reference materials
(hours)
Chapter One: Introduction
1.1. Labour economics: basic concepts, evolution and o Borjas G. (2008),

its role in Economics Ch.1 Pp 1-11
1.2. Issues discussed in labour economics
1.3. Labour & its peculiarities as factor o Ehrenberg and
1.4. Types of labour market Smith (10th 2012),
3-hours 1.4.1. Internal Labour Market Chs 1 &2
1.4.2. External Labour Market Pp 1-15; pp 25-58.
1.5. Theories of labour markets
1.5.1. Classical/Competitive/ Labour Market o McConnel and
Theories Brue (1989), Ch.
1.5.2. Segmentation Theories 16, pp. 449-460
Chapter Two: Labour Supply Theory
2.1. Measurement and the labour force participation
2.2. The Work-Leisure Decision Model
2.2.1. Workers preference
2.2.2. Budget constraint
o Borjas G. (2008),
2.2.3. The Hours of Work Decision
Ch. 2, 4 & 9
2.2.4. The effect of change in non-labour income
pp 21-68 ; 69-103;
on hours of work
pp 321-362
2.2.5. The effect of change in wage on hours of
work
o McConnel and
2.2.6. Reservation Wage(to work or not to work)
Brue (1989), pp.
14-76
2.3. The Labour Supply Curve & Elasticity of
9 hours Labour Supply
o Ehrenberg and
2.3.1. Individual Worker‟s Labour Supply Curve
Smith (10th 2012),
2.3.2. The Market Labour Supply Curve
Chs. 6, 7 &10;
2.3.3. Elasticity of Labour Supply
pp166-208; pp 209-
241; pp 325-344;
2.4. Policy Applications: The Labour Supply Implicatio
pp324-344
ns of Welfare Programs, Standard Working Hours
Requirement, Premium Wage & Straight Time
o Borjas G. (2008),
Equivalent Pay
Chs 4, and 9
2.5. Labour Mobility
2.5.1. Determinants of Labour Mobility
2.5.2. Labour Market Effects of Migration
Chapter Three: Labour Demand Theory
o Borjas G. (2008),
3.1. The production function Ch. 4 &5
6hours o McConnel and
3.2. The Demand for Labour in the Short-Run Brue (1989), Ch. 5
84
pp. 118-155
3.3. The Demand for Labour in the Long-Run o Ehrenberg & Smit
h (10th edn.2012),
3.4. Elasticity of Labour Demand Ch- 3 &4
3.5. Elasticity of Factor Substitution
3.6. Some Employment Policy Issues
Chapter Four: Wage Determination and Compensating Wage Differentials

4.1. Wage Determination and Resource Allocation
4.1.1. A perfectly Competitive Labour Market
o McConnel and
4.1.2. Monopoly in the Product Market
Brue (1989), Ch.
4.1.3. Monopsony
6, pp. 155-183,
4.2. Minimum Wage Theory
Ch. 7, pp 192-212,
4.2.1. The Competitive Model
Ch. 13, pp 374-
4.2.2. The Monopsony Model
382
4.3. Wage Structure and Compensating Wage
Differentials
o Borjas G. (2008),
9 hours 4.3.1. Wage Structure: Basic Facts
Ch. 5,,6,7, pp 163-
4.3.2. Causes and Measurements of Wage
212 and 213-242.
Inequality
4.3.3. Labor Market Discriminations
o Ehrenberg &
4.3.4. The Market for Risky Jobs
Smith (10th edn,
4.3.5. The Hedonic Wage Theory
2009),
4.3.6. Policy Applications
Chs. 8,12,13,15.
4.4. Critiques of Conventional Wage Theories, and
Alternative Pay Packages
Chapter Five: Unions and the Labor Market

5.1. Union Structure and Membership
5.2. Constraints on the Achievements of Union
o Ehrenberg &
Objectives
Smith (10th edn,
5.3. The activities and Tools for Collective
2009),
Bargaining
3hours Ch-13,pp 445-491
5.4. The Effects of Union
5.4.1. Effects of Union on Wage
o Borjas G. (2008),
5.4.2. Effects of Union on Total Compensation
Ch.11, pp 410-452
5.4.3. Effects of Union on Employment
5.4.4. Effects of Union on Productivity and Profits
Chapter Six: Investment in Human Capital and Manpower planning

o Borjas G. (2008),
6.1. The Basic Model of Human Capital
Ch. 7, pp 243-292
6.2. The Wage-Gap among Workers
6hours 6.3. On the Job Trainings o Ehrenberg &Smith
6.3.1. General Training (10th edn. 2012),
85
6.3.2. Specific Training Ch-9.
6.4. Manpower Planning Techniques
Chapter Seven: Labour Policy
7.1. The Role of Government in the Labour Market;
and Labor Market Legislations
7.2. Job/Employment Security o Bellante and
7.3. Social Security and other Welfare Payments, and Jackson (1983), Ch.
6hours
their effect on labour market outcomes 15
7.4. Occupational Safety and Health Standards,
7.5. Occupational Licensing
Chapter Eight: The Working of Labour Market and Employment Problems in

Developing Countries
8.1. The Workings of Urban & Rural Labour Markets
in Developing Economies o Galenson(ed.)
8.2. The Employment Challenges in LDCs (1971)
6hours
8.3. Employment Policy and Strategy of Developing
Countries with Particular Reference to Ethiopia
Course Policy
that specific quiz
 Lecture Method
 In-class problem solving
 Group Work
 Assignment
86
Assessment Methods
schedule.

Assignment (Individual/group) 20%
Quizzes/Tests/(maximum of 10% each) 30%
Final Exam 50%
Total 100%
REFERENCES:
1. *George J. Borjas (2008), Labour Economics, 4th Edn, McGraw-Hill Companies, Inc.
2. *Ronald G. Ehrenberg and Robert S. Smith (2009), Modern Labour Economics: Theory
and Public Policy, 10th Edition, Pearson Education, Inc.
3. *Campbell R. McConnel and Stanly L. Brue (1989), Contemporary Labour Economics,
McGraw-Hill.
4. G.W. Taylor and F.C. Pierson (1981), New Concepts in Wage Determination.
As an additional material, lecture note and problems will be given during class; some
copies, handouts, and review question will be distributed additionally as required.
5. P.Bairoch (1973), Urban Unemployment in Developing Countries, ILO
6. Richard Jolly and C. Coclough (1972), “African Manpower Plans: an Evaluation”.
International Labour Review, Vol. 106
7. S. Kannapan (1977), Studies of Urban Labour Market Behavior in Developing Countries,
ILO
8. Bruce E. Kaufman and Julie L. Hotchkiss (2003), The Economics of Labour Markets,
Sixth Edition, Thomson South-Western.
9. OECD (undated), Manpower Planning Approach, memo.
10. Lioyd G. Reynolds, Stanley H, Masters, and Colletta H. Moser (1991), Labour Economics
and Labour Relations, Tenth Edition, Prentice-Hall.
11. Guy Standing and Victor Tokmna (1989), Towards Social Adjustment: Labour Market
Issues in Structural Adjustment, ILO.
12. Tesfaye Teklu (1976), “The Implication of Manpower Approaches to Educational
Planning in Ethiopia”
87
……………………………………………………………………………………………………………..
COURSE NAME: ECONOMICS OF INDUSTRY

COURSE CODE: ECON 3102
Industrial Economic is the study of firms, industries and markets. It looks at firms of all size-
from local corner shops to multinational giants and it considers all sectors/ whole ranges of
industries, such as textile, electricity generation, car production and restaurants etc. It helps to
understand how and why ownership and control affect the goal and performance of firms, why
firms concentrate into certain industries and the different features of firm conduct. Besides, it
helps to grasp the reasons why firms differentiate and diversify their products, the motive for
firms‟ vertical and/or horizontal integration and merger, their reason for and extent of
investment in research and development (R&D) and advertisements, the determinants of firms‟
performance and the measurements thereof, and the rationale for market power and its pros
and cons. Furthermore, the course helps to grasp the timing and extent of government
intervention and its effects on firms‟ performance; and also, to comprehend, review and analyze
the core elements of industrial policy in general and the industrial policies and strategies of
Ethiopia in particular.
Objective of the Course:
 Familiarize with diverse theories of firms, and how the firm grows according to different
theories,
 Acquire the skill to measure the market power/market performance with empirical
work,
 Distinguish different pricing strategies and its effects on the structure and performance of
firms,
 Understand the rationale for patent protection, and appreciate the motive and rate of
technological advancement,
 Comprehended and be able to analyze and explain industrial policy which comprises the
need for industrialization, state or private control, monopoly and mergers policy and
promoting small industries.
COURSE CONTENT
Lecture Reference
Course Content
Hours materials
Chapter One: Concept, Evolution and Approaches of Barthwal ,
Industrial economics Chapters. 1, page 2-
1.1. Industrial economics: Definition and Its Link with Other 6, chapter 4 page
Branches of Economics 49-70
3 Hours 1.2. The Evolution of Industrial Economics*
1.3. Approaches of Industrial Economics Barthwal , chapter
1.3.1. The Structure-Conduct-Performance 4, page 49-70,
1.3.2. The Chicago School of Thought
1.3.3. Institutional Economics Carlton, D.W. and
88
J.M. Perloff,
Chapters. 1§ 9 page
2 -10, 331-369
Chapter Two: Agent, Ownership, Control and Goals of

Firms Barthwal , Chapter.
2.1. Legal Forms of Businesses 3, page 35-64;
2.2. Organization, Ownership, Control and Goal of Firms Chapter 16, pages
2.2.1.Managerial Theory of the Firm 453-472
2.2.2. Principal-Agent-Theory
8 Hours 2.2.3. Transaction Cost Theory R.stead,P.Curwen
2.3. Firm Growth and K.Lawler Page
2.3.1. The Life Cycle of Firms No.64-81
2.3.2. Theories of Firm Growth
2.3.2.1 Downie‟s Theory
2.3.2.2. Penrose‟s Theory
2.3.2.3. Mari‟s Theory
Chapter Three: Firm Concentration and Industry Structure
3.1. Market Concentration: Concept
3.2. Nature and Dimensions of Concentration Carlton, D.W. and
3.2.1. Economic Wide J.M. Perloff,
3.2.2. Geographic Chapter 8, pages
3.2.3. Industry 236-264,
3.2.4. Goods (Substitutable/Complementary)
9 Hours 3.3. Measures of Concentration Church and Ware,
3.3.1. Concentration Ratio Chapter 12, 423-450
3.3.2. Hirschman-Herfindahl Index
3.3.3. Entropy Index Barthwal , Chapter
3.3.4. Dispersion 7, Pages 185-218
3.3.5. Learner Index
3.3.6. Determinants of Concentration
6 Hours Chapter Four: Measurement, determinant, Prone and Cons of Market power
89
4.1. Measurement of Market power
4.2. Market Power and Pricing Behavior
4.3. Sources of market power and Entry Deterrence
4.3.1. Economies of scale & economies of scope and
seller concentration
4.3.2. Government restrictions on entry
4.3.3. Structural characteristics and strategic behavior
Carlton, D.W. and
by incumbents (Limit Pricing, dominant firm
J.M. Perloff,
and biometric pricing);
Chapter 4, pages
4.3.4. Other forms of entry deterrence
87-106
4.3.5. Effect of entry in the case of dominant firm
4.4. Prone and Cons of Market power
Church and Ware
4.4.1. The advantage of being large
4.4.1.1. Economies of scale Chapter, 109-150
4.4.1.2. R&D and Technological Progress
4.4.2. The disadvantage of market power
4.4.2.1. Consumer and producer surplus and
dead-weight loss
4.4.2.2. X-inefficiency
4.4.2.3. Rent Seeking
4.5. Market Power and Public Policy
Chapter Five: Consolidation of Market Power: Integration, Merger
&Diversification
5.1. Vertical Integration and Vertical Restriction R.R.Barthwal
5.2. Horizontal Integration and Entry Deterrence Chapter 8, Pages
5.3. Merger and Takeover 219-245
5.4. Diversification Carlton, D.W. and
J.M. Perloff,
6 Hours
Chapter 12, 377-
416,
Church and Ware

Chapter 22, 683-696
and Page 23, pages
715-741
Chapter Six: Advertisement, Research &Development and R.R.Barthwal,
Technology Progress chapter 9, 246-278;
6.1. Information Asymmetry and Advertisement chapter 14, pages
6.1.1. Advertisement as entry deterrence 416-431;
6.1.2. Optimal Advertisement Carlton, D.W. and
6 Hours 6.1.3. Welfare Implications of Advertisement J.M. Perloff,
6.2 Technological Progress Chapter 14, pages
6.2.1. Research and Development 451-473
6.2.2. Invention, Innovation and Diffusion Church and Ware,
6.2.3. Intellectual Property Right and the Incentive for Chapters 17 & 18,
Investment in Technological Progress 561-593
90
Chapter Seven: Concepts of Firm Performance Measures
7.1. Profitability R.R.Barthwal
7.2. Partial and Total Factor Productivity Chapter 2, Pages
3 Hours
7.3. Technical, Allocative and Economic Efficiency 12-34; Chapter 10,
276-296; Chapter
19, pages 518-535
Chapter Eight: Firm Location
8.1. Determinants of Firm Location
3 Hours 8.2. Alfred Weber's Theory of Industrial Location R.R.Barthwal 17,
8.3. Post-Alfred‟s Weber‟s Theory of Industrial Location Pages 474-495
8.4. Industrial Cluster/Parks: Prone and Cons
Chapter Nine: Industrial Policy
R.R.Barthwal 18,
9.1. Industrial Policy: Concept and Basic Elements
Pages 497-501
9.2. Arguments For and Against Industrial Policy
9.2.1. The Neo-Liberal View
Packs and Saggi
9.2.2. The Structuralist‟s and Developmentalist View
(2006);
3 Hours 9.3. Approaches/Scope of Government Intervention (Free
Ethiopian policy
Market, Supportive, Planning and Command)
and strategy
9.4. Seminar on Ethiopian Industrial Policy (Industrial
documents and
Strategy, SME strategy, Competition Policy, etc.)
other policy related
materials
*This course needs practical exposure on the field so as to corroborate theoretical

issues with practice on the ground.
COURSE POLICY
 No student is allowed to enter after class has started.
 Duplication of assignment is strictly forbidden. It entails serious penalty.
 Cheating during examination sessions will result in a minimum of “F” Grade. Cheating
in quizzes and tests is subjected to a zero mark. All cheating cases will be reported to the
department for further considerations.
 Students must switch off their cell phones while they are attending lectures and during
quizzes, tests or examinations.
 Students must attend 80% of the class (lecture hours) of the course. A student who fails
to attend 80% of the class will not sit for the final examination.
 A student who misses a quiz without convincing evidence will earn a grade of zero
marks in that specific quiz or test.
 Instructors in consultation with the department and administration and finance office
will determine the field site and duration. Field trips must be attended by all students.
Students are required to submit field reports.
91
The delivery Method shall be student-centred. Students are expected to actively participate in
the class and also group assignments. Specifically the course will be delivered through the
following methods:
 Lectures
 In-class problem solving with active participation of students
 Assignments (Individual/group)
Assessment Methods
Student evaluation in this Course consists of both formative and cumulative assessments
including quizzes, tests, assignments and final examinations. Points will be allocated
according to the following grading schedule.
Assignment 20%
(Individual/Group)
Quizzes/Tests 30%
Final Examination 50%
REFERENCES:
Core References
 Barthwal , R.R. (1984), “Industrial Economics: An Introductory Text Book”,
Wiley Eastern Limited, BNew Delhi.
 Carlton, D.W and J.M. Perlof (2005), “Modern Industrial Organization”, 4th
edition, Pearson Addison Wesely.
 Church, J. and R. Ware (2000), “Industrial Organization: A Strategic Approach”,
Mc Graw Hill.
 Ferguson, P.R. and G.J. Ferguson. “Industrial Economics: Issues and
Perspectives.
Additional Readings
 Hay, A. Donald and Derek, K. Morris (1991); Industrial Economics and
Organization: Theory and Evidence, Oxford University Press.
 Martin, S. (1994) Industrial Economics. (Englewood Cliffs, N.J: Prentice Halll.
 Wade, R.H. “The Role of Industrial Policy in developing Countries”, Rethinking
Development Strategies after the Financial Crises – Volume I: Making the Case
for Policy Space”.
 Pack, H. and Saggi, K. (2006), The Case for Industrial Policy: A Critical Survey,
World Bank Policy Research, WP 3838.
92
Course Name: Economics of Agriculture
This Course contains two courses: Economics of Agriculture and Agriculture &Rural
development. The first part of the module, Economics of Agriculture, deals with feature of
traditional agriculture, agricultural development theory, supply response in agriculture, the
theory of technological change and innovation, agricultural finance and main features of rural
credit markets, and analysis of the allocation behaviour of peasant operators in developing
countries.
Course Objective
The objective the Course is to
 Provide students with an exposure to the major problems, theories, models and policies of
agricultural development.
 Acquaint students with preliminary knowledge of economic principles of agricultural
production and response behavior of smallholder operators in developing countries..
 to equip students with the required theoretical tools of economic analysis relevant to the
problems of agriculture in developing countries.
 Equip students with relevant theoretical and practical issues related to technological
change, and adoption and diffusion of agricultural technologies.
1. Introduction
1.1 Definition and scope of economics of agriculture
1.2 Specific feature of agricultural production
1.3 Main attributes of traditional agriculture
1.4 Agricultural systems :
5 Hrs
1.4.1 Low external input agriculture (shifting
cultivation, pastoralism, peasant agriculture)
1.4.2 High external input agriculture (the case of
Industrial & green revolution agriculture)
2. Economics of Agricultural Development
Changing views/perspectives of the role of agriculture since
1950
2.2, The classic role of agriculture in Economic Development
2.3. Agricultural transformation & development
 The need for agricultural transformation
7 Hours
 Phases of agricultural transformation
2.4. Conditions for agricultural development
 Technology and innovation
 Conducive institutional and pricing policies
 Education
3. Supply response in agriculture
3.1. The conventional supply response model
9 hours
3.2. The modified supply response in the context of agriculture
93
3.3. The Cobweb model
3.4. Hypothesis about supply response in peasant agriculture
4. Technical change in agriculture
4.1. Source of technical change in agriculture
4.2. Characteristics of technical change
4.3. Adoption and diffusion of technologies
9 hours
4.5. The economics of technical change
4.6. Induced innovation
4.6. Adoption of new varieties
5. Agricultural marketing
5.1 Marketing characteristics
5.2 Functions of agricultural marketing
5 Hours 5.3 marketing agents and enterprises
5.4 Integration and diversification of marketing
5.5 Transaction costs and marketing efficiency
6. Agricultural Finance & Rural credit markets
6.1 Why do people demand credit in rural areas
4 Hours 6.2 Sources of rural credit
6.3 Characteristics of rural credit markets
7. Uncertainty and farm Decision making
7.1 Sources of Uncertainty
7.2 Decision Making under Uncertainty
7.3 Mechanisms of Mitigating risk and uncertainty
9 Hours
 Risk-averse peasant
 Drudgery-averse peasant
 The Sharecropping peasant
Course Policy
that specific quiz
REFERENCES:
1. Ellis, F. (1992), Agricultural Policies in Developing Countries, Cambridge University
Press
2. Colman and Young, Principles of Agricultural Economics (1988), Cambridge University
Press
3. Ghatak and Ingersent (1996), Agriculture and Economic Development, Harvester Prss
94
4. Dejene Aredo (2011), Agricultural Development: Theory and Practice; Aster Nega
Publishing Enterprise
5. Gail L.C, C.W. Jensen and Douglas D. 1997. Agricultural Economics and Agribusiness.
7th Edition
6. Harold G. Halcrow. 1984. Agricultural Policy Analysis.
7. Holmberg, J. 1992. Making Development Sustainable. International Institute for
Environment and Development
8. Rao, P.K. 2000. Sustainable Development. Economics and Policy. Black well publishers
Inc.
9. Reports on the Ethiopian Economy. Ethiopian Economic Association (Different
Volumes)
10. Todaro, M.P. and S.C. Smith 2003. Economic Development, 8th Edition. Pearson:
Addison Wesley.
11. Workneh Negatu, Legese Dadi and Abebe Haile Gebriel (eds) 2003. Agricultural Policy
in Ethiopia's Economic Development: Scope, Issues and Prospects.
95
Course Name: Rural Development
The second part of the module, Agriculture and Rural development will consider the process of
rural development from both theoretical and practical point of view. Theories related to
definition of rural development, to measurement of rural development and to new institutional
economics approach to rural development will be covered in this course. Moreover, the
application of such theories will be analyzed from the perspective of Indian and Ethiopian
experience. Finally, the rural development policy and strategy of Ethiopia will be examined
from both theoretical and practical point of view.
Course Objective:
 Enable students to clearly examine the rural development policy of the country and
propose possible and innovative solutions to challenges that could be faced in the process.
 Introduce students with peasant risk aversion and mitigation mechanisms under
conditions of uncertainty
 Enable students acquire the knowledge and practices of agricultural marketing, financing
and the nature of rural credit markets.
 Acquaint students with theories and models of rural development
 help students understand the role and contributions of rural institutions
Course content
1. Introduction
1.1. Concept of rural development.
1.2. Agricultural vs rural development
1.3. Socio-economic and Cultural Factors in Rural Development
1.3.1. Population and Development
1.3.2. Gender and Development
6 Hrs 1.4. Elements of rural development
1.4.1. From basic need dimension
1.4.2. From economic welfare dimension
1.4.3. From capability dimension
1.5. The Role of Agricultural Research and Extension in Rural
Development
2. Institutions for Rural Development
2.1. Definition and concepts of institution
2.2. Demand and supply of institutions
2.3. Market as institution and rural development
12 Hrs
2.4. Review of market outcome under its restricted assumptions
2.5. Institutions to deal with market failure
2.5.1. The need for government intervention in agriculture
96
and rural development
2.6. Market and State failures
2.6.1. Traditional market failures
2.6.2. Market failures related to imperfect information and
missing markets
2.7. State as complementary institution to market
2.8. The role of state in rural and agricultural development
2.9. State failure to coordinate rural development
2.10. Institutional innovation to deal with market and state failure
in rural development
2.10.1. Institutions to deal with market failure in rural
development
2.10.2. Institutions to deal with state failure in rural
development
2.10.3. Local institutional capital and community
development
2.11. The institution of property right
3. Theories, models and approaches to rural development
3.1. Lewis‟s model of development with unlimited supply of
labor
3.2. Human capital centered development theories
3.3. Uni modal theory (approach)
3.4. Bi modal theory (approach)
3.5. Integrated rural development
14 Hrs 3.6. Models of Agricultural Development
3.6.1. The frontier model
3.6.2. The conservation model
3.6.3. The urban industrial impact model
3.6.4. The diffusion model
3.6.5. The high pay off input model
3.6.6. The Indian green revolution experience
4. Strategies and polices of agricultural and rural development
4.1. Strategies of agricultural and rural development
4.1.1. Growth oriented
4.1.2. Welfare Oriented
4.1.3. Responsive strategies
4.1.4. Holistic
4.1.5. Integrated strategies
4.2. Polices of agricultural and rural development
9 Hrs
4.2.1. Agricultural price policy
4.2.2. Input policy
4.2.3. Marketing policy
4.2.4. Credit policy
4.2.5. Land tenure policy
4.2.6. Food security policy
5. The Rural Development policies and strategy of Ethiopia
97
5.1. Goals of the rural development policy
5.2. ADLI within uni modal approach and reflection on it
5.3. Policy with in agriculture
5.3.1. Land policy
5.3.2. Labor policy
5.3.3. Policy on technology
7 Hrs
5.3.4. Settlement policy
5.3.5. Integrated approach to rural development
5.3.6. Reflection on agricultural policy
5.3.7. Marketing policy and reflection on it
5.3.8. Policies on NGO‟s and community
development, and reflection on it
Course Policy
that specific quiz
of the class. Specifically the course will be delivered through the following methods: Lecture
Method , In-class problem solving, Group Work and Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
References:
Text Books (there are no specific text book for this course. So these are books which are used
often in the course):
1 Katar Singh (1999), Rural Development: Principles, Policies and Management, 2nd Ed. Saga
Publications, New Delhi
98
2 Frank Ellis (1992) agricultural policies in developing countries, Cambridge University Press,
Cambridge
3 Yujiro Hayami, (1997) Development economics: From poverty to wealth of nations,
Clarendon Press, Oxford
4 Hendrik Van Den Berg (2001), Economic Growth and Development, McGraw – Hill Higher
Education
5 Michael P.Todaro (2000), Economic Development, Addison-Wesley, Amsterdam.
6 Meier, Gerald (1995), Leading issues in Economic development, Sixth edition, Oxford
Univeristy press Oxford - New York
Additional readings: All development books are your additional reference but the following
books will be very use full in specific chapters
1 Gopal Lal Jain (1997), Rural Development, Mangal Deep Publications Jaipur India.
2 Tom Tietenberg (2003), Environmental and natural resource economics, 6th ed., Pearson
Education Inc.
3 Joseph E. Stiglitz (2001) “information and change in paradigm in economics”, Nobel prize
lecture, December 8, 2001
4 Addisalem Belema (2003), Economic development and democracy in Ethiopia, Dissertation
in Erasmus University, Rotterdam
5 Todaro, Chaelp (2000), Economic Development, fifth edition, Pearson education Limited
Edinburgh Gate, Harlow –England
6 Hayami, Yujiro (1997), Development Economics, Oxford University press, Oxford - New
York
99
COURSE TITLE : Monetary economics
COURSE CODE Econ 4121
Monetary Economics is intended to equip students with basic knowledge of the operation of
financial system, measurement of money; rationale for studying demand for money, existence
and stably of demand for money, Approaches to demand and supply of money and money
creation process, approaches to the interactions between monetary and real sectors: The
transmission mechanism, effectiveness of monetary and fiscal policies; Money, Inflation and
Interest rates; Monetary policy--objectives, targets and instruments; theories of crises, Monetary
policy in developing countries: implications of monetary theories and developing countries,
direct and indirect approaches to monetary policy; Monetary policy in Ethiopia.
Course Objective
 To enable students to understand the evolution of money in historical context
 To equip students with the knowledge to explain the rationale for the existence and
economic role of Banks and non-Bank Financial institutions
 To enable students understand and demonstrate the money supply process, monetary
base, the determinants of money supply, how the behaviour of the general public and
the banking affect the money creation process
 To demonstrate to learners theories of Money, money demand and its determinants,
 To enable students understand and assess policy issues in public finance.
 To make students aware of the different schools of thought in public finance.
 To enable students understand and assess 'cost benefit' analyses of publicexpenditure
programmes.
Chapter 1: Money and Monetary Theory

1.1 Meaning and functions of money
3hrs 1.2. Measurement of money
1.3. Origin and Evolution of the payment system
Chapter 2: An overview of the Financial System
2.1. Functions and structures of Financial Markets
2.2 Financial Instruments
6 Hours
2.3.Theory of financial intermediation and Financial
intermediaries
Chapter 3: The demand for Money and other assets
3.1 Rationale for studying demand for money: existence and
stability of demand for money
3.2. Quantity theory of money
3;2. Theory of interest rate/the term structure of interest rates
11hrs 3.2. Liquidity preference theory
3.3. Post Keynesians developments in monetary theory
3.4 The Interest-Elasticity of Transactions Demand forCash
(Inventory theory and Monetary Theory)
3.5.Friedman‟s Quantity Theory of Money-a Restatement
100
3.6. Empirical evidence on demand for money
Chapter 4: the Money supply Process
4.1. Players in the Money Supply Process
4.2. Central Bank Balance Sheet and Control of the monetary base
4.3. Multiple Deposit Creation
12hrs
4.4. Monetary Supply Model and Money Multiplier
4.5. Over view of the Money Supply Process, Endogeneity of
money supply
Chapter 5: Central Banking and Monetary Policy
1.1 Functions, Structure and Independence of Central Banks
1.2 Targets, Indicators, Tools, goals and instruments of Monetary
Policy
1.3 Lags in Monetary economics
1.4 Conduct of Monetary Policy
10 hrs 1.5 Goals of Monetary Policy
1.6 Central Bank Strategy
1.7 Monetary targeting and Empirical Evidence
1.8 Introducing money into behavioral and growth models
1.9 Transmission Mechanism of Monetary Policy
1.10 Financial Crisis
Chapter 6: Monetary Policy in Ethiopia (5hrs)
6.1 Powers and Functions of the National Bank of Ethiopia
6 hours 6.2 Conduct of Monetary Policy in Ethiopia
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
Course Policy
101
that specific quiz
Major Texts:
Mishkin, F. S. (1986, 2005), The Economics of Money, Banking, and Financial Markets, Little
Brown and Company, Boston.
Goodhart, Charles (1992), Money, Information and Uncertainty, 2nd edition, MacMillan.
Supplementary reading materials/references:
Arestis, P. (Ed) (1988), Post-Keynesian Monetary Economics, Edward Elgar.
Barro, Robert J. and David B. Gordon (1983), Rues, Discretion and Reputation in a Model
of Monetary Policy, Journal of Monetary Economics 12: 101-121.
Barry, J. and O. P. Brekk (1989), Monetary Control Procedures and Financial Reform:
Approaches, Issues, and Recent Experiences in Developing Countries, IMF
Working Paper No. 48 (June), Washington, D. C.
Bascom, W. O. (1994), The Economics of Financial Reform in Developing Countries,
Baumol, W. J. (1952), The Transactions Demand for Cash: An Inventory Theoretic Approach,
American Economic Review, vol. 61, pp. 82-93, March).
Bird, Graham (1982), The International Monetary System and Less Developed Countries, 2nd
edition Mcmillan.
Bomhoff, E. (1980), Inflation, the Quantity Theory and Rational Expectations, North
Holland.
Caprio G. and P. Honohan (eds.) (1991), Monetary Policy Instruments for Developing
Countries: A World Bank Symposium, World Bank.
Coates, W. R. and D. R. Khatekhate, (eds.) (1980), Money and Monetary Policy in Less
Developed Countries,PergamonPress.
Dowd, K. and M. Lweis (eds.) (1992), Current Issues in Financial and Monetary Economics,
MacMillan, London.
Dennis, G. (1981), Monetary Economics, Longman.
Fisher D. (1978), Monetary Theory and the Demand for Money, M. R.
Friedman, Benjamin (1977), The In-efficiency of Short-run Monetary Targets for Monetary
Policy, Brookings Papers on Economic Activity, 2:293-346.
Friedman, Milton (1968), The role of Monetary Policy, The American Economic Review, vol. LVIII,
No. 1:1-17.
Friedman, M. (1969), the Optimum Quantity of Money, Aldine,.
Friedman, Benjamin (1977), The In-efficiency of Short-run Monetary Targets for Monetary
Policy, Brookings Papers on Economic Activity, 2:293-346.
Fry, M. (1995), Money, Interest Rates and Banking in Economic Development, Johns Hopkins
University Press.
Gemech, F. (1993), The Demand for Money in a Financially Repressed Economy: the Case of
Ethiopia, University of Paisley Economics and Management Working Papers No. 56 (May).
102
Ghatak, S. (1981), Monetary Economics in Less Developed Countries, MacMillan.
Goodhart, Charles (1989), The Conduct of Monetary Policy, The Economic Journal, 99 (June),:
293-346.
Goodhart, Charles (1984), Monetary Theory and Practice: the UK Experience, MacMillan,
London, chapters IV, V and VI.
Harris, Lawrens (1985), Monetary Theory, McGraw-Hill, New York.
Hess, Alan C. (1995), Portfolio Theory, Transaction Costs, and the Demand for Money,
Journal of Money, Credit and Banking, Vol. 27, No. 4 (November): 1015-1032.
Hosek, W. and F. Zahn (1977), Monetary Theory, Policy and Financial Markets, McGraw-Hill.
Hudson, J. (1982), Inflation: A Theoretical Survey and Synthesis, Allen & Unwin.
Humphrey, T. and R. Keleher (1982), Monetary Approach to the Balance of Payments,
Exchange Rate and World Inflation, Praeger.
Laidler, David (1978), Money and Money Income: An Essay on the Transmission Mechanism,
Journal of Monetary Economics 4: 151-191.
Laidler, David (1984), The Buffer Stock Notion in Monetary Economics, The Economic Journal,
Vol. 94: 17-35.
Laidler, D. (1985), The Demand for money: Theories, Evidence, and Problems, 3rd edition,
Harper & Row, New York.
Laidler, d. (1990), Taking Money seriously and Other Essays, Philip Allan, New York.
Levacic, R. and A. Rebmann (1982), Macroeconomics: an Introduction to Keynesian-Neo-
classical Controversies, 2nd edition, Macmillan.
McCallum, T. B. (1989), Monetary economics: Theory and Policy, MacMillan, New York.
Milbourne, Ross (1987), Re-Examining the Buffer-Stock Model of Money, TheEconomic Journal,
97 (Conference): 130-142.
Miller, Merton H. and D. Orr (1966) A Model of the Demand for Money by Firms, Quarterly
Journal of Economics, Vol. 80, No. 3 (August): 413-435.
Miller, Merton H. and D. Orr (1968), The Demand for Money by firms:Extensions of Analytic
Results, The Journal of Finance, Vol. XXIII, No. 5: 735-759.
Montiel, Peter J. (1991), The Transmission Mechanism for Monetary Policy in Developing
Countries, IMF Staff Paper, Vol. 38, No. 1 (March): 83-108.
Roe, Alan (1997), From Direct to Indirect Monetary Control in Sub-Saharan Africa, Journal of
African Economies, Vol. 6, No. 1: 212-264.
O‟Connell, Stephen A. (1997), Comments on „From Direct to Indirect Monetary Control in Sub-
Saharan Africa‟, Journal of African Economies, Vol. 6, No. 1: ,265-271.
Page, s. (ed.) (1993), Monetary Policy in Developing Countries, Routridge, London.
Sargent, Thomas J. and N. Wallace (1975), “Rational” Expectations, the Optimal Monetary
Instrument, and the Optimal Money Supply rule, Journal of Political Economy, Vol.
83, No. 2: 241-254.
Sethi, T. (1981), Monetary Economics, S. Chand.
Sprenkle, C. (1969), The Uselessness of Transactions Demand Models, Journal of Finance, 24(5)
(December).
Stevenson, Andrew, V. Muscatelli, and M. Gregory (1988), Macroeconomic Theory and
Stabilisation Policy, Philip Allan, New York, PP. 138-148.
Stiglitz, Joseph E. (1997), Principles of Macroeconomics, W. W. Norton & Company, New
York.
Tobin, James (1981), Money and Finance in the Macroeconomic Process, Journal of Money,
Credit and Banking, Vol. 14, No. 2 (Ma): 171-204 (Nobel Lecture)
103
........ (1958), in “Liquidity Preference as Behavior Towards Risk”, Review of Economic Studies,
vol. 25, pp. 65-86, February).
......... (1956), in “The Interest Elasticity of Transactions Demand for Cash”, Review of
Economics and Statistics, vol. 38, pp. 241-247 (August).
Materials on Ethiopia:
Ageba G. (1998), Financial Liberalisation in Ethiopia: A Firm Level Analysis of Credit
Allocation, Financial Constraints and Investment in Ethiopia, Ph.D. Dissertation,
University of Oxford, Chapter 2.
Ageba, G. 91997), An analysis of the financial sector and credit policies of the Derg period and
Post Derg Reforms, Ethiopian Journal of Economics, vol. VI, no. 1.
Befekadu Degefe (198?), the 1976 Monetary and Banking Proclamation: Innovations and
Implications, Journal of Ethiopian Law, Vol. 12: 153-165.
Giday B. (1991), Axumite Coins: Currency and Banking in Ethiopia, Addis Ababa.
Duggar, J. (1966), Monetary Developments in Ethiopia since 1931, Ethiopian Observer, Vol. X,
No. 3: 206-215.
Gemech, F. (1993), The Demand for Money in a Financially Repressed Economy: The Case of
Ethiopia, University of Paisley Economics and Management Working Papers No. 56
Taffara Degefe (1973), A Guide to Services, Addis Ababa.
Monetary and Banking Proclamations Nos. 99 & 100 of 1976; Nos. 83 and 84 of 1994;
National Bank of Ethiopia Directives: NBE/ INT1/1994; NBE/ INT/2/1994;
NBE/ INT3/1994; NBE/ INT4/1994;
National Bank of Ethiopia, Annual Reports and Quarterly Bulletins.
104
Course Title: Public Finance
Course Objective
Public finance deals with the financial aspects of the government and the possible role of the
state in a market economy through the use of lecture, directed reading and term paper
(seminar) preparation and presentation. The general objective of the course is to acquaint
students with various concepts, theories and realities of public finance such as the rationale for
state in the economy, the sources and types of revenue for the public, taxing system and types
of taxes, characteristics of an efficient taxing system, criteria for evaluating public expenditure,
theories of public expenditure and its impact on the economy, significance , objective and types
of public budget, deficit financing and its various means, and some relevant public finance
issues in the Ethiopian context.
Upon successful completion of this course the student will be able to;
 Provide arguments for the case of government intervention in a modern economy.

 Identify both market failure and government failure and explain the causes of each
 Conceptualize the principles of taxation, tax exemption, tax incidence;
 Identify externalities, their impacts, and evaluate the relative merits of various public
sector interventions designed to resolve the associated issues.
 Explain and critically evaluate the concepts of equity and efficiency as a basis for
decision making in taxation and public expenditure.
 Explain the planning and budgeting process in developing countries
 Distinguish between tax avoidance and tax evasion and articulate the considerations
relevant to the design of public policy to minimize tax evasion
 Analyse specific policy issues in the area of public expenditure and taxation from the
perspectives of both traditional public finance and public choice
 Describe the rationale for fiscal federalism and Evaluate the implementation of fiscal
federalism at different levels of government
 Discuss fiscal federalism and intergovernmental transfer systems in Ethiopia.
Course Contents
Chapter 1.Nature and Scope of Public Finance
1.1. Definition and Scope of Public Finance
1.2. The Rationale of State Intervention
3Hrs 1.3. The Nature of State Intervention
1.4. Public Finance and Public Sector
1.5. Significance of Public Finance
Chapter Two: Welfare Economics and Public Finance
2.1. A Brief Review of Welfare Economics
2.2. Market, Pareto efficiency and Social justice
5Hrs
2.1. The Efficiency of Competitive Markets
2.3. Perfect Competition and Pareto Optimality
105
2.4. Perfect Competition and General Economic Efficiency
2.5. Market Failure, Externalities and Public Goods
2.6. Market failure and income disparities
Chapter Three: Public Revenue and the Economics of Taxation
3.1. Sources of government revenue
3.1.1. Tax and non tax revenues
3.1.2. Alternative means of government finance
3.2. Basic concepts of taxation
3.3. Purposes of Taxation
3.4. Features of Sound Taxation
3.5. . Principles of Taxation
3.5.1. The Benefit Principle of Taxation
3.5.2. Ability to pay Principle of Taxation
3.6. Equity in the distribution of tax burden
3.7.
Taxation, prices, efficiency and income distribution
3.8. Concepts of tax incidence and Shifting
3.8.1. Tax Evasion and Tax Avoidance
3.9.
Taxation in Ethiopia
3.9.1. Primary tax bases
3.9.2. Exemption, income brackets and marginal tax rate
3.9.3. Tax revenue computation and tax structure
3.9.4. Proclamation Related Tax
9Hrs
3.9.5. Federal and Regional Government Taxation and Tax
Sharing
3.9.6. Tax Reform in Ethiopia Since 1991
3.9.7. Tax Administration in Ethiopia
3.1. Sources of government revenue
3.1.1. Tax and non tax revenues
3.1.2. Alternative means of government finance
3.2. Basic concepts of taxation
3.3. Purposes of Taxation
3.4. Features of Sound Taxation
3.5. . Principles of Taxation
3.5.1. The Benefit Principle of Taxation
3.5.2. Ability to pay Principle of Taxation
3.6. Equity in the distribution of tax burden
3.7.Taxation, prices, efficiency and income distribution
3.8. Concepts of tax incidence and Shifting
3.8.1. Tax Evasion and Tax Avoidance
3.9.
Taxation in Ethiopia
3.9.1. Primary tax bases
106
3.9.2. Exemption, income brackets and marginal tax rate
3.9.3. Tax revenue computation and tax structure
3.9.4. Proclamation Related Tax
3.9.5. Federal and Regional Government Taxation and Tax
Sharing
3.9.6. Tax Reform in Ethiopia Since 1991
3.9.7. Tax Administration in Ethiopia
Chapter Four: Public Expenditure
4.1. Meaning and nature of public expenditure
4.2. Planning and budgeting of public expenditure
4.3. Techniques used for evaluating public expenditures
4.3.1. Cost benefit analysis and cost effectiveness
4.4. Public expenditure: Canons, Theories and Accountability
7Hrs
4.4.1. Canon of public expenditure
4.4.2. Theories of public expenditure
4.4.3. Control and Accountability of Public Expenditure
4.5. Macroeconomic Effects of Public Expenditure
4.6. Patterns of the Ethiopia's public expenditure
Chapter Five:Public Sector Resource Allocation
5.1 Meaning and Importance of Public Budget
5.2. Principles and Procedures of Budgeting
5.3. Theories of Government Budgeting
5.4. Types of budgeting system
5.4.1. Line- item budgeting
8Hrs
5.4.2. Performance-based budgeting
5.4.3. Zero- based budgeting
5.5. Budget as an Instrument of Economic Policy
5.6. Structure of government Budget
5.7. Budgetary Deficit Financing
5.8. Public Budget in Ethiopia
Chapter 6 : Public Debt
6.1 Concepts of Public Debt
6.2. Need for Public Debt
5Hrs 6.3 Economic Effects of Public Debt
6.4 Debt Burden and Redemption of Public Debt
6.5 Public Debt in a Developing Economy
Chapter 7: Deficit Financing
7.1 Meaning of Deficit Financing
7.2 Objectives of Deficit Financing
5Hrs
7.3 Effects of Deficit Financing
7.4 Limits to Deficit Financing
Chapter 8. Fiscal Federalism /Decentralization
8.1. Definitions and concepts of decentralization
8.2. Arguments for and Against decentralization
5Hrs
8.3. Intergovernmental finance
6.6.1 Types of intergovernmental transfers
107
6.6.2 Rationales for intergovernmental grants
8.4. Fiscal federalism in Ethiopia Context
8.4.1. Revenue and expenditure assignment in Ethiopia
8.4.2. Intergovernmental transfer systems in Ethiopia
8.4.3. Block Grant Transfer Formulas
Course Policy
that specific quiz
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
References
Atkinson, Anthony B. and Joseph E.Stiglitz.1980.Lecture on public economics McGraw-Hill
books Co-.;
Bailey, Stephen J. 1995. Public sector Economics: Theory, policy and practice
Macmillan Press Ltd.‟London.
Baker,Samuel& Catherine Elliot (eds.) 1990. Readings in public sector Economics .
D.C.Health and Co: Lexington.
Boadway.Robin W. 1979.Public sector Economics. Wintrop Publisher: Cambridge.
Brown .C.V. and P.M. Jackson, 1990.Pulic sector Economics, 4th edition. Blackwell:
108
Oxford.
Browning ,E.K. and J.M. Browning ,1987 Public finance and the price system 3red
Edition . Macmillan publishing Co.: New York.
Cullis John ,& Philip Jones 1998. Public finance and public choice . 2nd edition.
Oxford University Press; Oxford.
Easterly ,William , et al (eds.),1994. Public sector Deficits and macroeconomic
performance, Oxford University Press : Oxford. Jha Raghbendra ,1998 Modern Public
economics Rout ledge : London
Musgrave ,R.A and Peggy Musgrave ,1982. Public Finance in theory and practice, 3rd edition
McGraw-Hill: London.
Stiglitz,J.E. 2000.Economics of the public sector ,3rd edition .W.W. Norton & co.: New York .
Any other relevant books on the course may serve the purpose.
Areas for term paper**
1. Arguments for and against state intervention in the economy
2. Fiscal federalism
3. Powers of state and federal governments on tax
4. Types of tax in Ethiopia
5. Means of deficit financing in Ethiopia
6. Fiscal policy:
7. Value added tax(VAT):
8. A brief review of government budget in Ethiopia(19..
9. Domestic versus external sources of revenue of the government of Ethiopia
10. Impacts of deficit financing on key macroeconomic variables: inflation, unemployment,
private investment, economic growth
11. Capital versus recurrent expenditures in Ethiopia
12. Theories of public expenditure
13. Theories of public budgeting
14. Federal versus state power of taxation in Ethiopia
15. Fiscal policy and its implementation in Ethiopia
16. Structure of public debt in Ethiopia
17. Effects of public debt on the economy
** Students are expected to prepare and present a term paper on the above selected issues
109
Course Title: Development planning and project analysis I
Course Description
In this course students study the evolution of development thinking and planning, types
of development planning, as well as nature and types of development planning models
and their application to economic policy analysis. The topics include evolution of
development doctrine and planning, types of development planning, quantitative
development techniques, and development planning in practice.
Course Objective
Planning is seen as essential for the guiding development path of countries, especially
developing countries like Ethiopia. It is an integral part of their economic systems. The
purpose of this course is to create an understanding of the concept of development
planning and the tools that are used in practice. The substance of development planning
would be taken up in different parts of the course focusing on concepts, principles, tools
and practices. The following are the main topics to be covered in this course.
Contents
1. The Evolution of development paradigms and planning

Evolution of development thinking and planning
The meaning of development planning
The rationale for development planning
The need for planning in Ethiopia
Requisites for successful development planning
2. Classification of development planning

Development planning by direction and inducement
Short term, Medium-term and long-term development planning
Fixed and rolling development planning
Physical and Financial planning
Perspective planning
3. Strategic Planning and its Application

3.1. Strategic Planning: Definitions Frameworks,
3.2. Strategic planning and management process
External Analysis
Internal Analysis
SWOT Analysis
3.3. Implementing and Evaluating Strategy
4. Quantitative development planning techniques

4.1 Characteristics of development planning techniques
110
43.2. Aggregate consistency planning models
4.2.1 The Harrod-Domar growth model
4.2.2 Two-Gap Model
4 3.3 Disaggregated consistency development planning models
4.3.1 Input-Output planning models
4.3.2 Social Accounting Matrix (SAM)
4.4.3 Linear Programming Model
5. Development planning in practice
5.1. Experiences from Ethiopia and other Developing countries
5.2 South Asian Development Experience
5.3 Latin American Development Experience
5.4. OECD countries planning experiences
Evaluation:
Assignment =20%
Tests and Quizzes =30%
Final exam =50%
References
Agrawal A.N.(1989) Economics of development and planning, 2nd edition, Vikas, Delhi
Chowdhury, A. and Kirkpatrick, C. (1994) Development policy and planning: An
introduction to models and techniques, Routledge.
Jhingan, M.L. (1997). The Economics of Development and Planning, 35th ed., Vikas
Publishing House, New Delhi.
Lewis, Arthur (1972) Development Planning: The Essentials of Economic Policy, George
Allen and Unwin Ltd.
Pyatt, G. & J. I. Round (1977) Social Accounting Matrices for Development Planning,
Review of Income and Wealth, Series 23, No.4; 339-364.
Pyatt G. & A. R. Roe, with R .M. Lindley, J. I. Round and others (1977) Social Accounting
for Development Planning with Special Reference to Sri Lanka (Cambridge University
Press, Cambridge).
Round, J I (2003) „Constructing SAMs for Development Policy Analysis: Lessons
Learned and Challenges Ahead', Economic Systems Research, 15(2): 161-184.
Sadoulet, E. and de Janvry, A. (1995) Quantitative Development Policy Analysis, the
Johns Hopkins University Press, Baltimore and London.
Todaro, Michel P. (1992), Development Planning: Theory and Practice in Economics for a
Developing World, Longman, London and New York.
Development Plans of Ethiopia
111
COURSE NAME: PLANNING AND PROJECT ANALYSIS II
COURSE CODE: ECON 4132
Course Description
This course focuses on project implementation, monitoring and evaluation. The subject matter
of project analysis is outreaching beyond the Cost-Benefit analysis. This time government and
non- government organization are highly demanding experts with a knowledge of monitoring
and impact evaluations. The course is organized into five major chapters. The first chapter is
devoted to the basic concepts and cycles of a project. The second chapter deals with financial
analysis and appraisal of projects. The third chapter builds on the economic analysis of the
project. Chapters four and five discuss the concepts of project monitoring and evaluation.
Course Objective
The purpose of the course is to outline and present the general framework and the basic
methodology for monitoring and impact evaluations for different interventions. The course is
intended to introduce basic monitoring and impact evaluation theories and methodologies.
Once students have a good grasp of the theory and methodologies, they will be in a position to
monitor and evaluate intervention made by government and non-government organizations.
Lecture Topic of the Lecture Reference Materials

Hours
Chapter I: Basic Concepts
1. Introduction - Gittenger
1.1 The Project concept - Chandra
- Definition of Project - Lecture Notes
- Basic characteristics of a project
- Classification of project
1.2 The project Cycle
6 hours
- Identification
- Preparation and Analysis
- Aspects of project analysis
- Appraisal
- Implementation
- Evaluation
Chapter II: Financial Analysis and Appraisal of Projects
2.1. Scope and Rationale - Gittenger
2.2. Identification of Costs and Benefits - Chandra
2.3. Classification of Costs and Benefits - Lecture Notes
2.4. The valuation of financial costs and benefits
9hours
2.5. Investment Profitability Analysis
- Non-discounted measures of project worth
- Discounted measures of project worth
2.6 Sensitivity analysis
112
Chapter III: ECONOMIC ANALYSIS OF PROJECTS
3.1. An overview of economic analysis - Gittenger
3.2. Identification costs and benefits of economic - Chandra
analysis - Lecture Notes
3.2.1. Sunk cost
3.2.2. Transfer payments, externalities and others
3.3. Determining economic values
3.3.1. Adjustment for transfer payments
3.3.2. Shadow pricing
3.3.3. Traded and Non-traded commodities
15 hours 3.3.4. Valuation of Traded and Non-traded
commodities
3.3.5. Border parity pricing
3.3.6. National parameters and standard
conversion factor
3.4. Social cost benefit analysis
3.5. Cost effectiveness
3.5.1. Cost effectiveness measures
3.5.2. Weighted cost effectiveness measures
Chapter-IV Project Implementation, Monitoring and Evaluation

Introduction: Monitoring and Evaluation What is - Shahidur R.,
Monitoring and Evaluation Gayatri b., and
9 hours 1.1 Why monitoring and Evaluation Hussain A
1.2 Kinds of Monitoring and Evaluation - UNIDO, (1972)
1.3 Procedures in Monitoring and Evaluation - LectureNotes
Chapter- V Evaluation: Some Basics of impact evaluation
2.1. Impact assessment basics - Shahidur R.,
- Qualitative versus quantitative impact Gayatri b., and
Assessments Hussain A
- Quantitative Impact Assessment: Ex post versus - Lecture Notes
Ex ante Impact Evaluation
9 hours
2.2 Methodologies in impact evaluation
- Randomized evaluations
- Matching Methods- Propensity score matching
(PSM)
Course Policy
113
that specific quiz
 Students must develop a project proposal as one of the requirements for the successful
completion of the course

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.

Assignment and Act. (Indiv/group) 20%
Final Exam 50 %
Total 100%
114
Course Name: History of Economic Thought I
Course Description
The module, History of Economic Thought is organized in to two parts: History of Economic
Thought I and History of Economic Thought II. The course History of Economic Thought I
provide students with a general picture of the development of economics until the emergence of
classical economics, socialism and marginal revolution. The course demonstrates the
contributions of pre-classical thinking, classical thinkers and deviant thinkers from classicism in
shaping contemporary economic thought. Critical analysis of preceding schools of thought,
beginning from economic ideas of the ancient philosophers up to more recent ones, which help
students in developing broader understanding of contemporary economic theories.
Course Objective
The main objective of this Course is to provide students with a broader understanding of
contemporary economic theories through a critical analysis of the main succeeding schools of
thought beginning with the economic ideas of the ancient philosophers to those of recent
economic thinkers. The specific objectives are:
 To acquaint students with the creation and evolution of alternative school of economic
thought
 To investigate the technological, ideological, and social forces that has influenced these
schools of thought and the associated theories that were used to explain and analyzed
particular choices.
 To encourage the discussion and study of how the rapidly changing events will alter
society's (and the student's) perspective about economic relationships. What new
economic theories will these altered perspectives encourage?
 To consider the impacts that alternative schools of thought have had on" main stream"
economics
 To Encourage the discussion and create brain storming environmental for students to
forward their reflection freely
 To encourage students to question them selves, to pose economic issues and be able to
examine, synthesis them.
 To encourage students to ask themselves the questions:
o "What do I know?"
o "How do I know?"
o "What do I believe?” and
o "Why do I believe it?"
o "Why did economic philosophers develop different economic theories and
principles?" What were the pushing factors behind?"
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Course content
Lecture Topic of the Lecture Reference
Hours Materials
1. Introduction
1.1. Defining history of Economic thought
1.2. The interaction between Economic history and History of
economic thought
1.3. Scope and Significance of History of thought
1.4. The five major questions that we need to beat in mind in
considering the various schools of thought. these are
1.4.1. What was the historical background of the school?
Or the pushing factors behind
2 hours
1.4.2. What were the basic tenets of the school? Who
were the forerunners?
1.4.3. Whom did the school benefit? Or seek to benefit?
1.4.4. How was the school valid, useful, or correct in its
time?
1.4.5. Which tenet of the school becomes long lasting
contribution?
1.5. What was the historical situation in Ethiopia when these
ideas were developed elsewhere?
2. Methodological Issues of Economic
2.1. Methodological Controversies in Economic and Evolution of
Various Methodologies
2.1.1. Economics as an Art and as a Science
2.1.2. The importance of Empirical Verification and
2.1.3. The Rise of Logical positivism
2.1.4. From Logical positivism to falsificationism
5 hours
2.1.5. Falsificationism to paradigm
a. K. Popper and its Critics
b. Thomas Kuhn
2.1.6. Recent developments in the Methodology of Economics
a. The Scientific revolution paradigm
b. Lakatos Research Program
3. Ancient Ideas of Economic Thought or Pre Classical Economics
3.1. Hebrewa, Greeck, Plato, Aristotle, Xeno Phone
3.2. Synicism, Stoicism, Epicurism, The Romance
3.3. Medieval Economics and Feudalism– St. Thomas Acquinas,
12 hours Nicholas Oresme, Grasham
3.3.1. Just price, Manor, Guild, usury
3.3.2. Economic functions of the State
3.4. Mercantilism
3.5. The Physiocratic school of Economic thought
4. The Classical School
4.1. Over view of the classical school
4.2. Factors for the Emergence of the Classical school
4.3. The forerunners: William petty , R. Cantillon , Dudly North , David
15 hours
Hume
4.4. Adam smith: Adam Smith and Industrial revolution, Dicision of
labor, the measure and values of labor, Cost of production theory,
supply-determined prices etc
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4.5. Thomas Robert Malthus's population theory, The theory of general
Gults, The LDR, differential Rent, The alternative cost of land, Land
as a factor of production
4.6. David Ricardo's system's : The labor theory value, Capital costs and
Labor values, The Ricardo effect, the Invariable Measure of value,
the fundamental theorem of value, the effect of capital accumulation,
the trend of relative shares, the theory of Comparative costs etc
4.7. Jean Baptist Say: Say; Say‟s Law and classical monetary theory, say's
identity
Other contributions to the classical school: Jremy Bentham, Nassau
William Senior, John Stuart Mill
2 hour 5. German Historical School: Frederic List
6. The rise of Socialist thought
5.7 Pre Marxian Socialist thinkers: Robert Owen, Sismonde de Sismondi,
Pierre Joseph Proudhon, Proudhan, Lassale, Louis Bllance, Max
6 hours Webber etc
5.8 Marxian Economics: Marx‟s Methodology, Value and Surplus Value,
The transformation Problem, Solutions of the Transformation
Problem, Historical transformation, Profits as Unearned income, etc
7. The Marginal Revolution:
7.1 Overview of the Marginalist School, The Maximization Principle
7.1 Forerunners of Marginalism: Antoine Augustin Cournot and Herman
6 hours Heinrich Gossen,
7.2 First - Generation Marginalists: Jevons, Walras, and The Austrian School
7.3 Second - Generation Marginalists: Edgeworth, Wicksteed, Clark,
Wicksell,
Course Policy
Reference Book:
 Spigle: (1991) the Growth of Economic thought
 I. Hahane Rimma: (1986) Development of Economic thought
 Boden, V. Elbert, Economic Evolution: Principles, Issues, Ideas, South Western
Publishing Co., Chicago, USA
 Gray, Alxander, the Development of Economic doctrin: An Introductory Survey
(revised By Alan Thomposon, 2nd ed. Longman group Limited
 Oser, Jacob, The Evolution of Economic Thought, 2nde.
 Jajela, H.L., history of Economic thought, 4th ed., Vikas publishing House Pvt.LTd, New
Delhi, India
 Roll, Eric, A History of Economic thoughts, Prentice-Hall, New York, USA
117
Course Name: History of Economic Thought II
Course Code: Econ3142
That is, as a continuation of the first, History of Economic Thought II mainly deals with
economic theories and School of thoughts that have developed after Classical School of thought.
Hence, this course is mainly about the major families of thought namely Neoclassical,
Institutional school and the other non-Marxian heterodox economic thoughts, Keynesian school,
their ramifications and their most recent reformulations, and reinterpretations.
that specific quiz
Course content
Lecture Topic of the Lecture Reference
Hours Materials
1. The Neoclassical School
1.1 The Neoclassical School- Pure competition: Alfred Marshall
(Marshallian Economics, Marshall and the Cambridge school): Utility
and Demand, Cost and Supply; Irving Fischer
10hours
1.2 The Neoclassical School – Departure from pure Competition: Piero –
Sraffa, Edward Hastings Chamberlin, Jean Robinson
1.3 Sidge wick , Nicolson and the Cambridge school
1.4 Wick sell and the Stockholm school
2. 2. Heterodox Economic Thought
2.1 Early Critics of Neoclassical Economics
2.1.1 The Old Institutional School
2.2 The development of Modern Heterodox school
8houras
2.2.1 The New Institutionalist School
2.2.2 Quasi- Institutionalists: Joseph Schumpeter, Gunnar Myrdal,
John Kenneth Galbraith
2.2.3 Post-Keynesians
3. 3.General Equilibrium and Welfare Economics
3.1 Approaches to welfare economics
3.1.1 Early neoclassical approach to welfare
economics
9hours 3.1.2 New trends in welfare economics approach
3.1.3 Pareto efficiency in welfare and pre conditions of Pareto
efficient conditions
3.2.4 Kaldor and Hicks criterion of efficiency condition
3.2 Walrasian General Equilibrium and welfare
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3.3 Market failures and welfare
3.3.1 Pigou versus Ronal Coase
3.4 Welfare under capitalism and socialism
4.The Development of Modern Microeconomic Theory
4.1 The Movement Away from Marshallian Economics
4.2 The Monopolist Competition Revolution
6hours 4.3 Milton Friedman and the Chicago approach to Microeconomics
4.4 Topics in Modern Microeconomics
4. The Development of Modern Macroeconomic Thought
4.1. Historical Forerunners of Modern Macroeconomics: Quantity Theory of
Money, BC Theory, Neoclassical Macroeconomics
4.2. The survival of capitalism and Emergence of macro economics
4.3. Keynesian System: The Keynesian Revolution,
5.3.1 J.M Keynes
5.3.2 The general theory of employment
5.3.3 Interest and money
5.3.4 The concept of the multiplier
5.3.5 Theory of employment &price
9 hours 5.3.6 classical economics Vs Keynesian economics
5.3.7 The policy implications of classical Vs the policy implications of
Keynesians
5.3.8 The post keynesian development in economic thought
5.3.9 Keynesians, neo-Walrasians, and monetarists
5.3.10 Monetarists, IS-LM Analysis,
5.3.11 Keynesianism and the Micro foundations of Macroeconomics,
5.3.12 The Rise of New Classical Economics, Keynesian Responses to
the New Classicals
5.3.13 Keynesian economics and underdeveloped countries
5.4 Topics in Modern Macroeconomics
2hours 5. The Development of Econometrics and Empirical Methods in Economics
6. Developments of Economic Ideas outside the Western World
7.1 Introduction
7.2 Oriental and middle East Economic thought (Ottoman Turk, Chinese,
4hours Japanese, etc)
7.3. Development of Economic ideas in Africa/Ethiopia
7.4. Concluding remarks
Course Policy
that specific quiz
119
Recommended Text Books
Colander, David C. and Landreth, Harry (1994) History of Economic Thought, 3rd ed.
(Boston: Houghton Mifflin.)or (2002) 4th edition
Brue, Stanley and Grant, Randy R. (2013, 2007)The Evolution of Economic Thought eighth
edition
Rima, Ingrid Hahne (1986) Development of Economic Analysis, 4th ed. (Irwin: Homewood,
Illinois)
Blaug, Mark (1996) Economic Theory in Retrospect 5th edition (Cambridge University Press)
Roll, Eric (1973) A History of Economic Thought, 4th ed. (London: Faber and Faber, Ltd.)
Bhatia H L (1989) History of Economic Thought, Vikas Publishing House Pvt. Ltd
Spiegle, H.W. (1991) The Growth of Economic Thought, 3rd ed. Duke University Press, London.
Hajela, T.N. (1967) History of Economic Thought
Heilbroner, Robert L., The Worldly Philosophers: the lives, times, & ideas of the great economics
th
thinkers, 7 Edition, published by NY Simon & Schuster, 1999 or by Penguin Books, 2000.
Schumpeter, Joseph A., History of Economic Analysis, New York, Oxford University Press, 1954.
Jichuang, Hu (2009) A Concise History of Chinese Economic Thought. Foreign Languages Press,
Beijing, China.
MORRIS-SUZUKIA, TESSA (1989) History of Japanese Economic Thought. Routledge, London and
New York.
Ermiş, Fatih (2014) History of Ottoman Economic Thought: Developments before the nineteenth
century. Routledge, London and New York.
Popescu, Oreste (1997) Studies in The History of Latin American Economic Thought. Routledge,
London and New York.
Students may refer to any other decent history of Economic thought books.
of the class. Specifically the course will be delivered through the following methods:Lecture
Method, In-class problem solving, Group Work and Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
120
CourseName: Thesis in Economics
CourseCategory: Core
CourseCode: Econ-M3151
CourseCompetency: Enabling students to undertake an independent Research.
Description Courses included in the module Remark

Thesis in Economics I Thesis in Economics II
Couse code Econ 3151 Econ 3152
Cr Hrs 2 3
EtCTS 3 5
Pre-requisite Econ2063 Econ3151
Mode of Delivery Semester Based
Course Policy
 The student advisee must consult/contact his advisor in his/her regular contact hours.
 The grade for this course will be partially evaluated by the final defence of the thesis, which
takes 40% of the evaluation by other examiners.
 A student reported of plagiarism for the first time will be suspended for one year. Doing so
for a second time will result is complete dismissal from the program.
 The instructor has full discretion to approve the research title of his advisees and title
changes are only possible in consultation with the advisor.
Evaluation Method

Advisor 60%
Examiner (defense) 40%
Total 100%
121
Course Title Financial Economics
Course code: Econ 3091
The changes and advances in finance theory and practice over the past decades have Resulted
in a profoundly change in the financial world. These changes have been further accelerated by
the extensive globalization of financial markets and the rapid development in financial
technologies in recent years. This course provides a rigorous introduction to the fundamentals
of modern financial analysis and their applications to business challenges in capital budgeting,
project evaluation, corporate investment and financing decisions, and basic security analysis
and investment management. The course is lecture based. Lectures will cover the theory,
examples, and class discussion Homework assignments will focus on applying the material
from lectures.
The major topics to be covered are: The structure of financial system, The time-value of money,
Introduction to financial instruments, Risk and return, Portfolio theory, Capital allocation,
Pricing models, such as the Capital Asset Pricing Model and Index Model, Market efficiency,
Equity valuation, Bond pricing and the Term Structure of Interest Rates and Derivatives -
Pricing and Use.
Student Learning Outcomes: At the end of the module, students are expected to be able to:
Explain the role of financial markets and financial intermediaries in the financial system
Analyze interest rates using the bond market.
Course content
Lecture Topic of the Lecture Reference Materials
Hours
Chapter 1: Nature and role of Financial system in economic
development
1.1 Structure of financial system David S. Kidwell, et at
1.2 Role of financial system in economic development (2006) Financial
1.3 Primary and secondary securities Institution, Markets
1.4 Asset transformation role of Financial institutions and Money, 9th ed.
1.5 Debt and Inalienability of Human Capital Fabozzi J. Frank and
1.6: Introduction to financial instruments Modgiliani, F.
8hrs • Risk and return Financial Markets and
• Portfolio theory. Institutions, and
• Capital allocation edition
• Pricing models, such as the Capital Asset Pricing Model Hull, John, Options,
and Index Model Futures, and other
• Market efficiency Derivatives, Pearson
• Equity valuation education.
122
Chapter 2 Interest Rate Determination
Baye R. Michall and
Jansen W. Dennis (2006)
2.1 The level of interest rates Money, Banking and
2.2 Bond prices and interest rate Financial Markets: The
6hrs
risk Economics Approach.
2.3 The structure of interest rates Delhi: AITBS
publishers &
Distributers.
Chapter 3: Financial Institutions : Deposit Type, Contractual, and Other Financial
Institutions
3.1 Deposit type institutions Michael and Dennis (2000).
Money, Banking, and Financial
3.2 Contractual saving institutions
5hrs Market: The Economics
3.3 Investment funds Approach. Delhi: AITBS
3.4 Other types of financial institutions Publishers & Distributors.
Chapter 4 Financial Markets: Money Markets, Capital Markets
Peter S. Rose (2003) Money and
4.1 Bond markets Capital Markets: Financial
4.2 Mortgage market Institutions and Instruments in a
5hrs 4.3 Equity market Global Market Place, 8th ed.
4.4 Derivative markets David S. Kidwell, et al (2006)
Financial Institutions, Markets,
and Money 9th ed.
Publications of the NBE, CBE,
Chapter 5: Financial Market and Institutions in private Banks & other Finance
5 hours
Ethiopia Institutions in Ethiopia: various
Issues
Chapter 6: Financial Regulation and preliminary
3 hours Basel I , II and III manuals
introduction to the Basel Accords

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
123
Final Exam 50 %
Total 100%
References
Baye R. Michael and Jansen W. Dennis (2006) Money, Banking and Financial Markets: The
Economics Approach. Delhi: AITBS publishers & Distributers.
David S. Kidwell, et al (2006) Financial Institution, Markets and Money, 9thed.
Fabozzi J. Frank and Modgiliani, F. Financial Markets and Institutions, (1992)
Baye, Michael, R and andJansen, W. Denis (2000). Money, Banking, and Financial Market: The
Economics Approach. Delhi: AITBS Publishers & Distributors.
Mishkin, Frederic S (2013) Economics of Money, Banking, and Financial Markets, 11th Edition,
Columbia University
Peter, S. Rose (2003) Money and Capital Markets: Financial Institutions and Instruments in a
Global Market Place, 8thEd.
Publications of the NBE, CBE, Private Banks, and Other Finance Institution in Ethiopia: Various
Issues
124
Course Name: Introduction to Institutional and Behavioural Economics
Course Category: Core
Course Description
This course focuses on basic concept of institutions, theories, models, policies and strategies
which are crucial for development. Institutional economics is the study of the evolution of
economic organizations, laws, customs, beliefs, and their interactions with the process of
economic development. In the course, we examine the role of history and both formal and
informal institutions (culture) in the performance of economies. We take a microeconomic and
behavioral approach to understand the feedback between individual beliefs, choices, and
institutions. Behavioural economics analyses regularities in actual individual and strategic
decision making and documents departures from behaviour predicted by classical economic
theory. Behavioural economics explains these departures by incorporating psychological aspects
into economic theories. Students will be able to relate institutional and behavioral mechanisms
for development (e.g., laws, customs, and beliefs) on development; empirically analyze the role
of history on development; widen their understanding of the development process (develop thesis
ideas) and integrate behavioral insights for institutional design.
Course Contents
Chapter 1: Introduction-Concept of institutions
1.1. Definition of institutions
1.2. Functions of institutions
1.3. Institution versus organization
1.4. Informal versus formal institutions
1.5. Outcomes of institutions
1.6. The Old Institutional Economics
1.7. The new institutional economics
1.8. Basic Behavioural Economics
125
Chapter 2: Introduction to Behavioural Economics
3.1 Individual Decision Making (Choice under certainty, Judgement and Choice under
Risk and Uncertainty and - Intertemporal Choice)
3.2 Strategic Decision Making (Classical Game Theory, Behavioural Game Theory and
Social Preferences)
Chapter 3:Theories of institutional change
2.1. Spontaneous institutional change
2.2. Institutional change as designed
2.2.1. The efficiency view
2.2.2. The Power (Distributive) Perspective
Chapter-4: Property rights-theories and practice
3.1. The concept of property rights
3.2. Property right regimes
3.3. Forces of change in property rights
Chapter-5: Social capital and collective action, theories and practices
4.1. The concept of social capital
4.1.1. classification of social capital
4.1.1.1. Structural versus cognitive
4.1.1.2. Embeddedness versus autonomy
4.2. Theories of collective action
4.3. The role of social capital on collective action
Chapter-6: Neoclassical economics versus transactions cost economics
5.1. Attributes of markets in neoclassical economics
5.2. Concept of transaction costs
5.3. Types of transaction costs
5.4. Measuring transaction costs
5.5. Problems of measuring transaction costs
5.6. Determinants of transaction costs
5.7. The role of contracts on minimizing transaction costs
5.8. Forms of contracts
126
5.9. Factors affecting effectiveness of contracts
Chapter-7: Institutional performance and economic development
6.1. Role of institutional performance for economic development
6.2. Institutions and foreign aid

 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
References
1. Agrawal, Arun and Ostrom, Elinor (1999). Collective Action, Property Rights, and
Devolution of Forest and Protected Area Management. In: Meinzen-Dick, Ruth; Knox,
Anna and Monica, Di Gregorio (eds.). Collective Action, Property Rights, and
Devolution of Natural Resource Management. Exchange of Knowledge and
Implications for Policy. Proceedings of the International Conference held from 21-25
June in Puerto Azul, The Philippines, 75-109.
2. Ahn, T.K. and Ostrom, Elinor (2002). Social Capital and the Second-Generation
Theories of Collective Action: An Analytical Approach to the Forms of Social
Capital, Paper Prepared for Annual Meeting of American Political Science
Association, August 29-September 1, 2002, Boston, MA.
3. Alston, Lee J.; Libecap, Gary D. and Schneider, Robert (1995). Property Rights
127
and the Preconditions for Markets: The Case of the Amazon Frontier. Journal of
Institutional and Theoretical Economics 151 (1), 89-107.
4. Bardhan, Pranab (2005). Scarcity, Conflicts, and Cooperation: Essays in the
Political and Institutional Economics of Development. Cambridge and MA: The MIT
Press.
5. Barzel, Yoram (1997). Economic Analysis of Property Rights. Cambridge: Cambridge
University Press.
6. Boserup, E. (1965). The Conditions of Agricultural Growth: The Economics of
Agrarian Change under Population Pressure. London: George, Allen & Unwin.
7. Dequech, David (2006). The New Institutional Economics and the Theory of
Behavior under Uncertainty. Journal of Economic Behavior and Organization 59, 109-
131.
8. Di Gregorio, Monica; Hagedorn, Konrad; Kirk, Michael; Korf, Benedikt; McCarthy,
Nancy; Meinzen-Dick, Ruth and Swallow, Brent (2004). Property Rights, Collective
Action and Poverty: The Role of Institutions for Poverty Reduction, Humboldt University
of Berlin, Division of Resource Economics (memio).
9. Eggertsson, Thrainn (1997). The Old Theory of Economic Policy and the New
Institutionalism. World Development 25 (8), 1187-1203.
10. Evans, Peter (1996). Government Action, Social Capital and Development. World
Development24 (6), 1119-1132.
11. Field, John (2003). Social Capital. London and New York: Routledge.
12. Gächter, Simon and Fehr, Ernst (1999). Collective Action as Social Exchange.
Journal of Economic Behavior and Organization 39, 341-369.
13. Hardin, Garrett (1968). The Tragedy of the Commons. Science 162, 1243-1248.
14. Joireman, Sandra F. (2001). Property Rights and the Role of the State: Evidences from the
Horn of Africa. Journal of Development Studies 38(1), 1-28.
15. Jones, Eric C. (2004). Wealth-Based Trust and the Development of Collective
Action. World Development 32 (4), 691-711.
16. Knack, Stephen and Keefer, Philip (1997). Does Social Capital Have an Economic
Payoff? A Cross-Country Investigation. The Quarterly Journal of Economics 112(4),
1251-1288.
128
17. Meinzen-Dick, Ruth S. and Pradhan, Rajendra (2002). Legal Pluralism and Dynamic
Property Rights. Collective Action and Property Rights Initiative (CAPRi) working paper
No. 22, Washington, DC.
18. Nabli, Mustapha K. and Nugent, Jeffrey B. (1989). The New Institutional
Economics and Its Applicability to Development. World Development 17 (9), 1333-
1347.
19. Narayan, Deepa and Cassidy, Michael F. (2001). A Dimensional Approach to Measuring
Social Capital: Development and Validation of a Social Capital Inventory. Current
Sociology49(2), 59–102.
20. North, Douglas (1989). Institutions and Economic Growth: A Historical
Introduction. World Development 17 (9), 1319-1332.
21. North, Douglas (1990). Institutions, Institutional Change and Economic Performance.
New York: Cambridge University Press.
22. North, Douglas (1991). Institutions. Journal of Economic Perspectives 5 (1), 97-112.
23. Olson, Mancur (1965). The Logic of Collective Action: Public Goods and the Theory of
Groups. Cambridge and MA: Harvard University Press.
24. Ostrom, Elinor (1990). Governing the Commons: The Evolution of Institutions for
Collective Action. Cambridge: Cambridge University Press.
25. Ostrom, Elinor (1994). Neither Market Nor State: Governance of Common-Pool
Resources in the Twenty-first Century. IFPRI Lecture Series, Washington, DC.
26. Ostrom, Elinor (1998). A Behavioral Approach to the Rational Choice Theory of
Collective Action. American Political Science Review 92 (1), 1-22.
27. Ostrom, Elinor (2000). Social Capital: A Fad or A Fundamental Concept. In: Dasgupta,
Partha, Serageldin, I. (eds.). Social Capital: A Multi-faceted Perspective. World
Bank, Washington DC, 172-214.
28. Sandler, T. (1992). Collective Action. Ann Arbor, MI: University of Michigan Press.
29. Schlager, Edella and Ostrom, Elinor (1992). Property Rights Regimes and Natural
Resources: A Conceptual Analysis. Land Economics 68(3), 249-262.
30. Schmid, A. Allan (2004). Conflict and Cooperation: Institutional and Behavioral
Economics. UK: Blackwell Publishing.
31. Skaperdas, Stergios (1992). Cooperation, Conflict, and Power in the Absence of Property
129
Rights. American Economic Review 82 (4), 720-739.
32. Wade, Robert (1987). The Management of Common Property Resources: Collective
Actions as an Alternative to Privatization or State Regulation. Cambridge Journal of
Economics(11), 95-106.
33. Williamson, Oliver E. (2000). The New Institutional Economics: Taking Stock, Looking
Ahead. Journal of Economic Literature 38, 595–613.
34. Williamson, Oliver E. (2005). Transaction Cost Economics. In: Menard, Claude and
Shirley, Mary M. (eds.). Handbook of New Institutional Economics. The Netherlands:
Springer, 41-65.
35. Woolcock, Michael (1998). Social Capital and Economic Development: Toward a
Theoretical Synthesis and Policy. Theory and Society 27, 151-208.
36. Kahneman, Daniel 2013, Thinking, Fast and Slow, Farrar, Straus and Giroux.
37. Thaler, Richard 2016, Misbehaving: The Making of Behavioral Economics, W. W. Norton
& Company.
38. Thaler, Richard and Cass Sunstein 2009, Nudge: Improving Decisions About Health,
Wealth, and Happiness, Penguin Books.
39. Akerlof, George, and Robert J. Shiller, "Behavioral Macroeconomics,"
130
Course Name: Urban and Regional Economics
Course Description
This course consists of 11 chapters. The first chapter introduces about urban and regional
economics. The Market Forces In the Development of Cities; Urban Land Use Pattern and
Values; Urban Poverty and Public Policy; and Urban Local Governments and Finance, Regional
Economics, Local and Regional Economic Development, Local and Regional Development
Strategies and Policies, Institutions and Rural Urban Relation, Decentralization, Globalization,
and Regional Development, Local and Regional Development Planning are discussed from
chapter two to eleven respectively.
Course Contents
Chapter 1: Meaning and Scope of Urban and Regional Economics
1.1 What is urban economics?
1.2 What is regional economics?
1.3 Integrated study of urban and regional economics:
Chapter 2: Market Forces in the Development of Cities
2.1 Market forces for existence of cities (Why do cities exist?)
A MODEL OF A RURAL REGION (REGION WITHOUT CITY)
2.1.1 Relaxing the second assumption: Comparative Advantage and Urban
Development
2.1.2 Relaxing the Fourth Assumption: Scale Economies in Transportation and Trading Cities
2.1.3 Relaxing the third assumption: Internal Scale Economies in Production
2.1.4 Agglomerative Economies in production and Marketing
2.2.1 Commercial firms and trading cities
2.2.2 Transfer-oriented industrial firms Resource-Oriented Firms
2.3 Analysis of Market Areas and Central Place Theory
2.3.1 Market Area Analysis
2.3.2 Application of Market area analysis: The General Case
131
2.3.3 Central Place Theory
2.3.4 Central Place Theory and the Real World
Chapter 3: Urban land use patterns, land values, and role of local states in urban land
management
3.1 Determinants of the price of urban land
3.2 Urban land value
3.3 Bid Rents and Location Gradient: the importance of relative location
3.4 Land markets, Speculation, and governments in the urban economy
3.5 Coping mechanisms of the poor; informal land markets
3.6 Bringing the poor into the formal land market
Chapter 4: Urban Poverty and public policy
4.1 Some basic concepts of urban poverty
4.2 Causes of urban poverty
4.3 The three major aspects of poverty
4.4 Towards alleviating the three major aspects of urban poverty
4.5 General policy issues toward urban poverty
Chapter 5: Urban Local Governments and Finance

5.1 Government Roles in the Provision of Urban Services
5.2 Income and Expenditure of local governments
5.2.1 Municipal Revenues
5.2.2 Public Expenditures
5.3 Strategies to cope up urban fiscal stress
Chapter 6: Regional Economics: Conceptual Foundations
6.1The Concept of Region
6.2Relations of activities within a region
6.3What causes regional growth?
6.3.1 Demand and Supply as determinants of regional development
The role of demand
Economic Base Theory
6.3.2 Interregional trade and factor movements
132
6.4. Regional pathology: the emergence of "problem areas"
6.4.1. Backward regions
6.4.2. Developed regions in recession (regions under arrested development)
6.4.3. Excessive growth and concentration
Chapter 7: Local and Regional Economic Development
7.1 Background and definition
7.2 Local and regional economic development; initiatives and actors
7.3 Theories of local and regional economic growth and development
7.3.1 Introduction: Paradigms and schools of thought of regional development
7.3.2 Resources and regional development (theories)
7.3.3 Staples theory of regional growth-Focus on Natural Resources
7.3.4Theories based on demand/market
7.3.5 Theories based on space
7.3.6 Urban hierarchy theories
7.3.7 Growth poles/Growth center theory
7.3.8 Agropolitan development theory
7.3.9 Entrepreneurship theory for regional development
7.3.10 New growth theories: Endogenous Growth
7.3.11 Flexible production and Flexible specialization
7.312 Learning regions and innovative milieu
Chapter 8: Local and Regional Development Strategies and Policies
8.1 Introduction; some insights
8.2 Employment generation as a strategy for regional development
8.3 Attracting new investment and expanding existing firms
8.4 Business supports, encouraging entrepreneurial activity, and the development of
new small businesses
8.5. Encouraging investment and employment in local agribusiness industries and
raising rural farm and non-farm income
8.6 Building human capital
8.6.1Conceptual link between education and economic development: the human
capital view
133
8.6.2Human capital and regional and local economic growth
8.6.3Policy Implications
8.7 Nurturing entrepreneurship
8.8 Investment in economic infrastructure
Linkages between infrastructure and economic development
Infrastructure and economic development
Infrastructure and global competitiveness
Infrastructure and poverty reduction
Policy issues in infrastructure
8.9 Cluster based economic development strategies/Regional industrial policy
Chapter 9: Institutions and Rural Urban Relation
Introduction
9.1 Institutions
9.2 Government and economic development
9.3 Rural-Urban relations
9.3.1 Prerequisites of integrated urban-rural development
Strengthening local governments through decentralized decision making
Rural industry and non-farm employment
Favorable macroeconomic and sectoral policies
Chapter 10: Decentralization, Globalization, and Regional Development
10.1. Decentralization
10.2. Globalization and regional growth
10.2.1 Basic concepts and some insights
10.2.2 Globalization and its relation to urbanization, and regional development
Chapter 11: Local and Regional Development Planning
11.1. Introduction: Planning Concepts and Models
11.2 Aspects of planning
11.3 Local Development Planning/Decentralized Planning
11.3.2 District planning in the decentralized-planning framework
11.3.3 District/local planning approaches
11.4 Regional development Planning
134
11.4.1 Rationales for regional development planning
11.4.2 Approaches of regional planning
 Lecture Method
 Group Work
 Assignment
Assessment Methods
schedule.
Final Exam 50 %
Total 100%
Reference:
 Sullivan, Urban Economics, Sixth Edition, McGraw-Hill 2006. [ISBN (0072984767)]

 Hoover and Giarratani, Regional Economics, Online Edition,
http://www.rri.wvu.edu/WebBook/Giarratani/contents.htm
 Saxenian, A. (1996) “Inside Out: Regional Networks and Industrial Adaptation in
 Silicon Valley and Route 128”. Cityscape, Vol 2. #2. [Compares the cases of Silicon Valley and
Route 128 and introduces the importance of “network economies”].
 Quigley, John M. (1998) "Urban Diversity and Economic Growth," Journal of Economic
Perspectives, Vol. 12, #2
135
Course: Statistical Software Application in Economics
The field of economic statistics and econometrics is rapidly changing. Increasing data
availability combined with powerful computing and advanced software allows research to
address issues of statistical inference and analysis in innovative ways. This course provides
students with practical knowledge and skills to take advantage of the existed and new
developments in this regard.
Course learning outcomes:
 Develop skills related to modern Univariate and multivariate statistical analysis

 Provide practical experience related to data analysis
 Develop skills in using advanced statistical software
 Develop skills in summarizing information directed to practical decision making
 Able to compute and Generate results as well as interpret the results
Course Content:
Chapter 1: Introduction to Softwares

Chapter 2: Application to Data Management
Chapter 3: Application to Univariate Analysis
Chapter 4: Application to Bivariate Analysis
Chapter 5: Application to Cross Sectional Econometrics
Chapter 6: Application to Time Series Econometrics and Panel Data
Chapter 7: Application to Nonlinear Models

The delivery method shall be student-centered. Students are highly expected to participate in class works
at the middle and end of each session and in group discussions inside and outside of the class.
Specifically the course will be delivered through the following methods:
 Lecture Method
 Group Work
 Assignment
Assessment Methods
Student evaluation in this Course consist both formative and summative assessments including quizzes,
test and final exam. Marks will be allocated according to the following grading schedule.
Final Exam 50 %
Total 100%
Reference: Stata Manual, EViews Manual
136

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Rift Valley University

Faculty of Business and Social Sciences

Curriculum for Degree of Bachelor of Arts in Economics

Addis Ababa, Ethiopia

1.1. Background of Rift Valley University

1.2. Mission, Vision and Values of Rift Valley University

1.2.3. Values of RVU

The following are the values cherished by RVU:

1. Quality and Excellence

2. Background of the Department

Vision & Mission of the Department

Several great issues that confront us today-unemployment, inflation, environmental problems

Rationale for Curriculum Change

Specific objectives of the program:

Therefore, it is expected from an economist to

Duration of the program

The program will have Four-year duration (including freshman program)

In English: “Bachelor of Arts degree in Economics”

Course title Course code Cr.hr EtCTS Prerequisite

13 International Economics I Econ 3081 3 5 Econ2022 and Econ 2032

Course title Course code Cr.hr EtCTS Prerequisite

# Course Title Course Code Cr.hr ECTS Prerequisite

# Course Title Course Code Cr.hr ECTS Prerequisite Remark

# Course Title Course Code Cr.hr ECTS Prerequisite Remark

1. Communicative English Language Skill II FLEn 1012 3 5

Year II, semester II

Year III, semester II

Year IV, semester II

Course title Course code Cr.hr ECTS Prerequisite

# Course Title Course Code Cr.hr ECTS Prerequisite Remark

1. Critical Thinking LoCT 1011 3 5

# Course Title Course Code Cr.hr ECTS Prerequisite Remark

1. Entrepreneurship Mgmt 1012 3 5

Year II, semester II

Year II, Summer

Year III, semester I

Year III, semester II

Course title Course code Cr.hr EtCTS Prerequisite

Year III, Summer

Course title Course code Cr.hr EtCTS Prerequisite

Year IV, semester I

Year IV, Semester II

Course title Course code Cr EtCTS Prerequisite

Year IV, Summer

Course title Course code Cr.hr EtCTS Prerequisite

Year IV, semester II

Course title Course code Cr.hr ECTS Prerequisite

Raw mark Corresponding fixed Corresponding letter

Computer lab for undergraduate Program 1

1. Revision of Function and Limit Reading Materials

2. The Derivatives Reading Materials

Course Delivery Methods

Assessment Method Weight

Chapter1.Matrix Algebra Reading Materials:

Course Delivery Methods

Chapter Five: Perfect Competition Market

5.1 The Short-Run Equilibrium of the Firm and o A.Koutsoyiann

Chapter Six: Pure Monopoly Market

Course Delivery Methods

Chapter One: Monopolistic Competition

1.1. Assumptions o Koutsoyannis: pp 202

Chapter Two: Oligopoly

2.1. Non Collusive Oligopoly o Koutsoyannis: pp 216

3.1. Dominant Strategy Equilibrium o Koutsoyannis: pp 405