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APPLIED ECONOMICS:

**PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS
**

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I SEMESTER (SYLLABUS)

ECON 411 – MICRO ECONOMICS - I - 3 credits (Hard core) Module 1: An overview of demand theory : Revision of demand theory by Hicks; Revealed preference theory; Characteristics of goods approach; consumer’s choice involving risk; Indirect utility function (duality theory); Recent developments in demand analysis (pragmatic approach and linear expenditure systems); Intertemporal consumption; Recent developments in demand; Neumann Morgenstern hypothesis – Savage hypothesis – Markowitz hypothesis – Bandwagon effect – Veblen effect – demand and supply equilibrium; Cob-web theorem; Lagged adjustment in inter-related markets. Module 2: Theory of Production Production function –Short period and long period; Law of variable proportions and returns to scale; Isoquants – Least cost combination of inputs; Returns to factors; Economies of scale; Multi-product firm; Elasticity of substitution; Euler’s theorem; Technical progress and production function; Cobb-Douglas, CES, VES and Translog production functions and their properties; Empirical work on production functions; Derivation of cost functions from production functions; Derived demand for factors. Module 3: Theory of Costs Traditional and modern theories of costs – Empirical evidence – Linear Programming – Input Output analysis. Module 4: Price and Output Determination Marginal analysis as an approach to price and output determination: Perfect competition – short run and long run equilibrium of the firm and industry - price and output determination - supply curve; Monopoly – short run and long run equilibrium, price discrimination - welfare aspects monopoly control and regulation; Monopolistic competition – General and Chamberlin approaches to equilibrium, equilibrium of the firm and group with product differentiation and selling costs, excess capacity under monopolistic and imperfect competition, criticism of monopolistic competition; Oligopoly – Non-collusive (Cournot, Bertrand, Edgeworth, Chamberlin, kinked demand curve and Stackelberg’s solution) and collusive (cartels and mergers, price leadership and basic point price system) models; Price and output determination under monopsony and bilateral monopoly; Workable competition – Structure, conduct and performance norms.

Module 5: Pricing Pricing principle – Average cost pricing – Mark up rule price determination – Limit pricing theory – Full cost pricing. REFERENCE : 1. Koutsoyiannis, A.(2000), Modern Microeconomics, (2nd Edition), Macmillan Press, London. 2. Layard, P.R.G. and Walters, A.W.(1978), Microeconomic Theory, McGrawHill, London. 3. Stigler, G.(1996), Theory of Price, PHI, New Delhi. 4. Sen, A.(1999), Microeconomics : Theory and Application, Oxford University Press, New Delhi. 5. Varian, H.R. (2000), Microeconomic Analysis, W.W. Norton, New York. ***

The aggregate supply and aggregate demand model: The Neo-classical three sector model . Module 3 : One Sector Neo-classical and Keynesisan models: Quantity theory of money – Simple Keynesian model. IS-LM model with government sector – Policy analysis in a Keynesian model – Policy analysis in a Neo-Classical Model – Fiscal policy and crowding out – Ricardian Equivalence – The role and relative effectiveness of fiscal and monetary policy.Keynes effect.The Keynesian three sector model .Pigou effect .3 credits (Hard core) Module 1 : The origin and development of Macro Economics (Before Keynes. Module 5 : An overview of open economy macro models: Monetarist model – Dual gap model – Demand constraint models – Structuralist model – North South models – Relevance to India. Module 2 : Consumption function hypothesis: Determinants of consumption – Kuznets’ consumption puzzle – Irving Fisher’s inter-temporal choice model – Relative income hypothesis – Permanent Income hypothesis – Life cycle hypothesis. Investment function: Neo-classical theory of investment – Stock market and Tobin’s Q ratio – Neo-Keynesian theory of investment. IS-LM model: The interaction of Real and Monetary sectors of the economy – Keynesian version of the IS-LM model – Neo-classical version of the IS-LM model.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- I SEMESTER (SYLLABUS) ECON 412 – MACRO ECONOMICS . Fiscal and Monetary Policy analysis in an IS-LM model. Module 4 : Unemployment and the Labour market: The demand for labor – The supply of labour – Neoclassical labour market equilibrium – Keynesian labour market – Principle of effective demand – Under-employment equilibrium. Keynesian revolution.I . and after Keynes). .

Mueller. New Delhi. II Edn. 1994. London. 2000. 1953. Macreconomics. Indian Edition. A Guide to Keynes. M. Macro Economics. Macmillan. 1978. Gregory Mankiv.Edgemond.REFERENCE: 1. Surjeet Publications. 7. P. Pearson Education. Macroeconomics. A. Harper Collins. Robert J Gorden. Chapter by Amitava Krishna Dutt(1995). Macro Economics: An Open Economy Approach.1992.T. Macroeconomics. PHI.Hansen. 4. 2. *** . Macro Economics: Theories and Policies. New Delhi. Prabhat Patnaik. New Delhi. 5. 1999. 2003 3. Richard.G. 1995. 8.H. Eric Pentacost.Froyen. McGrawHill. Readings in Macroeconomics. CBS Publishers. Oxford University Press. New Delhi. 6.

REFERENCE: 1 2 3 4 5 Yamane.(1993). New Delhi. basic and optimal solution. Unconstrained and constrained optimization in simple economic problems. New Delhi. New Delhi. Module 2 : Concept of integration.(1999). Growth rates and simple properties of time path of continuous variables. Elasticities and their types. Chiang. Simple applications. McGraw Hill. Simple rules of integration. Mathematical Analysis for Economists. Fundamentals of Applied Statistics. continuity and derivative.C. Saddle point solution. Problems of maxima and minima in single and multivariable functions. R. Solution of simultaneous equations through Cramer’s rule. Statement of basic theorems of linear programming. Interpretation of revenue. Module 5 : Linear programming – Basic concept. NewDelhi. demand.G. Concept of vector – its proerties. Operations Research. matrix inversion and rank of a matrix. Shadow prices and their uses. .4 credits (Hard core) Module 1 : Concept of function and types of functions.MATHEMATICAL METHODS . Nature of feasible. Fundamental Methods of Mathematical Economics. Mathematics for Economists. Rules of differentiation.(1974). Applications in trade cycle models.(1986).T. Formulation of the dual of a programme and its interpretation. Multivariable functions. Module 3 : Determinants and their basic properties. Value of a game. Strategies – simple and mixed.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- I SEMESTER (SYLLABUS) ECON 413 . Concept of matrix – their types.. Gupta. simple operations on matrices. Application to consumer’s surplus and producer’s surplus. Rules of partial differentiation and interpretation of partial derivatives. PHI. PHI.Chand. limit. supply functions.D. Introduction to input-output analysis. A.C. Allen. Solution of linear programming through graphical and simplex method. Its structure and variables. Concept of quadratic forms – Eigen roots and Eigen vectors. Handry. cost. Macmillan Press. A. New York. Concept of duality and statement of duality theorems. formulation of a linear programming problem. S. Taro (1975). S. Growth models and lagged market equilibrium models. Concept and types of production function. Concept of a game. Matrices and vectors. Module 4 : Difference equations – Solution of first order and second order difference equations. Simple problems in market equilibrium.

4 credits (Hard core) Module 1 : Meaning. Goodness of fit. M. Pearson’s product movement and Spearman’s rank correlation coefficients and their properties. t. Hypothesis testing based on Z.(1992). Module 2 : Methods of estimation of non-linear equations – Parabolic. modified exponential. Module 4 : Theoretical distribution of Binomial. movements and movement generating functions.G. Expectations. 2.S. mass and density functions. Theory and Problems of Statistics. Probability.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- I SEMESTER (SYLLABUS) ECON 414 . Gompertz and logistic relationships. Desirable properties of an estimator. Module 3 : Deterministic and non-deterministic experiments. REFERENCE: 1. PHI.STATISTICAL METHODS . Baye’s theorem and its applications. McGraw Hill. Chi-square distribution – F distribution. Confidence intervals and level of significance.Conditional probability and concept of interdependence. exponential. New Delhi. Type 1 and Type 2 errors. Laws of addition and multiplication. assumptions and limitations of simple correlation and regression analysis. Standard error of estimate. Mathematics and Statistics for Economists. Stratified random and concept of an estimator and its sampling distribution. Concept of the least squares and lines of regression. Monga. Yamane. Taro (1975). Module 5 : Basic concept of sampling – random and non-random sampling. Speigal. Chisquare) and F tests. Poisson and Normal distributions. Theorem of probability. Simple random. *** . New Delhi. Formulation of statistical hypothesis – Null and alternative hypothesis. Mathematics for Economists. Partial and multiple correlation and regression (applications only). London. 3. Elementary concept of random variable.Vikas Publications.(1972). geometric. Various types of events – classical and empirical definitions of probability.R.

Sustainable Development. Tobin. Patinkin and Johnson. Harrod. crisis in capitalism – Schumpeter and capitalistic development. two-sector model of Ujawa. issues of good governance. Innovation – role of credit. Hicks. instability of equilibrium. Population problem and growth pattern of population – theory of demographic transition. Malthus and James Mill. Mrs. Growth models of Kaldor and Pasinetti. . Levhari. AK model – Explanations of cross-country differentials in economic growth. Cambridge criticism of Neo-classical analysis of growth. education and research.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- I SEMESTER (SYLLABUS) ECON 417 – ECONOMIC GROWTH AND DEVELOPMENT . Population as limits to growth and as ultimate source – population. Immutable laws of capitalist development. Neo-classical growth models – Solow and Meade. surplus value and profit. labour and technology. education. Endogenous growth. learning by doing. Total factor productivity and growth accounting.4 credits (Hard core) Module 1 : Economic growth and development – Factors affecting economic growth: capital. Ricardo. Money in economic growth. profit and degeneration capitalism. structural analysis of development. Karl Marx and development of capitalistic economy – theory of social change. Growth models – Harrod and Domar. stability of equilibrium. Measuring development and development gap – Per capita income. health and nutrition.Development and underdevelopment – Perpetuation of underdevelopment. Module 2 : Technological progress – embodied and disembodied technical progress. Poverty – absolute and relative. production function approach to the economic growth.Classical theory of development – contributions of Adam Smith. Role of learning. Economic development and institutions – markets and market failure. Human development index and other indices of development and quality of life – Food security. optimal savings and Ramsay’s rule. state and state failure. Module 4 : Theories of development . golden rule of accumulation. poverty and environment. Intellectual capital. inequality of income. Module 3 : Social and Institutional aspects of development . Imperfect market paradigm. Human resource development. Joan Robinson’s growth model. The capital controversy.

Kelly et. B.) (1990). Growth Economics. circular causation. Stanford. Harmondsworth. Michael P. A.P. 4.Module 5 : Approaches to development . Thirlwal (1999). London. Dependency theory of development. Dualism – technical. Todaro (1996). *** . Economic Development. Theories of Economic Growth and Development. I. 5. Model. Adelman (1961). 2.Partial theories of growth and development – vicious circle of poverty. Ranis and Fie model. unbalanced growth. 3. low income equilibrium trap. Higgins (1959). Stanford University Press. Growth and Development. Dixit and Marglin model. W. al. Norton. Structural view of development. New Delhi.K.W. behavioural and social. London. Sen (Ed. critical minimum effort thesis. REFERENCES : 1. balanced growth. Penguin. MacMillan. A. Economic Development. big push. unlimited supply of labour. Longman.

. (1995) Economic Theory and operations Analysis. McGrawHill.II . REFERENCE : 1.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- II SEMESTER (SYLLABUS) ECON 421 – MICRO ECONOMICS . Kalecki and Kaldor’s. Williamson’s model of managerial discretion. relationship between relative commodity and factor prices (Stolper-Samuelson theorem). New Delhi. Layard.3 credits (Hard core) Module 1: Alternative Theories of the Firm Critical evaluation of marginal analysis. Theory of distribution in imperfenct product and factor markets. W. Prentice Hall. the economics of insurance. Varian. Social welfare function.(1996) Theory of Price (4th edition). Module 4: General Equilibrium Partial and general equilibrium. Inability to obtain optimum welfare – Imperfections. effect of changes in factor supply in closed economy (Rybczynski theorem). mean-variance analysis and portfolio selection.R (2000). H. interest and profit. uncertainty and non-existent and incomplete markets. 5.Browning (1998). decreasing costs. (2nd Edition).G. Walrasian excess demand and input-output approaches to general equilibrium existence . relationship between output mix and real factor prices. East West Press. The economics of search – Different models.W. Elasticity of technical substitution. A. and Walters. optimal consumption under uncertainty. 8. Microeconomic Theory. the efficient market hypothesis. (1993) Microeconomics. Product exhaustion theorem. 4. Macro theories of distribution – Ricardian. market failure. (1999). Market with incomplete information. Norton. competitive firm under uncertainty. The Drydon Press. risk pooling and risk spreading. New Delhi. Sen. P. Rawl’s theory of justice. New York. Value judgement. G. 6. Kalyani Publisher. W. coalitions and monopolies. 9.R. expected utility and certainty equivalence approaches. London. stochastic models of inventory demand. Microeconomics: Theory and Application. 7. (2000) Modern Microeconomics. income distribution. homogeneous functions. (1978). Compensation principle. Marxian. Oxford University Press. Microeconomic Theory. production and consumption. Production without consumption – One sector model.general equilibrium.A. technical progress and factor shares. . Macmillan Press. Behavioural model of Cyrt and March. Module 2: Distribution Neo-classical approach – Marginal productivity theory. Microeonomics: Theory and Applications. wages. Module 5: Economics of Uncertainty Individual behaviour towards risk.S. 2. Determination of rent.Rubinfeld.M. risk and risk aversion – Sensitivity analysis. Baumol. Baumol’s sales revenue maximization model. B.J..Pindyck and D. Microeconomic Analysis. Stigler.K. London. A. The economics of information. Pareto optimal conditions. Theory of Second Best – Arrow’s impossibility theorem. cost and risk. Koutsoyiannis. New York. Production without consumption – Two sector model.stability and uniqueness of equilibrium . London. London. PHI. New Delhi. E. Nicholson Walter. Marris model of managerial enterprise. Browning and J. Module 3: Walfare Economics Pigovian welfare economics. (1978). gambling and insurance. equity-efficiency trade off.W. search and transaction cost. 3. factor demand under price uncertainty.

London. Module 3 : Inflation and unemployment – The Phillips relation – The expectation augmented Philips curve – The natural rate of unemployment hypothesis – Adaptive expectation hypothesis. Module 2 : Post Keynesian demand for money theories – inventory theory of Baumol – portfolio balance theory of Tobin – Restatement of the quantity theory as a theory of demand for money by Friedman – Supply of money theories – Money multiplier model – Behavioural model of money supply – Endogenous money supply theory. Brian Snowdown and Howard Vane (1997). 2. .3 credits (Hard core) Module 1 : Walrasian and Non-Walrasian approaches in Macroeconomics – the classical Heritage – Says’ Equality and Says’ Identity – Walras’Law – Walrasian system – Patinkin and Real Balance Effect – Arrow – Debreu model – Overlapping Generation Model of Samuelson – Cash in Advance Model of Clower. – Theories of business cycles – Multiplier – Accelerator interaction model – Real business cycle theory – The political business cycle model of Nordhaus. OUP. Monetary Economics. London. A Macroeconomics Reader. New York. London.W. Jagadish Handa (2000). Merin K Lewin and Paul D Mizen (2000). Module 4 : Re-interpretation of Keynes by Clower and Leijonhufvud – The dual decision hypothesis – Rationing models of Barrow. 3. Monetary Economics. Routledge. Grossman and Malinvaud – Monetarist contributions – An overview of major themes in Monetarism – The new classical macroeconomics – Rational expectation hypothesis – Lucas’ surprise supply function – The inter-temporal substitution model – Policy ineffectiveness argument – The Lucas critique – Post Keynesian Macroeconomics – Basic themes – The historical time conceptKalecki’s pricing theory – The New Keynesian school – Micro foundations of macroeconomics – Small menu cost model – Implicit wage contract model – Efficient wage theories – Insider-Outsider model – The new growth or endogenous growth theory. R. 4.Clower (1969). Routlege. Monetary Theory. Penguin.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- II SEMESTER (SYLLABUS) ECON 422 – MACRO ECONOMICS-II . REFERENCE : 1.

Problem of auto-correlation – application. meaning and scope of econometrics. . Module 2: Problems in Regression Analysis Problems of heteroscedasticity. Simple and general linear regression model – assumptions.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- II SEMESTER (SYLLABUS) ECON 423 – BASIC ECONOMETRICS . piece wise linear regression. interaction effects. Methods of estimating simultaneous equation system. adaptive expectations. partial adjustment model. Theory of Econometrics. Module 3: Regressions with Qualitative Independent Variables Dummy variable technique – Testing structural stability of regression models comparing to regressions. Harvard University Press. Causality test.T. The identification problem. regression with dummy dependent variables. Problems of specification error. Granger test and Sim’s test. Instrumental variables. Estimation (through OLS approach) and properties of estimators. Module 4: Dynamic Econometric Model Auto-regressive and distributed lag models – Koyak model. use of dummy variables. Module 5: Simultaneous Equation Models Introduction and examples.(1977). Logit. Error in measurement. Recursive methods and OLS. Concept and analysis of variance approach and its application in regression analysis. Probit and Tobit models – applications. Amemiya. (1985). The simultaneous equation bias and inconsistency of OLS estimators. REFERENCES : 1 2 Koutsoyiannis. Advanced Econometrics. Indirect least squares (ILS). The LPM. 3SLS and ML methods – applications.4 credits (Hard core) Module 1: Basic Econometrics Nature. Concepts and derivation of R2 and adjusted R2. Gauss-Markov theorem. London. Almon approach to distributed lag models. 2SLS. seasonal analysis. Macmillan Press. Rules of identification – order and rank conditions. A. London. Multicollinearity and auto-correlation.

PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- II SEMESTER (SYLLABUS) ECON 424 – PUBLIC ECONOMICS . Structure and growth of public expenditure. Theory of grants. Fiscal policy for stabilization – Automatic vs discretionary stabilization. removing distributional inequalities and regional imbalances. theory of club goods. Poverty alleviation. Demand revealing schemes for public goods – Tiebout model. Theory of measurement of dead weight losses. Module 6: Fiscal Federalizm Principles of multi-unit finance. Budgetary deficit and its implications. Debt through created money. Transfer of resources from Union and States to local bodies. Balanced budget multiplier. Devolution of resources and grants. Theory of optimal taxation. Sources of public debt. Problems of states’resources and indebtedness. Social cost-benefit analysis – Project evaluation. Constitutional provisions. Wiseman-Peacock hypothesis. redistribution of income and wealth. Benefit and ability to pay approaches. Alternative concepts of incidence – Allocative and equity aspects of individual taxes. Pure theory of public expenditure. Module 4: Public Debt Classical view of public debt. Principles of debt management and repayment. Excess burden of taxes. Uncertainty and expectations. . Fiscal federalism in India. anti-inflation. Trade-off between equity and efficiency. Alternative measures of resource mobilization and their impact on growth. Estimation of costs.4 credits (Hard core) Module 1: Rationale for Public Policy Allocation of resources – Provision of public goods. Voluntary exchange models. Module 3: Taxation Theory of incidence. Interdependence of fiscal and monetary policies. Criteria for public investment. distribution and prices. economic growth. discount rate. Reforms in expenditure budgeting. Module 2: Public Expenditure Wagner’s law of increasing state activities. Centre-State financial relations in India. Assignment of function and sources of revenue. Public borrowings and price level. Finance Commission. Compensatory aspect of debt policy. Impossibility of decentralized provision of public goods (contributions of Samuelson and Musgrave). Social goals. Stabilization Policy – Keynesian case of stabilization policy. Resource transfer from Union to States – Criteria for transfer of resources. Programme budgeting and Zero base budgeting. The problem of double taxation. Burden of public debt. Module 5: Fiscal Policy Objectives of fiscal policy – full employment. Provision of infrastructural facilities. Crowding out of private investment and activity. Liquidity preference. Vertical and horizontal imbalances. Failure of inter temporal markets.

Musgrave.E.B. Herber.Irwin. Siglitz (1980). New Delhi.P. 4. 3. Tokyo. New York. Jha.A. and J.TMH. Modern Public Finance. Richard D. London. R. (1967). Modern Public Economics. and P. Atkinson. Kogakusha. 2. Homewood.REFERENCES 1. Public Finance in Theory and Practice.(1998). McGraw Hill. TMH.(1986). Goode.Musgrage (1976). A. . Lectures on Public Economics. Routledge. B. 5.B. R. R. Government Finance in Developing Countries.

Volatility testing.Liquidity preference theory of the term structure – Market segmentations theory of the term structure – Estimating the expected return of a bond for portfolio analysis. Module 2: Risk: Risk vers Return and VaR: Value at Risk Trade-off between risk and return (the Markowitz model) – Efficient frontier of risky assets – Vaue at risk of a portfolio – Computing VaR-Definition of VaR. Module 5: Models of Securities Prices in Financial Markets Single period models – Asset dynamics – Portfolio and Wealth process – Multi-period models – General model specifications – Cox-Ross Rubinstein Binomial model – Continuous time models – Simple facts about the Merton Black-Scholes model – Brownian Motion process – Diffusion process – Stochastic Integrals – It^o’s rule. the time left to expiry and their strike price) – put – call parity relationship. Module 8: Option: Features and Price Bounds Basic taxonomy of option analysis – Payoff structure of an option – Price Bounds for Option (depending on their type. Module 4: Term Structure of Interest Rate Drawing the term structure – Methods of computing the yield to maturity – Market expectations theory of the term structure – yield curve analysis .3 credits (Hard core) Module 1:Expected Utility Theory and Choice under Uncertainty The Economic properties of utility functions – concept & measures to model attitudes towards risk – Expected utility maximization – Risk aversion – Motivation – First order stochastic dominance – Second order stochastic dominance – Stochastic dominance Vs dominance.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- II SEMESTER (SYLLABUS) ECON 427 – FINANCIAL ECONOMICS .risk: Risk versus return: Mean-variance analysis. . Module 6: Efficient Market Hypothesis (EMH) Three forms of EMH and their implications for financial markets – Random walk – Martingles. Module 7: Volatility in Financial Markets Causes of Volatility . Module 3: Capital Asset Pricing Model and Arbitrage Pricing Model Security market line – Standard and Zero Beta CAPM – Empirical evidence on CAPM – Deriving APT – Measuring performance using APT.

J. Modern Investment Theory. Cvitanic and Zapatero F (2004). A. Futures and Option Markets.C. 6. J.basic notion of Binomial . Investments.Rho means. R. E. J. Z. London.Module 9: Option : Pricing theory Risk Neutral pricing . Cambridge. Gruber. . REFERENCES : 1. Irwin McGraw – Hill. Elton and M. 3. Fifth Edition. Hull (2004). Prentice Hall. D. London. Prentice-Hall. Haugen (2001).J. New Jersey. MIT Press. 4.Black-Scholes Pricing . Modern Portfolio Theory and Investment Analysis. 2. 5. Luenberger (1998). New Jersey. Oxford University Press. London.Multinomial . Investment Science.J. Marcus (2004). Kane and A. Bodie.G. New York.A. Introduction to Economics and Mathematics of Financial Markets. Wiley.Gamma – Vega Theta .What the hedge ratio (‘Delta’) .

Theorem of factor price equalization. The political economy of non-tariff barriers and their implications. Module 2: Measurement of Gains and Theory of Interventions Measurement of gains from trade and their distribution. comparative advantage and opportunity costs . Foreign trade multiplier with and without foreign repercussions and determination of national income and output. their uses and limitations. Policies for achieving internal and external equilibrium simultaneously under alternative exchange rate regimes. The Rybczynski theorem – Concept and policy implications of immiserizing growth. Quotas and Non Tariff Barriers). terms of trade. employment. fixed exchange rates and flexible exchange rates. changes in tastes. Empirical testing of theory of absolute cost and comparative cost – Heckscher-Ohlin theory of trade . Module 3: Balance of Payments Meaning and components of balance of payments. Equilibrium and disequilibrium in the balance of payments. Nominal. Welfare implications – Empirical evidence and policy issues.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- III SEMESTER (SYLLABUS) ECON 511 – INTERNATIONAL TRADE AND PAYMENT . Hypothesis of secular deterioration of terms of trade. Theory of interventions (Tariffs. Balance of payments on trading partners both in partial and general equilibrium analysis. Causes of emergence and measurement of intra-industry trade and its impact on developing economies. i. Trade under imperfectly competitive market. Expenditure-reducing and expenditureswitching policies and direct controls for adjustment. Role of dynamic factors. effective and optimum rates of tariffs – their measurement. Economic effects of tariffs and quotas on national income. A critical review of the monetary approach to the theory of balance of payments adjustment. impact and welfare implications. Relative merits and demerits of fixed and flexible exchange rates in the context of growth and development in developing countries. Process of adjustment under systems of gold standard.. .e.Kravis and Linder theory of trade. income distribution.4 credits (Hard core) Module 1: Theory of International Trade The pure theory of international trade – Theories of absolute advantage. technology and factor endowments in explaining the emergence of trade.Modern theory of international trade. Concepts of terms of trade. its empirical relevance and policy implications for less developed countries. Trade as an engine of economic growth. output.

International Economics. New York. Routledge Publications. (2000).S. M. Need. employment and growth. Recent changes in the direction and composition of trade and their implications. adequacy and determinants of international reserves. Reforms for the emergence of trading blocks at the global level. (1999). Theory of short-term capital movements and East Asian crisis. Module 5: Trade policies in India Trade problems and trade policies in India during the last five decades. London Carbough. Rise and fall of gold standard and Bretton-Woods system.Module 4: The theory of Regional Blocks Forms of economic cooperation. European Union. Problems of India’s international debt. London. (1997). India and developing countries. Salvatore. Conditionality clause of IMF. D. 03. IMF. Rationale and economic progress of SAARC/SAPTA and ASEAN regions. Problems and prospects of forming a customs union in the Asian region. 04. Instruments of export promotion and recent import and export policies and agenda for future. Working and regulations of MNCs in India. 02. Dana. International Economics. Cambridge University Press. Rationale and impact of trade reforms since 1991 on balance of payments. Functions of GATT/WTO (TRIPS/TRIMS). International Economics. Static and dynamic effects of a customs union and free trade areas. J (1981). International Monetary System. UNCTAD. REFERENCES : 01. . Bhagwati. International Trade. PHI.J. R. World Bank and Asian Development Bank – Their achievements and failures.

AMER. Applied Econometrics. R. . work participation rate and family planning adoption. Econometrics. MacMillan Publishers Ltd.. Module 5: Economic forecasting – Methods of forecasting – Limitations. Journal of Quantitative Economics. 1979.4 credits (Hard core) Module 1: Inference – Problems in non-experimental science – Criteria for model specification. 2.. London. Koutsoyanis. Translog and CES production function – Measurement of partial and total factor productivity. References: 1. Module 4: Identification – Market model – Simple Keynesian model – Estimation and testing.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- III SEMESTER (SYLLABUS) ECON 512 – APPLIED ECONOMETRICS . Raw and Miller. 1959. PHI. Module 6: Application of econometric tool in verification of selected economic topics – Wagner’s law of public expenditure – Various methods of estimation of elasticities in taxation – Demand for money – Inflation–output trade off – Export led growth strategy hypothesis – Inter-relationship between fertility rate. Delhi. Module 2: Consumer behaviour – Derivation of demand functions and theoretical restrictions – Specification and estimation of demand functions – Elasticities – Engel curve. 4. 3. Module 3: Producer’s behaviour: Specification and estimation of production function – CobbDouglas.L.

Matrices and Functions Working with scalars – Getting information from RATS – The RATS Data types – Basic Data types – The Aggregate Data types – Matrix calculations. Grunfeld’s investment equations. Polynomial distributed lags – Example 5.1.2. Census data – National Health and Family Welfare reports.Testing for Heteroscedasticity – Serial correlation – Granger – Sims casuality/Exogeneity tests – Chow or structural stability tests. Use of SUR. Module 2 : Dealing with Data The tools – Where are your data now? Missing data – RATS format – Error messages – Familiarity with different data base such as: PROWESS. Choosing lag length information criteria – Example 5. . Generalized instrumental variables. Module 3 : Graphics Displaying graphs on the screen – Saving and operating graphs – Printing graphs – Labeling graphs – Overlay (two scale) graphs – Multiple graphs on a page.4. Module 4 : Scalars.1 – Instrumental variables – Example 5.1. A framework – Heteroscedasticity – Serial correlation – Example 5. HBS. .3. Module 5 : Linear Regression Annotated regression output – Extensions to linear regression. National Sample Survey Organisation reports.3 credits (Soft core) Module 1 : Overview of computer – Basic operating instructions – Describing the data to RATS and Eviews software packages – SPSS – Reading the data – Computing statistics – Displaying the data – Data transformations and creating new series – Graphing the data – Using SRC file in the RATS package. Capital online.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- III SEMESTER (SYLLABUS) ECON 513 – COMPUTER APPLICATION IN ECONOMIC ANALYSIS . Module 6 : Hypothesis Testing Example 6. Module 7 : Non Linear Estimation General principles and problems – Newton-Raphson and related methods – Setting up your model. Example 7. Module 8 : Introduction to Forecasting Introduction – Forecast performance – Univariate forecasting – Box-Jenkins models – ARIMA procedures. Non-linear least squares/Two stage least squares.

John Wiley & Sons. and Jenkins. G. Module 10 : Special Models and Techniques ARCH and related models – The standard models – Trouble shooting ARCH/GARCH models – EGARCH – GJR.1.M. *** . Testing lag length – Graphing an impulse response function. J. (1994).E.P. Holden Day. Princeton University. REFERENCES : 01. Princeton. Hamilton. San Francisco. New York. (1976).1. Panel and related data sets. 02. Module 11 : Cross Section and Panel Data Probit and Logit models – Example 11. G. Forecasting and Control. Applied Econometric Time Series (1995). Time Series Analysis.Module 9 : Vector autogressions Setting up a VAR – Example 9. 03. Box. Time series Analysis.

Methodology and Techniques of Social Research. Bombay. theories and concepts in social science research – Deductive and inductive methods – stages of scientific method – Case study method – Schedule and questionnaire – Principle underlying construction of a questionnaire – Tabulation – Diagrammatical representation. Module 3 : Survey research and scaling – Types of survey – Selecting the survey method – Construction the survey method. Himalaya Publishing House. Module 2 : Facts.J.K..S. W. Bhandarkar. 1963. Wilkinson and P. 4. Chi-square test and Normal distribution test – ANOVA Module 5 : Report writing – Steps – Bibliography – Qualities of a good thesis. Kothari. C. Hatt. New York. 2002. 2. REFERENCES : 1. 1979. Research Methodology.L.G. McGraw Hill.3 credits (Hard core) Module 1 : Meaning of research – Importance – Objectives of research – Formulation of research problem – Formulation of hypothesis – Research design – Features of good research design – Pure and applied research – Evaluation of research – Research in Social Sciences. *** . T. Wiley Eastern Ltd. Methods in Social Research. Cochran. 3. Goode and P.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- III SEMESTER (SYLLABUS) ECON 514 – RESEARCH METHODOLOGY . Sampling Techniques. Module 4 : Hypothesis formulation – testing-t. W. New Delhi. 1952. New York.R. John Wiley.

Factors determining demand for energy.3 credits (Hard core) Module 1 : Infrastructure and economic development – Infrastructure as a public good. Development of social services in the successive Indian plans. Module 6 : Organisation and financing of supply of social services. Cost functions in the transport sector. Energy modeling. Recent debate about the fixation of prices of social services. Marginal cost pricing vs. Principles of decreasing costs in telephone industry – Characteristics of postal services. Module 3 : Rate making in telephone utilities. Private vs public sector financing. The search for an optimal energy policy in the Indian context. Economies of scale of joint supply. The peak load.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- III SEMESTER (SYLLABUS) ECON 527 – ECONOMICS OF INFRASTRUCTURE . Effects of energy shortages. Energy conservation. Pricing problem. Demand for transport – Models of freight and passenger demand. Special problems of individuals modes of transport. financing water utilities Urban and rural water supply. Module 5 : Bulk supply and pricing of electricity – The relative economics of thermal. Measurement of standards of service in telephone and postal utilities. other methods of pricing in public utilities. Module 2 : The structure of transport costs and location of economic activities. . Inter-model condition in the Indian situation. Model choice. hydel and nuclear power plants – The case for a National Power Grid. Criteria for fixation of postal rates. Module 4 : Primacy of energy in the process of economic development. The exploitation of National Gas. Cross subsidization – free prices. equity and efficiency. renewable and nonconventional sources of energy. Dual principle controversy. Principle of pricing. Off load problem. Special characteristics of public utilities. Social and physical infrastructure.

Approaches to educational planning. Financing of health care and resource constraints . illiteracy and lack of information. Crew. primary education. Kleindorfer (1979). 04. Structure of higher education and problems of its financing in India. 03. Economic dimensions of health care – Demand and supply of health care.R.Determinants of health – Poverty.VI.S. New Delhi. social demand. Parikh. and P. Public Utility Economics. . New Delhi. MacMillan. K. National Council of Applied Economic Research. REFERENCES : 01. Institutional issues in health care delivery. The case for universal. ICSSR. Economics of Infrastructure (1976). M. India Development Report 1999-2000. ICSSR. Human resources and human capital development – The issues in education policy. malnutrition.Inequalities in health – Class and gender perspectives.Module 7 : Education and economic growth. (1999). 02. 1996. Health dimensions of development . India Infrastructure Report : Policy Implications for Growth and Welfare.A. New York. free. Oxford. rate of return and manpower balance approaches. Vol.

.

O. Agricultural finance policy. Issues in food security – policies for sustainable agriculture . Module 4: Public Finances : Fiscal federalism – Centre-state financial relations. Role of State. Terms of trade between agriculture and industry. Poverty and Inequality. Growth and pattern of industrialization. Parallel economy. Financial sector reforms. Globalisation of Indian economy. Indicators of development – PQLI. Environment. Human Development Index (HDI). market and other institutions. Finances of state governments. Technological change in agriculture – pricing of agricultural inputs and output. Financing of infrastructure – Financial Institutions.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- IV SEMESTER (SYLLABUS) ECON 521 – INDIAN ECONOMIC DEVELOPMENT AND POLICY . Failures and achievements of Plan. W. Social infrastructure – education and health. Need for and issues in good governance. Module 3: Agriculture and Industry : Institutional structure – land reforms in India. Rationale of internal and external reforms.T. Module 2: Demographic Features. Fiscal sector reforms in India. Rural-urban migration. and its impact on different sectors of the economy. Agricultural marketing and warehousing. Module 5: Money. Small scale sector. Banking and Economic Reforms Analysis of price behaviour in India. Poverty and Inequality Broad demographic features of Indian population. gender development indices . Approaches for employment generation.Objectives and strategy of planning. Finances of central government. Productivity in industrial sector. Problems relating to fiscal policy. . Problem of sick units in India. Privatisation and disinvestment debate. Money and capital markets. Interest rate policy.industrial policy. Issues in competition and safety nets in Indian economy. Urbanization and civic amenities. Energy. Public sector enterprises and their performance. Working of SEBI in India. Review of monetary policy of RBI.4 credits (Hard core) Module 1: Economic Development and its Determinants Approaches to economic development and its measurement – sustainable development. Exit policy – issues in labour market reforms.

Amritsar. Little (Eds) (1999). Oxford University Press. J. Deep and Deep Publications. Bawa. 3. New Delhi.M.REFERENCES: 1. Bardhan. and P. Development Planning: The Indian Experience. the Political Economy of Development in India. and I. Oxford University Press. New Delhi. Datt. Ahluwalia. Structural Changes in Indian Economy.(1987). (1997). 5. New Delhi.S. New Delhi. S. Second Generation Economic Reforms in India. Gurunanak Dev University Press. Chakravarty. P. (1999).K. 2. R.D. 4. Oxford University Press. India’s Economic Reforms and Development. Raikhy. *** . R.S. (2001). I.

2. Module 5: Regional imbalances – Regional economic advantages and regional optimization and financial institution in India – Inter-state disparity and fiscal devaluation in India – Problems of developing the backward area – Regional planning in India during the plan period – Area approach . 4. New Delhi. London. REFERENCES: 1. P. New Delhi. Economic theory and Underdeveloped Regions. Sector theory (ColinKuznets) . (2001). Module 3: Theory of location – Weber’s theory of location – Spatial dispersion of progress – Dispersion of innovation and technical progress – Sectoral growth centres – Area – Urban bias. Module 2: Theories of regional economic development: Cumulative causation (Perroux. Development Experience in the Indian Economy.P (1974). Myrdal G (1968). Vikas.Stage theory (Rostow). Misra R. Richardson (1960).Central place theory (Christaller). Vora. Elements of Regional Economics. Bookwell. Myrdal. New Delhi.Integrated overall development – Regional planning in rural India under various plan period. Regional Development Planning in India.3 credits (Hard core) Module 1: Objectives and scope of regional economic analysis – Inter-disciplinary aspects of regional economics – The regional economic problems – Causes. Module 4: Regional disparities – Trends in regional income disparities – Inter-state variations of poverty and unemployment – Comparative analysis of industrial development in different states – Agricultural development in different stages.R. Hirschman) – Export base theory . and Panchmukhi.PONDICHERRY UNIVERSITY DEPARTMENT OF ECONOMICS ------------------------------------------------------------------------------------------------------- IV SEMESTER (SYLLABUS) ECON 522 – REGIONAL ECONOMICS . Brahmananda. 3. . Penguin Books.

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