COURSE STRUCTURE MA APPLIED ECONOMICS - … · MA APPLIED ECONOMICS MICRO ECONOMICS MEC 131 /...

COURSE STRUCTURE 2011 -2013 MA APPLIED ECONOMICS I SEMESTER (New) Course Title Hours /

Week Marks Credits

MEC 131 Micro Economics 4 100 4 MEC 132 Macro Economics 4 100 4 MEC 133 Mathematical Methods For Economics 4 100 4 MEC 134 Agricultural Economics 4 100 4 MEC 135 Development Economics 4 100 4 MEC 136 Financial Economics 4 100 4 TOTAL 24 24 II SEMESTER (New)

Course Title Hours / Week

Marks Credits

MEC 231 Institutional Economics 4 100 4 MEC 232 Monetary Economics 4 100 4 MEC 233 Statistics 4 100 4 MEC 234 Mathematical Economics 4 100 4 MEC 235 International Economics 4 100 4 Electives MEC 241A Economics of Banking and Insurance 3 100 3 MEC 241B Strategic Management 3 100 3 TOTAL 23 23 III SEMESTER (New)


Marks Credits

MEC 331 Public Economics 4 100 4 MEC 332 Econometrics 4 100 4 MEC 333 Research Methodology 4 100 4 MEC 334 Health Economics 4 100 4 MEC 335 Indian Economy – policy & issues 4 100 4 Electives MEC 341A Security Analysis & Portfolio

Management 3 100 3

MEC 341B Marketing Management 3 100 3 TOTAL 23 23 IV SEMESTER (New)


Marks Credits

MEC 431 Operations Research 4 100 4 MEC 432 Labour Economics 4 100 4 MEC 433 Industrial Economics 4 100 4 MEC 434 Environmental Economics 4 100 4 MEC 435 Dissertation 4 100 4 Electives MEC 441A Derivatives 3 100 3 MEC 441B Human Resource Management 3 100 3 TOTAL 23 23

MA APPLIED ECONOMICS MICRO ECONOMICS

MEC 131 / SEMESTER I 4 Hours / Week 4 Credits

Course objectives:

This paper introduces students to both the traditional as well as modern theoretical concepts in Microeconomics as a progress from the undergraduate course. It aims to equip students with a rigorous and comprehensive understanding of the fundamentals in microeconomics. Secondly it also aims to provide a fundamental understanding to the theory of the firm and welfare economics.

UNIT I – Introduction (02 hour)

a) Economic models & Classification of markets. UNIT II – Theory of Consumer Behaviour (15 hours)

a) Demand Analysis: - Revealed Preference Theorem of Samuelson - Slutsky’s Theorem &equation – Choices involving risk: St. Petersburg Paradox and Bernoulli’s Hypothesis, Friedman–Savage Hypothesis, Markovitz Hypothesis, Neuman-Morgenstern Method: Utility Index, The investors choice problem.

b) Recent developments: Constant elasticity of demand model -Distributed Lag Models - Linear Expenditure system.

UNIT III – Theory of Production and Costs (04 hours)

a) Production function: Expansion path - product lines – technical progress and production function.

b) Modern Theory of Costs – Engineering Cost.

UNIT IV – Market Structure and Pricing (25 hours)

a) Monopolistic Competition: Chamberlain approaches to equilibrium, equilibrium of the firm and the group with product differentiation - selling costs and advertising - excess capacity under monopolistic competition & criticism of monopolistic competition.

b) Oligopoly and Duopoly models: Collusive and non – collusive models: Cournot, Bertrand, Chamberlain, Sweezy, Stackelberg models, Cartels, Price leaderships.

c) Monopoly: welfare aspects, monopoly control and regulation. d) Theories of the Firm: Baumol, Williamson and Marris models.

UNIT V - Welfare Economics (14 hours)

a) Introduction - Pareto’s optimality. (only up to Edgeworth Box Diagram) b) New Welfare Economics: Compensation principle: Hicks, Kaldor and Scitovsky. c) Social Welfare Functions: Bergson and Samuelson.

Required Readings:

1. Koutsoyiannis, Modern Micro Economics, ELBS, Macmillan. 2. Taylor, John. B & Gugnani, Ritika, Principles of Microeconomics, 5th Ed, (2008),

Biztantra. 3. Sloman, John, Economics, 6 Ed, (2008), Pearson Education (LPE). 4. Case, Karl.E & Fair, Ray. C, Principles of Economics, 8th Ed, (2007), Pearson Education

(LPE). 5. Pindyck & Rubinfield, Micro Economics, Prentice Hall, India. 6. Sen, Anindya, Microeconomics – Theory and Application, 6th Ed, (2004), Oxford

University Press. 7. Peterson, Craig H., Lewis, W. Cris & Jain, Sudhir K., Managerial Economic, 4th Ed,

(2007), Pearson Education. 8. Boyes, Willian, Managerial Economics, Biztantra. 9. Boyes, Willian & Melvin, Michael, Textbook of Economics, 6th Ed, Biztantra. (Indian

Adaptation) 10. H L Ahuja Advanced Economic Theory – Microeconomic Analysis, S. Chand.

Recommended Readings:

1. Hal R Varian, Intermediate Micro Economics – A Modern Approach, (3rd Ed) Affiliated East West Press.

2. Dominick Salvatore, Managerial Economics. 3. Dominick Salvatore, Micro Economics. 4. Ferguson & Goulds, Micro Economic Theory, Irving Publications, All India Traveller

Book Sellor, Delhi, 1996. 5. Robinson, Joan, The Economics of Imperfect Competition. 6. Samuelson & Nordhus, Economics. 7. Dobb M, Theories of Value and Distribution since Adam Smith. 8. Kaldor, Essays on value and Distribution. 9. Amartya Sen, Development as Freedom.

MA APPLIED ECONOMICS MACRO ECONOMICS

MEC 132 / SEMESTER I 4 Hours / Week 4 Credits Course Objectives: a. Students will be able to identify the determinants of various macroeconomic aggregates such as output, unemployment, inflation, productivity and the major challenges associated with the measurement of these aggregates. b. Students will be able to discuss the linkages between financial markets and the real economy, and how these linkages influence the impact of economic policies over differing time horizons. c. Students will be able to describe the main macroeconomic theories of short term fluctuations and long term growth in the economy.

d. Students will be able to critically evaluate the consequences of basic macroeconomic policy options under differing economic conditions within a business cycle.

UNIT I: Introduction (15 Hours) What macroeconomics is about- Theory as model building- Prices: flexible vs. sticky- Microeconomic thinking and macroeconomic models-Measuring the value of economic activity: GDP- Real vs. Nominal GDP- GDP deflator-savings and Wealth-: Measures of Aggregate saving- The uses of private saving-Measuring the cost of living: The consumer price index- Measuring joblessness: The unemployment rate- Classical theory of output and employment- Keynesian theory of income determination UNIT II: Consumption, Saving and Investment (10 Hours) Consumption and Saving: Keynes and the consumption function-Modigliani and the life cycle hypothesis-Milton Friedman and Absolute income hypothesis and the Permanent income hypothesis- Robert Hall and Random Walk Hypothesis- Investment: Investment decision-Desired capital stock-Changes in interest rate-MEC and Capital Accumulation UNIT III: Inflation and Unemployment (10 Hours) Inflation: Measures- Classical and Neo-classical theories of inflation- Keynesian and monetarist views on inflation-Unemployment: Natural rate of unemployment- Job search and frictional unemployment- Real wage rigidity and Structural unemployment- Inflation, unemployment and Phillips curve-Adaptive expectations and inflation inertia-disinflation-rational expectations UNIT IV: Business Cycles (15 Hours) Cyclical behaviour of economic variables-leading indicators- Aggregate demand: Explaining fluctuations with the IS-LM model-IS-LM as a theory of aggregate demand-Aggregate demand in the open economy- Mundell- Fleming Model- Small open economy under floating and fixed exchange rates-Aggregate supply- Sticky wage model-imperfect information model-sticky price model UNIT V: Post Keynesian Macroeconomics (10 Hours)

Monetarism-The new classical macroeconomics-Supply side economics-Advances in business cycle theory: The theory of real business cycles-New Keynesian economics-small menu costs- efficiency wages theory-insider-outsider model-implicit contract model-coordination failures References: 1. N. Gregory Mankiw, Macroeconomics, Worth Publishers 2. Dornbusch, Fischer, Startz, Macroeconomics, Tata Mc Graw Hill 3. H.L. Ahuja, Macroeconomics:Theory and Policy, Advanced economic analysis, Sultan Chand Publishers. 4. D.N. Dwivedi, Macroeconomics:Theory and Policy, Mc Graw Hill. 5. Levacic and Rebman -Macro Economics-An Introduction to Keynesian and Neo-Classical Controversies 6.Brain Snowdown, Howard Vane and Peter Wynarczyk -A Modern Guide to Macro Economics: An Introduction to Competing School of Thought 7. Edward Shapiro - Macro economics 8. Ackley.G. – Macro economics

PAPER: MEC 133 MATHEMATICAL ECONOMICS

MA APPLIED ECONOMICS SEMESTER I

4 Hours / week 4 Credit

COURSE OBJECTIVE

This course introduces basic mathematical tools needed for post graduate study in economics. The course aims at introducing the students to basic mathematical concepts and methods necessary to begin with the core courses. The course will emphasize intuition and problem-solving over rigor.

Unit I (12 Hours)

Basic concepts, Number system - Properties of real numbers - Theory of indices - Basic rules. Pareto’s Law of distribution. Set Theory – Basic operations on sets – The Cartesian product. Elementary algebra - Factorization Linear and Quadratic Equations, Simultaneous Equations - Understanding the nature of Cubic function, power function, Exponential and logarithmic functions. Interest compounding and compounding growth rates. Functions, Graphs, slopes and intercepts.

Unit II (12Hours)

Limits - continuity- derivatives - Rules of differentiation - Higher order derivatives - Implicit differentiation - partial differentiation – Cross partial differentiation, Marginal concepts. Elasticity, concavity and convexity ,Inflexion points. Differentiation of Exponential and Logarithm Functions

Unit III (8 Hours)

Maxima and Minima - single and multivariable functions, constrained optimization and unconstrained optimization, Langrange Multiplier Method.

Unit IV (8Hours)

Matrices – Addition - subtraction – Multiplication - Determinants – Inverse Matrices – solving linear equations with the inverse – Crammer’s rule –Input output model, Technical output coefficients

Unit V (10 Hours)

Integral calculus – Rules of integration, Definite Integral, Evaluation of integrals. indefinite integral, some standard forms, integration by substitution, irrational functions, the area under a curve as definite integral, the properties of definite integral.

Unit VI (10 Hours)

Differential equations – Solutions, non-linear differential equations of the first order and first degree – Variable and Separable case, Differential equation with homogeneous coefficients, exact differential equations - Linear differential equations of the first order. Difference equations – General formula for first order linear equations

Required readings

1. Allen, R.G.D. (1976). Mathematical Analysis for Economists, Macmillan. 2 Yamane, T. (1973). Mathematics for Economists, Prentice Hall, New Delhi 3. Edward T Dowling “ Introduction to Mathematical Economics” McGraw Hill Ltd .,

NewYork. 4. Chiang, A.C. (1974). Fundamental Methods of Mathematical Economics, McGraw Hill and

Kogakusha, New Delhi. Additional Reading List 1. Baumol, W.J. (1977). Economic Theory and Operations Analysis, Prentice Hall. 2. Lewis, J.P. (1978). Introduction to Maths for students of Economics., Macmillan,

London. 3. Samuelson, P.A. (1967). Foundations of Economic Analysis, McGraw Hill, Tokyo 4. Mehta & Madnani (1992). Mathematics for Economists, S. Chand, New Delhi. 5. Monga, G.S. (1972). Mathematics and Statistics for Economists, Vikas Publishing House,

New Delhi. 6. Mathur, P.N. and R. Bhardwaj (eds.) (1967). Economic Analysis in Input-Output Research.

Input-Output Research Association of India, Pune.

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Agricultural Economics MA Applied Economics

II Semester MEC 134

Credit: 4 Total Hours: 60 Unit 1: Introduction (09 Hours) Agricultural Economics: meaning, nature and scope; Capital Formation in Agriculture: National and State level analysis; Pattern of agricultural development: regional variations; Sustainable Agricultural Growth: concepts and constraints; Organic farming; Overview of Development Problems and Issues; Hunger and Malnutrition; Economics of Food Demand; Population Growth and the Demographic Transition; Unit 2: Growth and Technological changes in Agriculture (09 Hours) Agricultural productivity: comparison with developed countries, Ways and Means for improving crop productivity; Bio Technology: meaning and Scope; Green house technique; Food self sufficiency: pre independence & post independence; Input supply and distribution: economic aspects of irrigation and fertilizer use; Live stock management; Dairy farming; Contract farming; Value addition: processing industry; Emerging trends in agricultural technology; Unit 3: Consumer and Producer Theory in Agricultural Economics (09 Hours) Utility and demand functions in consumer behavior; Elasticities, Estimation of demands for agricultural commodities and policy implication; Producer theory in agricultural economics; Structural form approach; Reduced form approach on a supply side: Supply response model; Risk and Insurance; Unit 4: The State and Policy Environment in Agriculture (13 Hours) Economic and agricultural situation during plan periods and policy implications; Agriculture Pricing Policy: Price distortions of policy interventions in agricultural economics; Food security in India and public distribution system; Policies related to major agricultural commodities; Energy needs for agricultural/rural development; Subsidies to expand farm output and income distribution; Labour mobility and agricultural wage policy; Infrastructural support for agriculture: transport, storage and markets; Price, trade and international assistance; Agricultural Credit and Indebtedness; Research: education and extension needs; Agricultural taxation; Trade-off between agricultural development and environmental quality; Unit 5: Agri-food Markets: Perspectives and Issues (09 Hours)

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Food market analysis; Structure and organization of agri-food markets: developed countries, developing countries; Demand for food in international markets; The Marketing Chain: Retail and Wholesale Markets; Marketing Margins; Market power, concentration & consolidation; Unit 6: Agriculture in an Interdependent World (11 Hours) Comparative Advantage, Agriculture and International Trade; Trade Policies, Negotiations and Agreements; Agriculture and the Macro-economy; WTO and Indian agriculture; Problems of Agricultural Subsidies; Patents; Agricultural Exports: Quantitative Restrictions (QRs) and Non tariff barriers; References Ray, D., Development Economics, 1998, Chapters 2, 9, 10, 12, and 16. von Braun, J, M.S. Swaminathan, and M W. Rosegrant, “Agriculture, Food Security, Nutrition, and the Millennium Development Goals,” Essay, IFPRI, Washington. DC, 2005. Besley, T. and R. Burgess, “Halving Global Poverty,” Journal of Economic Perspectives, Vol 17. No 3, Summer 2003, pp. 3-22. Trostle, R., “Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices,” USDA/ERS WRS-0801, May 2008, Washington, DC. North, D., “Institutions, Transaction Costs, and Economic Growth,” Economic Inquiry, 1987. Olson, M. Jr., “Big Bills Left on the Sidewalk: Why Some Nations are Rich and Others are Poor,” Journal of Economic Perspectives, Spring 1996. Lee, R. “The Demographic Transition: Three Centuries of Fundamental Change,” Journal of Economic Perspectives, Vol. 17, No. 4, Fall 2003, pp. 167-190. Cohen, J., “Human Population: The Next Half Century”, Science, Vol. 302, November 14, 2003, pp. 1172-1177. World Bank, “Demand and Supply Factor in Fertility Transitions,” Chapter 4 in Population and Development, 1994. Hymer, S. and S. Resnick, “A Model of an Agricultural Economy With Non-Agricultural Activities,” American Economic Review, September 1969. Singh, S. and S., “Agricultural Household Models, John Hopkins University Press, Baltimore, 1986, Introduction and Chapter 1.

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Otsuka, K., “Efficiency and Equity Effects of Land Markets,” Chapter 51 in R. Evenson and P. Pingali, Handbook of Agricultural Economics, Volume 3, 2007, pp2671 – 2703. Townsend, R.M., Consumption Insurance: An Evaluation of Risk-Bearing Systems in Low Income Economies, Journal of Economic Perspectives, Vol 9, no. 3, Summer 1995: 83-102. Morduch, J., “Income Smoothing and Consumption Smoothing”, Journal of Economic Perspectives, Vol 9, No3, Summer 1995: 103-114 Moyo, S., G.W. Norton, J.Alwang, M. Miah, and M. Deom, “Peanut Research and Poverty Reduction: Impacts of Vaeiety Research to Control Peanut Viruses in Uganda, American Journal of Agricultural Economics, May 2007, pp.448-460. Thompson, R., “Globalization and the Benefits of Trade,” Chicago Fed Letter 236, March 2007 Yotopoulos, Pan, Asymmetric Globalization, Chapter 1 in Yotopoulos and Nugent (Ed) The Asymmetries of Globalization, Routledge: New York, 2007. Schiff, Maurice and Alberto Valdez, “Agriculture and the Macroeconomy, with emphasis on developing countries”, in B.L. Gardner and G.C. Rausser, Handbook of Agricultural Economics, Volume 2A, 2002, Chapter 27, pp. 1421-1454. Bouet, A. “How Much Will Trade Liberalization Help the Poor? Comparing Global Trade Models, IFPRI Research Brief N. 5, 2006. Koo, W. and P.L. Kennedy, “The Impact of Agricultural Subsidies on Global Welfare,” American Journal of Agricultural Economics, 88:2 (December 2006): 1219-1226. Krueger, Schiff, and Valdes, “Agricultural Incentives in Developing Countries: Measuring the Effects of Sectoral and Economy-Wide Policies,” The World Bank Economic Review, 1988, pp. 255-271. Vaidyanathan, A. (1994), “Performance of Indian Agriculture since Independence” in Kaushik Basu (ed.), Agrarian Questions Oxford University Press. V.M. Rao, (2001), “The Making of Agricultural Price Policy: A Review of the CACP Reports” Journal of Indian School of Political Economy vol. XIII, no. 1, Jan-March. Robert Evenson, Carl Pray and Mark Rosegrant (1999), Agricultural Research and Productivity Growth in India (IFPRI Research Report 109). Gunvant Desai and A. Vaidyanathan (1995), Strategic Issues in Future Growth in Fertiliser Use in India, Macmillan. Ashok Gulati (2000), “Indian Agriculture in an Open Economy: Will it Prosper?” in Ahluwalia and Little (eds.), India’s Economic Reforms and Development: Essays for Manmohan Singh, Oxford University Press.

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Schiff, M. and L.A. Winters, “Regional Integration Agreements: An Overview,” Chapter 1 in Regional Integration and Development, The World Bank, Washington DC, 2003, pp 1-30. Koo, W., P. Kennedy, and A. Skripnitchenko, “Regional Preferential Trade Agreements: Trade Creation and Diversion Effects,” Review of Agricultural Economics, 28 (3) (2006): 408-415 Kelly, T., “Why Are Developing Countries Still Negotiating? The WTO’s Successes at the Doha Round, Challenge, Vol 48, No. 3 (May/June 2005): 109-124. Martin, W. and K. Anderson, “The Doha Agenda Negotiations on Agriculture: What Could They Deliver?” American Journal of Agricultural Economics, 88 (5) (2006): 1211-1218. Krugman, P. “What Should Trade Negotiators Negotiate About?” Journal of Economic Literature, March 1997. Calvo, G and F Mishkin, “The Mirage of Exchange rate Regimes for Emerging Countries,” Journal of Economic Perspectives, Vol. 17, No. 4, Fall 2003, pp. 99-110. Fischer, S., “Exchange Rate Regimes: Is the Bipolar View Correct?”, Journal of Economic Perspectives, Vol 15, Spring, 2001, pp 3-24. Mellor, J.W., “Foreign Aid and Agriculture-Led Development”, Chapter 3 in C. Eicher and J. Staatz International Agricultural Development, Johns Hopkins, 1998.

DEVELOPMENT ECONOMICS MEC 135/MA I SEM

Credit: 4 Hrs: 60 UUIT 1: THEORIES OF GROWTH AND DEVELOPMENT Hrs 08 a) Economic Growth Theories Neoclassical economic theory: Slow-Swan growth model and its extension; Ramsey growth model. Empirics of neoclassical theory: Conditional and unconditional convergence Endogenous growth theory: AK model; Romer model with knowledge spillovers and increasing returns to scale; Uzawa-Lucas model with human capital Endogenous growth theory: Models with endogenous technological change, R&D based growth theory. Empirics of endogenous growth theory and technological change b) Contemporary Theories of Economic Development Dualistic development and structuralism – Lewis model, Chenery model The balanced-growth Nurske model; Hirschman’s unbalanced growth model with backward and forward linkages, c) Recent Emergence in Theories of Economic Development The imperfect information paradigm (Stiglitz); the new institutional economic paradigm (Williamson); the international dependence models

UNIT 2: POVERTY, RISK AND INEQUALITY Hrs 08 Content: Measurement of development and poverty- vulnerability and of chronic and inter-temporal poverty; concepts of welfare and well-being – contrast to Sen’s approach; microeconomic approaches on how economic processes lead to poverty increases or poverty reduction: poverty traps - the theory and evidence - credit market failures, risk, social norms and attitudes, and spatial externalities. UNIT 4: FINANCIAL FLOWS TO DEVELOPING COUNTRIES Hrs 08 Content: The determinants of private capital flows (FDI, bank lending, bonds and equity); and the institutional and policy issues arising from their impact on macroeconomic stability and growth; the positive economics of aid (from whom, to whom and with what effects) and the normative economics of aid (how to allocate and deliver aid better); the relationships between these two sorts of financial flows. UNIT 5: RURAL DEVELOPMENT Hrs 08 Contents: 1. Land (tenancy, shareholding, and property rights) 2. Labour (labour markets, shadow wages, wage determination) 3. Migration (equilibrium models, causes and consequences, risk) 4. Credit and microfinance (credit rationing, household credit, lending to the poor)

UNIT 6: INDUSTRIAL POLICY AND TECHNOLOGICAL UPGRADING Hrs 08 Content: 1. Industrialization, economic growth and the industrial policy debate 2. The experience of the East Asian NICs: lessons and debates 3. Transfer of technology and role of multinational companies 4. Industrialisation and catch-up in the emerging economies: the BRICS and beyond 5. Opportunities and constraints for industrial policy in the 21st century: internal and external dimensions UNIT 7: OPENNESS AND DEVELOPMENT Hrs 08 Content: The impact of trade and foreign investment on growth, inequality and poverty; variation in impact among countries with differing factor endowments and institutions; policy and non-policy barriers to external economic linkages; criteria and constraints in choice of external (and related internal) economic policies; industrial policy; market access, international and private rules governing trade; and regional integration. UNIT 8: EDUCATION AND DEVELOPMENT THROUGH COMMUNITY PARTICIPATION Hrs 04 Content: 1. The concept of service learning 2. A study of the causes, consequences and risk associated with migration for the rural illiterates 3. A study of the household finances of the rural Bangalore – lending to the rural poor, rural indebtedness, role of micro-finance.

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FINANCIAL ECONOMICS MA APPLIED ECONOMICS

I SEMESTER MEC 136

Credit: 4 Hrs: 60

Course Objective:

This course introduces students to the conceptual and practical operations of the capital market and its institutional framework in Indian context. The course is intended to provide an in-depth understanding of the operational issues of the capital market and the security analyzing criteria.

COURSE OUTLINE UNITS:

I. Basics (06 Hours)

Securities: concept and illustrations; Characteristics: return, liquidity, and risk; Securities in India; Types of security markets; Financial institution and services: intermediation, regulation, development.

II. Transactions and Procedures (06 Hours)

Investment process; Orders and limit orders; Clearing houses: payments systems and clearance; Investor protection: Depository Trust companies; Short sales; Street names; Market makers and margins; Reasons for transactions.

III. Markets and Instruments (08 Hours)

Types of markets; Concept and tests for market efficiency; Public offers; Underwriting; Market regulation; Rates of return; Yield to maturity, coupon payments, spot and forward rates; Yield curves, Liquidity and Duration; Types of risk; Transaction costs; Bid-Ask spread.

IV. Risk and Uncertainty (08 Hours)

Decision making under uncertainty: Utility: Risk aversion and risk premium; Measurement of risk: Mean-variance framework; Security configuration; specifying a portfolio; Feasibility and optimality;

V. Pricing Theories (08 Hours)

Capital Asset Pricing Model; Diversification, risk and return; Basic assumptions; securities market line and capital market line; Separation Theorem; Arbitrage; Arbitrage pricing theory: Factor models and pricing line;

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VI. Options and Derivatives (08 Hours)

Derivative securities; Options: put and call, American and European; Premium, exercise

VII. Corporate Finance (08 Hours)

Earnings; Pay-out ratio; Capital gains; New investments; Long run target; Lintner model; Gearing ratio (Leverage); Value of the firm; Simplifying assumption; takeovers.

VIII. Indian Financial System (08 Hours)

Structure of financial markets and instruments; UTI and mutual funds; Banking Sector Reforms; SEBI and Capital Market Reforms

[Total 60 Hours]

Readings

William Sharpe, Gordon Alexander and Jeffery Bailey, Investments 5/e, Prentice Hall of India, Chapters 1 – 13 (Selectively), 20, 22.

Hendrick S. Houthakker and Peter J. Williamson (latest edition), The Economics of Financial Markets, Oxford University Press, Selected chapters.

John Eatwell, Murray Milgate and Peter Newman (eds.), Finance: The New Palgrane, Norton, Chapters by Stephen Ross (Finance) and J.E. Ingersol (Option Pricing Theory)

L.M. Bhole, Financial Institutions and Markets, 3/e, Tata McGraw Hill.

INSTITUTIONAL ECONOMICS MEC 231

II SEMESTER 4 Hours / Week 4 Credits Objective of the Course: The course aims at introducing the students to basic concepts of New Institutional Economics (NEI) and sensitise them to various problems relating to information asymmetry, property rights and transaction costs by bringing in cases from the real world. UNIT 1: Basic Introduction to Institutional Economics (13 Hours) Institutional Economics as a departure from Neo-Classical and Marxian Economics, Historic development of Institutional Economics, Old and New Institutional Economics, Core issues in New Institutional Economics UNIT 2: Problems of Information Asymmetry (13 Hours) Prisoner’s dilemma and Nash equilibrium, Assurance problem, Principal-Agent Problem, Problem of Adverse Selection, Problem of Moral Hazard UNIT 3: Property Rights Issues (13 Hours) Concepts of Property and defining Property Rights, Problems of Ill-defined Property rights, Externalities-Market failure and property rights, Issues relating to ill-defined property rights, , Social vis-à-vis Individual Choices, Neo-classical Maximisation vis-à-vis Methodological Individualism, Prisoner’s Dilemma, Hardin’s Tragedy of Commons, Collective Action, and Assurance Problem UNIT 4: Transaction Costs and Bounded Rationality (13 Hours) Issues relating to transaction costs, Social cost vis-à-vis individual costs, Identification and measurements of transaction costs, Coase Theorem, Bounded Rationality UNIT 5: Applications of NIE (08 Hours) In Public Policy, Insurance Sector, Market for lemons, Social issues, Ecological and Environmental Issues Compulsory Reading:

1) Furburton & Richter, ‘Institutions and Economic Theory’, Dryden Press. Recommended Reading:

1. Pindyck, Robert S., Rubinfeld, Daniell L., & Mehta, Prem L., “Microeconomics”, 7th Edition, (2009), Pearson.

2. Frank, Robert H., “Micro Economics and Behaviour”, McGraw Hill International Editions, (1991).

3. Eggertson, Thrainn, “Economic Behaviour and Institutions”, Cambridge University Press, (1999).

4. North, Douglas C., “Institutional Change and Economic Performance”, Cambridge University Press, (2004).

5. Olson Mancur (1965), The Logic of Collective Action, Harvard University Press, Cambridge.

6. Shaw, M E. (1971). Group Dynamics: The Psychology of Small Group Behaviour, McGraw Hill, New York.

7. Ahuja H. L., “Advanced Economic Theory – Microeconomic Analysis”, 17th Revised Edition, (2008), S. Chand & Company Ltd.

MA APPLIED ECONOMICS MONETARY ECONOMICS

MEC 232 SEMESTER II

Credit: 4 Hrs: 60 DESCRIPTION This paper is offered to the students of M.A. in Economics in the II semester. The paper helps the students to understand the role of money and its effects on output and other macroeconomic variables. It also gives the students an in-depth understanding of the functioning of commercial banks and the role of the central banks in maintaining stability with growth. LEARNING OBJECTIVES

1. To study money and related variables such as inflation and interest rates.

2. To gain understanding of the monetary authority and its role in the formulation and implementation of monetary policy.

3. To understand the functioning of modern commercial banks on issues relating to the compliance to international banking norms and standards.

4. To examine the monetary episodes in India and abroad in order to facilitate a comparative understanding of the effectiveness of monetary policy in different countries by drawing on case studies.

5. To gain insights into factors influencing the capital inflows and outflows in an open economy model.

UNIT - 1 Money in the exchange process 10 Hours Level of Knowledge – Conceptual and Basic Money-Meaning, Functions of money, types of money-Classical Quantity Theory of money- Neutrality of money- Classical dichotomy- money, prices and inflation. Inflation and interest rates- Social costs of inflation- Keynesian theory of monetary economy- Integration of monetary and real sectors: The goods market and the IS curve-The money market and the LM curve UNIT - 2 Money supply and money demand 10 Hours Level of Knowledge – Conceptual and Working Knowledge Money supply: Measures of money supply- Fractional reserve banking- Model of money supply-Portfolio allocation and the demand for assets: Expected return, risk, liquidity Money demand: Portfolio theories of money demand- Transactions theory of money demand- Financial innovation and near money UNIT - 3 Money and Interest rates 05 Hours Level of Knowledge – Working Knowledge

Real and monetary theories of the rate of interest: liquidity preference and loanable funds theories of interest- The term structure of interest rates: Pure Expectations Theory-Pure segmentation theory UNIT - 4 The Open Economy 15 Hours Level of Knowledge – Conceptual and Working Knowledge The international flows of capital and goods: Role of net exports-international capital flows and trade balance-Saving and investment in a small open economy: Capital mobility and world interest rate -Impact of policies on trade balance- exchange rates- the real and nominal exchange rates and trade balance- Impact of policies on real exchange rate- The large open economy-policies in a large open economy UNIT - 5 Commercial Banking 10 Hours Level of Knowledge – Conceptual and Working Knowledge An overview of Indian Banking Structure - Reforms in the banking- system- Role of competition-Capital adequacy norms- prudential regulations and supervision- Investment policy of a commercial bank –Credit risk management- Structure of assets and liabilities – Asset liability management- growth of retail banking – interest and non-interest income sources: growth and trends–– Technology initiatives in banking UNIT - 6 Monetary policy 10 Hours Level of Knowledge – Conceptual and Working Knowledge Meaning and scope of monetary policy- LAF: Instruments- Transmission mechanism-money growth targeting and inflation targeting- Monetary policy in India: limitations and effectiveness

Skill Development 1. Review of empirical and theoretical scholarly articles in the area of money and

banking. 2. Group discussions on comparative banking systems in different countries.

Prescribed Texts • Ben Heijdra, Federick Van Der Ploeg, Foundations of Modern Macroeconomics, Oxford

University Press • N. Gregory Mankiw, Macroeconomics, Worth Publishers • Dwivedi D N, Macroeconomics: Theory and Policy, Mc Graw Hill, New Delhi, 2005.

References: 1. Dornbusch, Fischer, Startz, Macroeconomics, Tata Mc Graw Hill 2. D.N. Dwivedi, Macroeconomics:Theory and Policy, Mc Graw Hill. 3. Paul Krugman, Robin Wells, Macroeconomics, Worth Publishers 5.Raghabendra Jha, Macroeconomics for Developing Countries, Routledge, London 6.Levacic and Rebmann, Macroeconomics: An introduction to Keynesian-Neoclassical Controveries, ELBS With Macmillan Publication. 7.Wendy Carlin and David Soskice, Imperfections, Institutions and Policies, Oxford Publication

STATISTICS MEC 233

SEMESTER II 4 Hours / Week 4Credits Course Objectives: The main objective of this paper is to train students to grasp the use of statistical techniques and operations to analyze economic problems. This paper will initiate students into various economic concepts which are amenable to statistical treatment. UNIT I: Measures of Central Tendency and Dispersion (08 Hours) Mean, Median, Mode, Geometric Mean and Harmonic Mean. Measures of Dispersion –Absolute and Relative Measures of Dispersion, Mean Deviation, Standard Deviation, Coefficient of Variation, Skewness and Kurtosis. UNIT II: Correlation and Regression (08 Hours) Correlation – Types – Karl Pearson’s Coefficient and Rank Correlation Coefficient – merits and de-merits. Simple Regression Analysis – Presentation of Scatter diagram – Estimation of Regression lines in a bivariate distribution (X on Y and Y on X). Estimation of parameters by the Method of Least Squares – Standard Errors of Estimates – Interpretation of Coefficient of Correlation and Coefficient of Determination – Measuring the strength of estimated regression – Prediction on the basis of estimated regression (Illustrative examples from Economics). Multiple regression UNIT III: Probability Distributions (12 Hours) Concept and definition of Random Variable and Probability Distributions – Discrete and Continuous Distribution ,Binomial, Poisson and Normal Distributions,their properties and application in Economics UNIT IV: Statistical Inference (13 Hours) Sampling Distributions- small and large samples and properties – z, t, F and Chi-square. Estimation and properties of estimators, Concept of Standard Error – Point and interval estimators – Formulation and testing of hypothesis – Concepts of Level of Significance, Critical Region, Type I and Type II errors, Power of a test – Standard tests of significance (with examples from economics) UNIT V: Time Series Analysis (07 Hours) Concept and components – Trend Projection – Moving Averages method. Index Numbers – concept – price, quantity and value relations – Laspeyer’s, Paasche’s and Fisher’s Index Numbers. Time and factor reversal tests. Problems in construction of Index Numbers, Tests for Ideal Index Numbers UNIT VI: ANOVA and Multivariate Analysis Techniques (12 Hours) Analysis of Variance (ANOVA) – basic principles, technique, setting up ANOVA table, two-way ANOVA Variables in Multivariate Analysis, Important Multivariate Techniques, Important Methods Of Factor Analysis

Required Readings:

1. Anderson, Sweeny & Williams, Statistics for Business and Economics. 2. Gupta. S. C and V. K. Kapoor – Fundamentals of Mathematical Statistics, Sultan

Chand and sons, New Delhi. 3. Murray S. Speigel, Statistics, Schaum Series 4. C.R. Khothari, Research Methodology- Methods and Techniques, 5. Murray S. Speigel, Probability, Schaum Series


1. Nabendu Pal & Sahadeb Sarkar, Statistics Concepts and applications 2. Gupta S. P – Statistical Methods, Sultan Chand and sons, New Delhi.

PAPER: MEC 234 MATHEMATICAL ECONOMICS

MA APPLIED ECONOMICS SEMESTER II

COURSE DESCRIPTION This course introduces basic mathematical tools needed for post graduate study in economics. The course aims at introducing the students to mathematical concepts and methods which are used in consumer behavior, firm, market equilibrium etc. The course will emphasize intuition and problem-solving over rigor.

LEARNING OBJECTIVE • To train the students to grasp the use of mathematical techniques and operations to analyse economic problems • To initiate students into various economic concepts which are amenable to mathematical treatment Unit I. THEORY OF CONSUMER BEHAVIOUR (08 Hrs) Level of Knowledge – Working Knowledge

Maximisation of utility – demand functions – ordinary and compensated demand functions; Elasticity, properties of demand functions; substitution and income effects, Slutsky equation, direct and cross effects – linear expenditure system – separable and additive utility functions – indirect utility functions – duality in consumption – constant elasticity model – the theory of revealed preference – weak axiom, strong axiom, the substitution effect Unit II. THEORY OF FIRM (10 Hrs) Level of Knowledge – Working Knowledge

The production function – homogeneous production function – properties, Euler’s theorem; Cobb-Douglas production function, CES production function, VES production function, Translog production function-properties; cost functions: derivation of cost as a function of output- input demand function Unit III. MARKET EQUILIBRIUM (15 Hrs) Level of Knowledge – Working Knowledge

Effects of specific and advalorem taxes on price and output and effects of subsidies; Existence, uniqueness and stability of equilibrium; dynamic equilibrium with Lagged adjustment; Walrasian and Marshallian stability conditions Output, revenue and profit maximisation problems under monopoly; Duopoly and oligopoly markets- the quasi-competitive solution, the collusion solution, the Cournot solution, the Stackelberg solution, the market shares solution, the kinked-demand curve solution Unit IV. AGGREGATE EXPENDITURE (12 Hrs) Level of Knowledge – Working Knowledge

Aggregate expenditure in a Two-sector model, algebraic solution to equilibrium output, MPC, multiplier effect of a change in exogenous spending, the expenditure multiplier, government expenditure, government sector multipliers, multipliers for a model with income tax, net exports and equilibrium output. Unit V. THE IS-LM FRAMEWORK (15 Hrs) Level of Knowledge – Working Knowledge

Investment and the rate of interest, IS schedule for a two-sector model, shifting IS, slope of IS, goods equilibrium for a four-sector model, the supply of and demand for money, the LM schedule, shifting LM, slope of LM, simultaneous equilibrium in the money and goods markets. Skill development

1. Problem Solving 2. Application of mathematical tools to economics.

Prescribed Texts 1. James M. Henderson, and Richard E. Quandt, Microeconomic Theory A Mathematical Approach, Tata Mc Graw Hill, New Delhi. 2. Eugene Diulio, Macroeconomics, Schaum’s Outlines, Mc Graw Hill. 3. Allen R G D(1974) Mathematical Analysis for Economists, Mc Millan Press and ELBS, London. 4. Allen R G D, Macroeconomic Theory, Mc Millan Co., Ltd., 1967. 5. Chiang A C (1986) Fundamental Methods of Mathematical Economics, Mc Graw Hill, New York. 6. Jean Weber, Mathematical Analysis for Business Economics. 7. Edward Dowling, Mathematical Economics. References 1. Koutsoyiannis A. (1979) Modern microeconomics, 2nd ed, ELBS with Mc Millan. 2. Mona G S. (1996) Mathematics and Statistics for Economics, Vikas Publishing House Pvt. Ltd., Delhi. 3. Yamane, Taro (1975) Mathematics for Economists, Prentice Hall of India, New Delhi. 4. Mehta-Madnani (2005) Mathematics for Economists, Sultan Chand and Sons, New Delhi.

INTERNATIONAL CONOMICS MEC 235

MA II SEM Credit: 4 Hrs: 60 PART I: INTERNATIONAL TRADE UIT 1. Core Trade Models: Ricardian and Neoclassical Hrs 05 UNIT 2. Heckscher-Ohlin and Related Models and Empirical Tests Hrs 05 UNIT 3. Trade and Wages: Theoretical Perspectives and Empirical Studies Hrs 05 UNIT 4. Increasing Returns, National Conflict, and the Gravity Model Hrs 05 UNIT 5. Trade Policies under Alternative Assumptions: Perfect Competition, Imperfect Competition, and Market Failures Hrs 05 UNIT 6. Trade and Growth Hrs 03 UNIT 7. International Factor Mobility and Multinational Corporations Hrs 03 PART II: OPEN MACROECONOMICS UNIT 8. The Balance of Payments and National Account Hrs 03 UNIT9. Determinants of Exchange Rates: Purchasing Power Parity; Sluggish Price and Overshooting Exchange Rate Model; Effect of Interventions in the Foreign Exchange Market Hrs 09 UNIT 10. The Exchange-Rate Regime Choice and a Common Currency Area: Policy Assignment Problems; International Policy Coordination; Choice of Exchange Rate Regimes Hrs 09 UNIT 11. International Debt and Currency Crises Hrs 03 UNIT 12. The Role of the IMF and Other International Financial Organizations Hrs 05 BOOKS AND REFERENCES Robert C. Feenstra, Advanced International Trade: Theory and Evidence, Princeton University Press, 2004, ISBN 0-691-11410-2 Edward Leamer, editor, International Economics, Worth Publishers, 2001, ISBN 1-57259-820-4. James R. Markusen, James R. Melvin, William H. Kaempfer, and Keith E. Maskus (MMKM), International Trade: Theory and Evidence, McGraw-Hill, 1995, ISBN 0-07-040447-X.

Krugman P., Obstfeld M. (KO) International Economics: Theory and Policy. Ed. 3-5. Sodersten B., Reed G. (SR) International Economics, 3rd ed. Macmillan, 1994. Appleyard D., Field A. (A) International Economics. Vanags A. (UL) International Economics. University of London, Subject Guide, 2001. Ethier W. (E) Modern International economics, 3rd edition. W.W. Norton & Co., 1997. Winters, A. (W) International Economics, 4th edition. Handbook of International Economics (HIE), Vol. 3, Elsevier Science B.V., Amsterdam 1997. In addition, the following books are also recommended for reading: Jagdish N. Bhagwati, ed. International Trade: Selected Readings, 2nd edition (Cambridge, MA: MIT Press, 1987). Jagdish N. Bhagwati, Arvind Panagariya, & T. N. Srinivasan, Lectures on International Trade, second edition (Cambridge, MA: MIT Press, 1998). William R. Cline, Trade and Income Distribution (Washington, DC: Institute for International Economics, 1997). Stephen D. Cohen, Robert A. Blecker, & Peter D. Whitney, Fundamentals of U.S. Foreign Trade Policy: Economics, Politics, Laws, and Issues, 2nd edition. (Boulder: Westview, 2003). Susan M. Collins, ed., Imports, Exports, and the American Worker (Washington, DC: Brookings Institution, 1998). Giovanni Dosi, Keith Pavitt, & Luc Soete, The Economics of Technical Change and International Trade (New York: NYU Press, 1990). Ronald Findlay, Factor Proportions, Trade, and Growth (Cambridge, MA: MIT Press, 1995). Dominique Foray & Christopher Freeman, eds., Technology and the Wealth of Nations: The Dynamics of Constructed Advantage (London: Pinter, 1993). Ralph E. Gomory & William J. Baumol, Global Trade and Conflicting National Interests (Cambridge, MA: MIT Press, 2000). Gene M. Grossman, ed., Imperfect Competition and International Trade (Cambridge, MA: MIT Press, 1992). Gene M. Grossman & Elhanan Helpman, Innovation and Growth in the Global Economy (Cambridge, MA: MIT Press, 1991). Gene M. Grossman & Kenneth Rogoff, eds., Handbook of International Economics, vol. 3, (Amsterdam: North-Holland, 1995). Ronald W. Jones & Peter B. Kenen, eds., Handbook of International Economics, vol. 1, International Trade (Amsterdam: North-Holland, 1984). Paul R. Krugman, Rethinking International Trade (Cambridge, MA: MIT Press, 1990). Paul R. Krugman, Geography and Trade (Cambridge, MA: MIT Press, 1991). Andrea Maneschi, Comparative Advantage in International Trade: A Historical Perspective (Edward Elgar, 1998) Dani Rodrik, Has Globalization Gone Too Far? (Washington, DC: Institute for International Economics, 1997).

1

ECONOMICS OF BANKING AND INSURANCE MA APPLIED ECONOMICS II SEMESTER (ELECTIVE)

MEC 241A UNIT I: Risk, Uncertainty and Asymmetric Information (08 Hours)

Contingent Consumption; Utility Functions and Probabilities; Expected Utility; Risk Aversion; Individual Consumer's Behaviour towards Risk; Diversification: Risk Spreading; Mean-Variance Utility: Measuring Risk, Equilibrium in a Market for Risky Assets; Quality Choice; Adverse Selection; Moral Hazard: Moral Hazard and Adverse Selection; Signaling; The Efficient Market Hypothesis;

UNIT II: Banking Institutions (11 Hours)

Basic concepts; Functions of Money; Determinants of Money Supply; RBI approach to money supply; High Powered Money and Money Multiplier; RBI and its functions: Methods of Credit Control; Reserve Bank of India and Monetary Policy: Objectives and Limitations; Objectives and functions of Commercial Banks; Credit Creation of Commercial Banks; Money Market and Role of Commercial Banks; Nationalization and Privatization of Commercial Banks; Co-operative banks: Origin, features, growth, types, problems and features; Banking Sector Reforms: Chakravarthy Committee Report, Narasimham Committee Report; Khusro Committee Recommendation

UNIT III: Life Insurance (08 Hours)

Types of life insurance Contracts: Term and Cash Insurance; The Level Premium Concept; Life Insurance Products; Types of Term Insurance; Whole Life Insurance; Variation of Whole Life Insurance; Indeterminate Premium Whole Life Insurance; General Classifications of Life Insurance; Computation of Life Insurance Premium; Benefits-Certain and Benefits-Uncertain contracts;

UNIT IV: Health Insurance (10 Hours)

Individual Health and Disability Income Insurance; Types of Individual Health Insurance Coverage: Hospital (Surgical Insurance, Major Medical Insurance); Disability Income Insurance; Need for Disability Income Insurance: Short Term Versus Long Term Disability Coverage; Health Insurance for the Elderly; Long Term Care Insurance; Employee Benefits: Group, Life and Health Insurance; Group Insurance: Group Life Insurance Plans, Group Health Insurance Plans, Group Disability - Income Insurance;

UNIT V: Insurance Company Operations (08 Hours)

2

Insurance Company Operations: Rate Making, Underwriting, Production, Claim Settlement, Reinsurance; Life Insurance Industry in India; Government Insurance Units; Private Players; Emerging Scenario; Marketing Systems; Distribution Channels: Agents and Brokers; Changes in Distribution System; Government regulation of Insurance; Rationale of Regulation; Function of IRDA, IITDA Regulations; Issues in Insurance Regulation;

[Total 45 Hours]

Suggested Readings:

Ackley, G. (1978), Macroeconomics: Theory and Policy, Macmillan, New York.

Besley, T., J. Hall, and I. Preston. 1998. “Private and Public Health Insurance in the United Kingdom.” European Economic Review 42 (35): 491–97. ———. 1999. “The Demand for Private Health Insurance: Do Waiting Lists Matter?” Journal of Public Economics 72 (2): 155–81. Bodenheimer, T. 1992. “Private Insurance Reform in the 1990s: Can It Solve the Health Care Crisis?” International Journal of Health Services 22 (2): 197–215. Carmichael, J., and M. Pomerleano. 2002. The Development and Regulation of Non-Bank Financial Institutions. Washington, DC: World Bank. Chakravarty, S.C. (1985), Report of the Committee to Review the Working of the Monetary System, Reserve Bank of India, Bombay. Colclough, C. 1997. Marketizing Education and Health in Developing Countries: Miracle or Mirage? Oxford and New York: Clarendon. Cutler, D. M., and J. Gruber. 1995. Does Public Insurance Crowd Out Private Insurance? Cambridge, MA: National Bureau of Economic Research. ———. 1997. “Medicaid and Private Insurance: Evidence and Implications.” Health Affairs (Millwood) 16 (1): 194–200. Ensor, T. 1995. “Introducing Health Insurance in Vietnam.” Health Policy and Planning 10 (2): 154–63. ———. 1999. “Developing Health Insurance in Transitional Asia.” Social Science and Medicine 48 (7): 871–79. Folland, S., M. Stano, and A. C. Goodman. 2004. The Economics of Health and Health Care. Upper Saddle River, NJ: Pearson/Prentice Hall. Glied, S. A. 2001. “Health Insurance and Market Failure since Arrow.” Journal of Health Politics, Policy and Law 26 (5): 957–65

3

Grant, K., and R. Grant. 2003. “Health Insurance and the Poor in Low-Income Countries.” World Hospitals and Health Services 39 (1): 19–22. Hal R. Varian, Intermediate Microeconomics, 5/e, W W Norton and Company. ILO Sub-regional office for South Asia, New Delhi, Extension of Social Protection in India Information Papers Series, “Yeshasvini Cooperative Farmers Health Scheme: A Typical Example.” February 2007 Keynes, J.M. (1936), The General Theory of Employment, Interest and Money, Macmillan, London. L.M. Bhole, Financial Institutions and Markets, 3/e, Tata McGraw Hill.

Laidler, D.E.W. (1977), Demand for Money: Theory and Evidence, DumDon Valley, New York. Manning, W. G., and M. S. Marquis. 1996. “Health Insurance: The Trade-Off between Risk Pooling and Moral Hazard.” Journal of Health Economics 15 (5): 609–39. McKnight, R. 2002. Essays on the Economics of Health Insurance. Cambridge, MA: Massachusetts Institute of Technology. Nyman, J. A. 2003. The Theory of Demand for Health Insurance. Stanford: Stanford University Press.

Outreville, J. F. 1991. “Use of Computer Technology in the Insurance Sector of Developing Countries.” Discussion Paper 38, United Nations Conference on Trade and Development, Geneva. ———. 1994. “Life Insurance in Developing Countries: A Cross-Country Analysis.” Discussion Paper 93, United Nations Conference on Trade and Development, Geneva. ———. 1996. “Reinsurance in Developing Countries: Market Structure and Comparative Advantage.” Discussion Paper 121, United Nations Conference on Trade and Development, Geneva. ———. 1998. Theory and Practice of Insurance. Dordrecht and Boston: Kluwer Academic Publishers. P.S. Palande, R.S Shah, and M. L. Lunawat, (2003), Insurance in India: Changing Policies and Emerging Opportunities, Sage Publications. Reddy, Y.V. (2000), A Review of Monetary and Financial Sector Reforms in India – A Central Banker’s Perspective, UBSPD, New Delhi.

STRATEGIC MANAGEMNT MA APPLIED ECONOMICS

SEMESTER II MEC 241B

OBJECTIVES: The course gives students a general managerial and economical perspective and facilitates the various issues of strategic management at functional, divisional and corporate levels. UNIT 1 Introduction and overview of strategic management: Nature and scope, strategic management process, objectives, goals, vision, mission and strategic intent, role of mangers at various levels.

7hrs UNIT 2 External and Internal Environment: Importance of Environmental analysis, environmental scanning, industry analysis, SWOT analysis, Value chain analysis.

8hrs UNIT 3 Strategy formulation and choice: functional, divisional and Corporate level, growth, expansion and grand strategies, diversification strategy, stability combination and retrenchment strategy, mergers and acquisitions, strategic alliance and global strategies.

15hrs UNIT 4 Strategy implementation: Operational strategies, marketing strategies, HRM strategies, and financial strategy, Strategic Business Unit (SBU). Strategic Evaluation and Control.

10hrs UNIT 5 Current issues of strategic management: Global issues of 21st century, issues in nonprofit originations, managing technology and strategy.

5hrs References:

1. Lawrence and Glueck, Strategic Management and Business Policy, McGraw Hill Publications.

2. C.N. Sontakki, Strategic Management, Kalyani Publishers. 3. Alex Miller, Strategic Management, Irwin Mc Graw Hill Publishers. 4. V S P Rao and V Hari Krishna, Strategic Management, Excel Books

PUBLIC ECONOMICS MA APPLIED ECONOMICS

III SEMESTER MEC 331

Credits: 4 Total Hours: 60 4 Hours/week DESCRIPTION This paper delivers a balanced presentation of public policy that equips readers with a solid understanding of economic theory and how it affects policy issues. It thoroughly illustrates the role government plays in the economy and explains how and why the public sector makes decision on tax issues as well as includes topics as cost benefit analysis and other issues that involve govt spending decision. LEARNING OBJECTIVES: This course is meant to:

1. To help the students learn more about the fundamental public policy questions of the day and the key theoretical and empirical tools of policy analysis in economics.

2. To understand the economic challenge of allocating limited resources among competing uses in a global economy and across different market structures under conditions of limited information.

3. To understand the role of government in the economy in the context of business activity, income distribution, economic growth, globalisation and market failure.

Unit 1 Role of Government (10 Hours) Public sector in the economy-functions; allocation, distribution, public goods, private goods and merit public goods; Market failure- Information asymmetry, Market signalling Externalities- basic analysis and Coase theorem-Pigovian taxes. Unit 2 Public Choice and Public Policy (10 Hours) Allocation of resources; Private and public mechanism for allocating resources- Problems of preference revelation and aggregation – Voting systems; Arrow’s Impossibility theorem- Provision of public goods; Voluntary exchange model and Samuelson’s impossibility of decentralised provision of public goods ; Tiebout model; Unit 3 Public Expenditure (10 Hours)

Theories of public expenditure; Wagner’s law of increasing state activities; Peacock Wiseman hypotheses-Social Cost benefit analysis-Criteria for public investment-Project valuation-Economic reforms and control of public expenditure in India. Unit 4 Taxation (10 hours) Taxes-types; Canons- VAT and GST- Approaches to Equity principle in taxation: Benefit principle; Ability to Pay Principle- Impact and Incidence of taxation; Modern theory of Incidence- Major trends in tax revenue of the central and state governments in India- Tax Reforms in India; Chelliah Committee Report. Unit 5 Public Debt and Budget (10 hours) Classical and Keynesian approaches to public debt; Analytical concepts of public debt; Modern theory of public debt; Sources of public debt; Methods of debt redemption; Principles of debt management and repayment-Growth of India’s Public debt-Zero based budgeting-Programme budgeting. Unit 6 Fiscal Federalism (10 hours) Priciples of federal finance - Assignment of Functions & Devolution of Resources and Grants; Vertical and Horizontal Imbalance- Finance Commission- Recommendations of 12th and 13th Finance Commissions – Economic reforms and centre state financial relations in India. Basic Reading List: 1. Dr.Tyagi B.P., Public Finance, Jai Prakash Nath Pub.Meerat, (UP) 2. Musgrave and Musgrave: Public Finance in Theory and Practice (Fifth Edition). 2. H.L. Bhatia. Public Finance (Fifteenth Revised Edition). 3. Amaresh Bagchi (ed.). Readings in Public Finance. Oxford University Press 4. R.K.Lekhi, Public Finance. Recommended Readings: 1. Buchanan J.M., The public Finances, Richard D.Irwin, Homewood. 2. Jha.R (1998), Modern Public Economics, Routledge, London. 3. Srivastave.D.K., Fiscal Federalism in India, Har Ananad Publication Ltd., New Delhi

MA APPLIED ECONOMICS ECONOMETRICS

MEC 332 III SEMESTER

4 Hours / Week 4 Credits Course Objectives: The course is designed to impart the learning of principles of econometric methods and tools. This is expected to improve student’s ability to understand of econometrics in the study of economics. UNIT-I: Introduction (11 Hours) Nature, meaning and scope and methodology of Econometrics-The simple Linear Regression Model-The ordinary least squares method(OLS) and its assumptions..Properties of least squares estimates.Guass-Markow Theorem,R2,Adjusted R2. UNIT-II: Econometric Problems (15 Hours) Violations of basic assumptions of OLS- nature, test, consequences and remedies, the problems of Specification error. Functional forms of regression models- Log-Linear, semi log model, reciprocal models, and polynomial models (brief outline only). Module-III: Dummy variables, Dynamic Economic Models (15 Hours) Dummy variable technique, Uses of Dummy variables, dummy variable trap, regression on dummy dependent variable-The LPM Model , Logit Model, Probit Model, Tobit model-features and estimation. Auto regressive and distributed lag models-The Koyck model, partial adjustment model, adaptive expectation model, The Almon approach to distributed lag models. UNIT-IV: Simultaneous Equation Models and Methods (12 Hours) The simultaneous equation bias and inconsistencies of OLS estimation – identification - the identification problem – under identification – exact identification and over identification- Rules of identification, derivation of order and rank condition. Indirect least squares (ILS), the method of instrumental variables (IV), Two stage least squares (2SLS), Three stage least squares (3SLS), ‘K’ Class estimators, Limited information, maximum likelihood estimation (Concepts only). UNIT-V: Time Series Econometrics (07 Hours) An Autoregressive(AR) Process, A Moving Average(MA) Process, An Autoregressive and Moving Average (ARMA) Process,An Autoregressive Integrated Moving Average (ARIMA) Process. Required Readings: 1. Damodar Gujarati - Basic Econometrics. ,McGraw - Hill, 2007.

2. A.Koutsoyiannis -Theory of Econometrics. 3. William .H. Greene -Econometric Analysis. Recommended Readings: 1. Lawrence Klein. - An Introduction to Econometrics. Prentice Hall Inc., Englewood Cliffs. New Jersy. 2. A.A.Walters - An Introduction to Econometrics. 3. R.S. Pindyck and D.L.Rubinfeld -Econometric Models and Econometric Forecasts. 4. J.Johnston -Econometric Methods. McGraw Hill Book Company, New York, 1972. 5. G.S.Maddala -Econometrics. , McGraw Hill, New York, 1977. 6. A.S. Goldberger - Econometric Theory. 7. Michael D. Intriligator, Econometric Models, Techniques and Applications, Prentice Hall of India, New Delhi, 1980.

MA APPLIED ECONOMICS

RESEARCH METHODOLOGY

SEMESTER III

MEC 333

4 Hours / Week 4 Credits

Objectives of the Course 1. Understanding of the importance of research in creating and extending the knowledgebase of their subject area 2. Ability to distinguish between the strengths and limitations of different research approaches regarding their subject/research area 3. Knowledge of the range of qualitative and quantitative research methods potentially available to them. 4. The ability to differentiate between the role of practitioners and the role of researchers. 5. An understanding of and begin to critically reflect upon issues of ethics and role of the researcher. 6. The skills to work independently, to plan and to carry out a small-scale research project.

UNIT 1: Introduction

Introduction to research & research methods: The course - Ways of knowing and understanding the world and the research process - The nature of knowledge and theory - Philosophy of Social Science Research - Relevance of Social Science Research - Objectivity and Values in Social Sciences

UNIT 2:

Logic of Scientific Investigation - Theory Construction in Social Science Research - Approaches to Social Science and Managerial Research, Theoretical, Applied and Action Research - Ethical Issues in Research on Human or Social Subjects - Non-sexist approach in Social Sciences

UNIT 3:

Research Design - Review of Literature - Identification of Research Gaps and Research Needs - Identification, selection and formulation of research problem - Formulating Hypotheses/Propositions/Issues, conceptualizing research problem

UNIT 4:

Overview of Social Science Methodology - Uni-disciplinary, inter-disciplinary, multi-disciplinary methodologies - Quantitative Research Methods: An Overview - Qualitative Research Methods: An Overview - Historical Method - Case Study Method - Action Research - Monitoring and Evaluation - Triangulation (including/mixing Qualitative and Quantitative) Methods

UNIT 5:

Information needs and use in social sciences: Secondary Sources of Information: Using and Integrating secondary and primary information - Quantitative Data: Kinds and quality of Data, demography, labour force, agriculture, industry - Quantitative Data: Human resources, education, health, housing, employment, banking, rural data bas - Quantitative Data: Survey Reports, Research Studies, Historical Data Tools - Statistical Systems – International, National and Local: Objectivity, Reliability and Validity of Data - Surveys and Questionnaires: Questionnaire, Schedule Design and Construction, Sample Surveys, Survey Administration - Observation – Structured and unstructured, Recording and Interpretation of Observations, Ethnography -Interviews: Nature of the Interview Process - Structured and Unstructured Interviews, Focus Groups, Group Discussions

UNIT 6:

Analysis of Quantitative Data - Analysis of Qualitative Data - Choice of Statistical and Processing Techniques - Interpretative Narrative Methods - Theory of the Testing of Hypotheses - Presentation of Research Findings, Products of Research, Thesis Writing - Factors conducive to research utilisation

References:

Bell, J. (1993) Doing your research project: a guide for first-time researchers in Education and Social Science, Buckingham, UK: The Open University.

Borg, W.R., & Gall, M.D. (1983). Educational Research: An Introduction (Fourth ed.). New York: Longman Inc.

Brinberg, D. and McGrath, J.E. (1985) Validity and the research process, Newbury Park, CA: Sage Publications, Inc.

Erickson, F. (1986). Qualitative methods on research on teaching. in M.C. Wittrock (ed.), Handbook of research on teaching (3rd ed., pp. 119 - 161). New York: MacMillan.

Fitz-Gibbon, C. T. and L. L. Morris (1987) How to Analyse Data, Newbury Park: Sage Publications, Inc.

Foddy, W (1993) Constructing Questions for Interviews and Questionnaires: Theory and Practice in Social Research, Cambridge: Cambridge University Press.

Isaac, S., and Michael, W.B. (1981). Handbook in research and evaluation: A collection of principles, methods, and strategies useful in the planning, design, and evaluation of studies in education and the behavioral sciences ( 2nd ed.). San Diego: EdITS.

Yin, R.K. (1994). Case Study Research (Second Edition, Vol. 5). Thousand Oaks, CA: Sage Publications, Inc.

Statistical Texts

Andreski, S. Social Sciences as Sorcery. New York: St. Martin's Press, 1973.

Blalock, H. M. Social Statistics, Rev. 2nd ed. New York: McGraw-Hill, 1979. Duncan, O. Introduction to Structural Equation Models. Guilford, J. P. and B. Fruchter. Fundamental Statistics in Psychology and Education, 6th

ed. New York: McGraw-Hill, 1978. Keppel, G., W. H. Saufley, Jr., and Howard Tokunaga. Introduction to Design and

Analysis: A Student's Handbook, 2nd ed. New York: W. H. Freman, 1992. Matlack, W. F. Statistics for Public Managers, 1993. Itasca, Il: F. E. Peacock, 1993. Meier, Kenneth J. and J. L. Brudney. Applied Statistics for Public Administration, 3rd

ed. Belmont, CA: 1993. Phillips, J. L. Statistical Thinking: A Structural Approach, 2nd ed. San Francisco: W.

Hl. Freeman, 1982. Renner, Tari. Statistics Unraveled: A Practical Guide to Using Statistics in Decision-

Making. Washington, DC: International City Management Association, 1988. Reynolds, H. T. Analysis of Nominal Data, 2nd ed. Beverly Hills, CA: Sage, 1984. Welch, S. and J. Comer. Quantitative Methods for Public Administration: Techniques

and Applications, 2nd ed. Chicago, Il: Dorsey Press, 1988. White, Michael J., et al. Managing Public Systems: Analytic Techniques for Public

Administration. Lanham: University Press of America, 1985. Winkler, R. L. and W. T. Hayes. Statistics: Probability, Inference, and Decision, 2nd ed.

New York: Holt, Rinehart and Winston, 1975.

Statistical Programs

Mystat. Course Technology, Inc., One Main Street, Cambridge, Massachusetts 02142.

SAS, Statistical Analysis System. SAS Institute, Inc., Box 8000, Cary NC 27511. SPSS-X, Statistical Package for the Social Sciences. SPSS, Inc., Suite 300, 444 North

Michigan Avenue, Chicago Il 60601. STATA. Stata Corporation, 702 University Drive East, College Station, Texas 77840.

HEALTH ECONOMICS MA ECONOMICS SEMESTER III

MEC 334 4 Hours/ Week 4 credits UNIT I The economics of health care Introduction- definition of health, life expectancy and mortality rates, morbidity – important aspects of health care economics: Government intervention, uncertainty, asymmetric knowledge, externalities- health as a durable good- production of health- lifestyle and health- epidemiology- inter-relation of markets in medical care and health insurance. UNIT II Productivity of medical care Marginal and average productivity- productivity changes on the extensive and intensive margin- measurement of health improvements- Randomized controlled trial data (RCTs), QUALYs, standard gamble and time trade off approaches- medical practice variations on the extensive margin, Economic appraisal of health care: cost benefit approach-principles of cost benefit approach-process of cost benefit approach UNIT III The Demand for Medical Care Indifference curves for health and other goods- effects of increase in income- demand for medical care- demand curve and illness events- insurance and demand for medical care: co-payments, coinsurance rates, indemnity insurance, deductibles- time costs and travel costs- patients beliefs- role of quality in health care. UNIT IV Supply of health care The firm- inputs, output and cost- hospital as a supplier of medical care- residual claimant- utility function of a not-for-profit hospital: political theory model- hospital costs- long run verses short run costs- hospital cost curves- hospitals in the market place- interaction between hospitals and patients- a model of equilibrium quality and price- Other hospital’s quality and output changes- interaction between doctors and hospitals. UNIT V Health Insurance The demand for health insurance- the risk averse decision maker- choosing the insurance policy- medical care demand elasticity and demand for health insurance: moral hazard- supply of health insurance- stability of insurance market- selection and self-identification: problem of adverse selection- group insurance- economies of scale- importance of health insurance in developing countries- problems and challenges. UNIT VI Role of health care institutions International and national health care organizations, Role of public and private health care institutions in provision of health care.

Required Readings

1. Charles E. Phelps, Health Economics, Routledge Publishers. 2. Alistair Mc Guire, John Henderson and Gravin Mooney, The economics of health care,

Routledge Publishers. Recommended Reading

1. William Jack, Principles of Health Economics for Developing Countries, WBI Development Studies.

2. Karman H.E. , Economics of Health 3. Van Der Gaag and M. Perlman, Health, Economics and Health Economics 4. M. Perlman, Economics of Health and Medical Care 5. M. Grossman, The Demand for Health, A theoretical and empirical investigation 6. Allen C. Goodman and Miron Stano, The Economics of Health and Health Care 7. Schultz T.W. , Investment in Human Capital 8. Phelps C.E. , Health Economics 9. Folland S, Goodman A.C., Miron Stano, The Economics of Health and Heatlth Care 10. Dreze and Sen, India : Economic Development and Social Opportunity

INDIAN ECONOMY: POLICY AND ISSUES MEC 335

SEMESTER III DESCRIPTION This paper is offered as a compulsory paper in the fifth semester. It provides a general idea about the dynamic nature of Indian economy and prepares students for creating a feel of Indian economy. Students passing through this course can specialize in various fields associated with India’s growing economy. LEARNING OBJECTIVES 1. To provide the students with discussion on some of the key issues of Indian economy. 2. To make the students understand the macroeconomic challenges and policy management

in India. 3. To expose the students to the quantitative data on various economic aspects and policies

in India. UNIT - 1 Economic Growth & Development 16 Hours Level of Knowledge – Conceptual, Basic and practical Growth – development debate, approach to economic development & its measurement, sustainable development, role of state, market and other institutions, Indicators of development, PQLI , human development index (HDI) , gender development indices, Population: patterns , population policy , urbanization. Poverty: concept, measurement, measures , micro-finance, Employment: measurement of unemployment and underemployment , policy measures and labour intensive technology. UNIT – 2 Planning in India 10 Hours Level of Knowledge – Conceptual and Basic Objectives, strategy and evaluation, development institutions including panchayats, NGOs, Pressure groups and voluntary sector , planning in a market economy. UNIT - 3 Agriculture 10 Hours Level of Knowledge – Conceptual Agriculture policy , land reforms , farm size and productivity, Technological changes, agricultural operations (pricing, subsidies, finance policy, marketing, food administration etc.) UNIT - 4 Industry 14 Hours Level of Knowledge – Conceptual and Basic Pattern of industrialization, industrial policy 1990 onwards, industrial operations (productivity, pricing, competitiveness and technology) PSUs, SMEs including rural industrialization, industrial sickness , Service industry: structure, industrial labour. UNIT - 5 WTO and Indian economy 10 Hours Level of Knowledge – Conceptual and Basic

Logic and rationale of economic reforms Globalization of Indian economy, impact of WTO on economic sectors. First, Second and Third generation reforms. Skill Development [Total 60 hours]

1. Group presentations on various macro economic issues in relation to the practical experience of various countries with special reference to India.

2. Practical problems associated with related topics. 3. Case studies 4. Presentations on Financial news updates. 5. Presentation on macro economic policies.

Course Texts 1.Rudder Dutt and K.P.M.Sundaram-Indian Economy 2. Mishra and Puri – Indian Economy. 3. Uma Kapila,- Indian Economy : Performance and Policies, Academic Foundation, 8th Edition Recommended Reading Jagadish Bhagavathy and Padma Desai- Planning for Industrialization 2.Uma Kapila -Indian Economy since Independence (edited) Academic Foundation 3.Brahmananda P.R. and V.R.Panchamukhi,(Ed) - The Development Process of the Indian Economy. 4.Bhata, B.M.- Poverty, Agriculture and Economic Development. 5.Bhata, R. Frankel- India s Political Economy 1947-1977- The Gradual Revolution. 6.Prabhu Ghate- Direct Attacks on Rural Poverty- Policy Programmes And Implementations. 7.Pramit Chaudari- The Indian Economy, Poverty And Development. 8.Madhava, C. D. (Ed)- Some Problems Of India’s Economic Policy. 9.Vakil,C.N.-Industrial Development Of India- Policy And Problems. 10.Uppal J.S. (Ed)- India’s Economic Problems 11.V.S.Mahajan(Ed)- Studies In Indian Economy. 12.Pramit Chaudari(Ed)- Aspects Of Indian Economic Development. 13.Planning Commission, Government of India- Five Year Plan Documents 14.K.N. Agarwal, Indian Economy – Problem of Development of Planning, New Age of International Ltd. 15.I.C. Dingra, Indian Economy 16.Vaidyanathan.A (1994) “Performance of Indian Agriculture since Independence” in Kaushik Basu (ed.),Agrarian Questions,Oxford University Press. 17.J.Bhagwati (1993) , India in Transition: Freeing the economy, Clarendon Oxford 1993. 18.Department of Disinvestment, White Paper, 2000. 19.Related journals and magazines

MA APPLIED ECONOMICS SECURITY ANALYSIS & PORTFOLIO MANAGEMENT

SEMESTER III MEC 341A


Objective of the course: This course on Security Analysis and Portfolio Management is provided as an elective subject to the students of MA(Applied Economics) course and is intended to provide deeper insights into the function of markets, its valuation techniques, the concepts of portfolio management with the techniques of risk diversification. This would help the students to further their interests in the area of Financial Economics which has emerged as an area for both Academic Research and also for Corporate career prospects. UNIT 1 (07Hours) Basics of Risk and Return including its measures (Ch1 of Reilly & Brown) - Measures of Return and Risk: Computing mean historical returns, calculating expected rates of return, measuring the risk of expected rates of return and the risk measures for historical returns. Determinants of required rates of return: Risk free rate, risk premium, fundamental risk vs systemic risk. Relationship between Risk and Return : Security Market Line (SML), movements along SML and changes in the slope of SML. UNIT 2 (04Hours) Efficient Capital Markets (Ch6 of R&B)- Efficient Market Hypothesis- Weak form, Semistrong form and Strong form- its tests and results, Efficient Markets and Technical analysis, Efficient Markets and Fundamental analysis, Efficient Markets and Portfolio Management. UNIT 3 (09Hours) Fundamental Analysis (Ch12 of R&B) Economic factors - monetary variables – interest rates- inflation- exchange rate- fiscal measures- GDP- other economic factors Industry Analysis (Ch13 of R&B) -Why industry analysis, the business cycle and industry analysis - evaluating the industry life cycle

Company Analysis (Ch14 of R&B) - Company analysis versus the valuation of stock, Competition- growth of sales- earnings – dividend policy – restructuring policy – capital gearing- mergers and acquisition- earning surprise. SWOT analysis - Tenets of Warren Buffet. Analysis of Growth companies Market Related Factors January effect- noise trading- trends Economics, Industry and Structural links to Company analysis, Firm competitive - UNIT 4 (05Hours) Technical Analysis (Ch15 of R&B) - Underlying assumptions of technical analysis, advantages, challenges, Technical trading rules and indicators. UNIT 5 (05Hours) Security Valuation: (ch 11 of R&B) - Theory of valuation- stream of expected cash flows, required rate of return, investment decision process- comparison of estimated values and market prices. Valuation of alternative investments- valuation of bonds, approaches to valuation of equity – why and when to use discounted cash flow valuation approach, why and when to use the relative valuation techniques, discounted cash flow valuation techniques, Infinite period DDM and growth companies, valuation with temporary supernormal growth, Present value of Operating free cash flows, Present value of free cash flows to equity. Relative valuation techniques: Earnings Multiplier model, Price/Cash flow ratio, Price/Book value, Price/Sales ratio. UNIT 6 (08Hours) Portfolio Management (Ch7 of R&B) - Risk aversion, definition of risk, Markowitz Portfolio Theory-alternative measures of risk, expected rates of return, variance of returns for individual investment and for a portfolio, Standard deviation of a portfolio, a three asset portfolio, Efficient frontier. Capital Market Theory – background and assumptions for Capital Market Theory, Risk free asset, The Market Portfolio, CAPM, SML, relaxing assumptions for CMT, Arbitrage Pricing Theory- empirical test for APT, Multifactor Models. UNIT 7 (04Hours) Equity Portfolio Management Strategies (Ch16 of R&B) - Passive vs Active Management, Index portfolio construction techniques, tracking error, methods of index portfolio investing, an overview of active equity portfolio management strategies- fundamental strategies and technical strategies,anomalies and attributes. Evaluation of Portfolio performance (Ch25 of R&B) - What is required of a portfolio manager, Treynor Portfolio Performance measure, Sharpe Portfolio Performance measure, Jensen Portfolio Performance measure, The information ratio performance measure, application of portfolio performance measures

UNIT 8 (03Hours) Asset Management (Ch24 of R&B) - Organization and Management of Asset Management Companies, Characteristics of Hedge Funds, its strategies and performance. Reference Books: 1. Investment Analysis and Portfolio Management by Reilly / Brown, 8e, Thomson 2. Investments by Bodie, Kane & Mohanty,6e, TMH 3. Investments Analysis and Management by Charles P Jones, Wiley


MARKETING MANAGEMENT

SEMESTER III

MEC: 341B


Course objective:

This course introduces students to the conceptual and practical operations of marketing management. The course is intended to provide a fundamental interdisciplinary orientation and a basic understanding of the functional area of marketing management.

UNIT 1 Designing Marketing Strategies (06 Hours)

Introduction to marketing management – Customer Satisfaction and Customer Relationships – Marketing Process as part of Strategic Planning – Effective Marketing Plan – Understanding the Marketing Environment, Ethics and Social Responsibility – E: Commerce.

UNIT 2 Behavioural Dimensions of Buyers and Markets (07 Hours)

Consumer Behaviour – Business to Business Marketing – Understanding Global Markets.

UNIT 3 Market Selection (07 Hours)

Marketing Research – Marketing Support Systems and Sales Forecasting – Market Segmentation, Targeting and Positioning – Relationship Marketing.

UNIT 4 Product Decision (07 Hours)

Product and Service Strategies – Brand Management – Product Identification – New Product Development.

UNIT 5 Distribution (06 Hours)

Marketing Channels – Supply Chain Management – Direct Marketing – Marketing Resellers.

Module 6 Promotional Decisions (06 Hours)

Marketing Communications – Advertising and Public Relations – Personal Selling – Sales Promotion.

UNIT 7 Pricing Decisions (06 Hours)

Pricing Concepts – Approaches to Pricing – Pricing Strategies.

Compulsory Reading:

1. Kurtz, David L, & Boone, Louis E, 12th Ed 2007, Principles of Marketing, Thomson South Western.


1. Perreault, William D & McCarthy, Jerome E, 15th Ed 2006, Basic Marketing, Tata McGraw Hill Publishing Company Ltd, New Delhi.

2. Kotler, Philip, Marketing Management, Prentice Hall India Limited, New Delhi.

MA APPLIED ECONOMICS OPERATIONS RESEARCH

MEC 431 SEMESTER IV

4 Hours / Week 4 Credits Course objective: This course introduces students to the theoretical framework of operations research models. The course is intended to provide an in-depth understanding of the methodology of OR and its applications in diverse fields in making effective decision making. UNIT 1: Introduction to OR (03 Hours) Brief history- stages of development- definitions- OR tools. UNIT 2: Linear Programming (10 Hours) Fundamentals of L P models - Graphic solutions of LP models – feasible solutions- infeasible solutions- unbounded solutions- Maximization of Objective Functions - Minimization of Objective Functions - Simplex Method with two variables- Simplex Method with more than two variables. UNIT 3: Transportation Problems (10 Hours) Transportation algorithm- Basic feasible solution of TP- North West Corner Rule- Least Cost method- Vogel’s Approximation Method – Optimality test- Stepping Stone method – Modi method UNIT 4: Assignment Model (05 Hours) Assignment problem structure and solution- maximization in assignment problem crew assignment problem UNIT 5: Net Work Models (07 Hours) PERT/ CPM Determination of Earliest Expected and Latest Allowable Times - Determination of Critical path – PERT Cost- Scheduling of a project- Application of PERT- Critical Path Method- Problems UNIT 6: Waiting Lines (05 Hours) Structure of Queuing models- Waiting Line models (05 Hours) UNIT 7: Inventory Management Models Basic Features of inventory decisions- EOQ- Quantity discounts- EPQ models- ABC Analysis UNIT 7: Game Theory (05 Hours) Basic concepts-definition- managerial applications- two-person’s zero-sum games.

Required Readings:

1. C. R. Kothari, Quantitative Techniques, Vikas Publications, New Delhi. 2. W.J. Baumol, Economic Theory and Operation Analysis, Englewood Cliff, Prentice

Hall, NJ. 3. Ackoff R L and Saienni M W, Fundamentals of Operation Research, Wiley, New York.


1. Hadley, G. Linear programming, Addison Wiley, Massachusetts. 2. Morse P M, Queeing, Inventory and maintenance, Wiley, New York. 3. Srivastava U.K, Shenoy G.V, and Sharma S C, Quantitative Techniques for

Management Decisions, Wiley Eastern, New Delhi.

M A APPLIED ECONOMICS LABOUR ECONOMICS

SEMESTER III MEC 432

Description This paper is designed for the students of M.A. Applied Economics. The paper deals with the application of microeconomic theory to the labour markets. It also deals with understanding the dualism and wage differentials which exist in the Indian labour market. Learning objectives:

1. Analyze the various factors influencing the demand and supply of labour in an economy in wage and employment determination.

2. To understand the implications of economic and political institutions in influencing wages and employment.

3. To understand the present state of industrial relations and social security in the country.

UNIT I: Introduction to Labour Economics Labour as a unique factor of production – Meaning, Concept , Significance & Peculiarities of Labour-Nature, scope and importance of Labour Economics-Participants in the labour market- Nature, Characteristics of the Indian Labour Market UNIT II: Labour Market Analysis Demand for and supply of labour- determinants of demand for and supply of labour – Supply of labour :Static Labor-Leisure Choices-Effects of Social Programs and Income Transfers- The Life-Cycle Model -Investments in Human Capital- Collective Models of Household Labor Supply- Occupational Choice-Demand for labour: Static Cost, Profit and Labor Demand Functions-Elasticity of Derived Demand: the Hicks-Marshall Rules UNIT III: Wage Determination Concept of wages, methods of wage payment, Wage determination: theories of wages, labour market dualism: formal and informal sector labour market, wage differentials in India- gender differences in wages, analysis of gender wage gaps- human capital model- wage structure in India, Wage policy in India. ] UNIT IV: Employment

Measurement of employment: usual, weekly and daily status unemployment measures, Nature, causes and measures to solve problems of unemployment –Employment Policy –– Problems of Agricultural Labour, Child Labour and Female Labour- Effects of unemployment insurance and welfare programmes on supply of labour, Labour force participation rates in India, sectoral employment trends in India. UNIT V: Trade Unions and Industrial relations Evolution of unions and collective bargaining- Recent union membership trends and determinants- Arbitration-Union impact on wages and benefits, Collective bargaining :effectiveness and economic analysis of collective bargaining trends- Workers participation in management- Industrial relations – Industrial conflicts- Social Security: issues, problems and prospects. Course textbooks

1. Roy B. Helfgott, Labour Economics, Random House Publication, New York 1974.

2. Cahuc, Pierre, and Andre Zilberberg, Labour Economics, Cambridge, Mass. and London: MIT Press, 2004.

3. Tyagi B.P., Labour Economics and Social Welfare, Jai Prakash Nath and Co, 2011.

References:

Ashenfelter, Orley, and Richard Layard. The Handbook of Labor Economics. Vol. 1 and 2. New York: North-Holland, 1986; Vol. 3A, 3B, and 3C, 1999. ISBN: 0444878580

Laffont, Jean-Jacques, and David Martimort. The Theory of Incentives: The Principal-Agent Model. Princeton, N. J.: Princeton University Press, 2002. ISBN: 0691091846.

Pissarides, Christopher. Equilibrium Unemployment Theory. Cambridge, Mass. and London: MIT Press, 2000. ISBN: 0262161877.

Lazear, Edward. Personnel Economics. Cambridge, Mass. and London: MIT Press, 1995. ISBN: 0262121883.

Helfgott, Labour Economics, (New York: Random House 1974) McCOnnell, Capbell R., and Stanley.L.Brue, Contemporary Labour Economucs (Singapore,McGrew-Hill Book Co 1989) Reynolds, Lloyd., Labour Economics and LabourWelfare (New Delhi: Prentice – Hall of Inida Pvt. LTd. 1978)

Sepsfore, David and Zafiris Tzannatos., Current Issues in Labour Economics (Hong Kong ,Macmilan 1990) Singh, V.B and Saran, A.K., Industrial Labour in India (Mumbai: Asia Publishing House 1960) Verma, Pramod., Labour Economics and Industrial Relations (New Delhi: Tata McGraw Hill Pvt. Ltd.) Datt, G. (1966) , Bargaining Power , Wages and Employment : An Analysis of Agricultural , Labour : Marketsin India ; Sage Publishers , New Delhi . Hajela, P.D. (1998) , Labour Restrucing in India : A Critique of the New Economic Policies , Commonwealth Publishers, New Delhi. Jhabvala, R.and R.K. Subrahmanya (Eds.) (2000), The Unorganised Sector : Work Security and Social Protection ; Sage Publications, New Delhi Lester, R.A. (1964) , Economics of Labour (2nd Edition), Miacmillan, New Work. McConnell, C.R. And S.L. Brue (1986) , Contemporary Labour Economics , McGraw –Hill , New York. Papola ,T.S.P.P. Ghosh and A.N. Sharma (Eds.) (1993), Labour , Employment and Industrial Relations in India , B.R. Publishing Corporation , New Delhi. T.N. Srinivasan (Eds.) The Handbook of Development Economics North- Holland, New York. Venkata Ratnam, C.S. (2001) , Globalization and Labour – Management Relations : Dynamics of Changes , Sage Publications/Response Books , New Delhi Labour Economics by F. Ray Marshall, Vernon M. Briggs, Jr. and Allan G. King, Richard D. Irwin, INC Labour Welfare, Trade Unionism and Industrial Relations by Punekar, Deodhar and Sankaran, Himalaya Publishing House

MA APPLIED ECONOMICS II SEMESTER

Industrial Economics MEC 433

4 hours/week 4 credits Total Hours: 60 DESCRIPTION The theory of Industrial Economics is one of the fundamental subjects in the M.A Economics programme. Industrial Economics can help students to enlarge their knowledge of the modern Economics and to show them a certain applied aspect of the theoretical analysis. Industrial Economics is to develop the students’ comprehension of both industrial models and their links with practice with a special accent on government policy.

COURSE OBJECTICVES

• To present the fundamental models of the firms’ behaviour under different market structures.

• To educate the knowledge of how the firms interact in different markets, what are the main effects of their interactions for the social welfare.

• To provide a thorough knowledge about the economics of industry in an analytical manner in the Indian context.

• To make the students aware of the basic issues such as productivity, efficiency capacity utilization involved in the industrial development of India.

UNIT I A Prelude to Industrial Economics (10 hours) Market structure – conduct performance paradigm – Market concentration and monopoly power – Causes and measurement – Market concentration and performance – Extent of market concentration in India – Recent trends – Vertical integration, diversification and merger (motives and measurement) UNIT II Theory of the Firm and Industrial Location Analysis (15 hours) The behavioural theory of the firm; Transaction cost theory; the property Right Theory; The Agency Theory and the Resource Based Theory- Growth of the firm; Need for growth and the theory of the Growth of the firm -Theories of industrial location –Weber and Sergeant Florence – Factors affecting location- Industrial location trends in India UNIT III Industrial Finance (10 hours) Sources (internal and external) – Financial Statements – Analysis of financial ratios and their interrelatedness, Standards for comparison of financial ratios – Problems of financial analysis

UNIT IV Investment Decisions (10 hours) Nature and Types of investment decisions-Methods of project evaluation; the pay back period, NPV, IRR- Assessment of investment appraisal techniques- Profitability and its determinants. UNIT V Innovation and Advertising (05 hours)

The process of Innovation; Measurement of innovation; the theory of Technological Innovation-Advertising Strategy

Module VI Industrial Labour (05 hours)

Industrial labour, Employment dimension of Indian industry –industrial legislation –industrial relation – industrial disputes.

UNIT VI I (05 hours)

Industrial Development of India and Government Regulation of Industries Pattern of industrialization since independence – Changing structure of industries Debates on industrial stagnation – Issues in industrial development in the context of globalization - Evolution of industrial policy – Performance of licensing policy – Rationale of delicensing – Regulation of monopolies Skill Development: 1. Individual presentations on the structure of markets 2. Presentation on the practical operations of firms. 3. Case studies 4. Presentations on measures of policy intervention by the government to regulate the working of monopolies Prescribed Texts 1. Barthwal, R.R. (2010). Industrial Economics: An Introductory Text Book, New Age International, ND. 2. Industrial Organization: Contemporary Theory and Practice, Pepall, Lynne; Daniel J. Richards; George Norman. 2nd.ed South-Western. 2002. 3. Industrial Economics, B.N.Narayan, Anmol Publications Pvt. Ltd. 4. Ahluwallia, I.J. (1992): Industrial Growth in India, OUP, Delhi. References: 1. Applied Industrial Economics, Ed. By Lois Phlips. Cambridge University Press. 1998. 2. Industrial Organization- A Strategic Approach, Church J. R, Ware R. Irwin, McGraw Hill. 2000. 3. Organisation, Theory and Applications, Oz Shy, MIT Press 1995 4. Singh A and A.N.Sadhu (1988) Industrial Economics, Himalaya Publishing House, Mumbai

5. Francis cherunilam (1994) Industrial Economics,Tata McGraw-Hill publishing company limited,NewDelhi.

M.A ECONOMICS SEMESTER IV

ENVIRONMENTAL & RESOURCE ECONOMICS MEC 434

4 Credits 60 hours The Prerequisite for this course is Microeconomic Theory. The total lecture hour for this course is 60. Apart from the prescribed textbooks the students are also are encouraged to read the annual reports, News Letters and other relevant journal articles.

Basic Concepts : 5(L) An introduction to Environmental Economics; Economy - Environment interaction; The Material Balance principle, Entropy law. Environment Vs Development: 5(L) Relation between development and environment stress; Environmental Kuznet's curve. Economics of Exhaustible Resources : 10(L) Hotelling's rule; Solow-Harwick's Rule; Market structure and optimal extraction policy; Uncertainty and the rate of resource extraction; Resource scarcity. Economics of Renewable Resources : 10(L) Economic models of forestry and fisheries; Extinction of species; Economics of Biodiversity. The Theory of Externality and Public Goods : 10(L) Concepts; Market Failure; Pigouvian Solution; Buchanan's Theory; Coase's theorem and its critique; Pigouvian vs. Coasian solution; Detrimental externality and non-convexities in the production set; Property rights; Collective action. Techniques of Valuation : 20(L) Market and non-market valuation; Physical linkage methods; Abatement cost methods; Behavior linkage methods - Revealed and stated preference; Social cost benefit analysis; Environmental impact assessment.

L : 60 L : Lectures Texts:

1. Hanley, N, J.F. Shogren and B. White. Environmental Economics in Theory and Practice.New York: MacMillan, 1997

2. Arrow, K. J. and Scitovsky, T. Readings in Welfare Economics - Part III. Richard Irwin Inc, 1969.

3. Bromely, D. W. (ed.). Handbook of Environmental Economics. Blackwell, 1995 4. Jempa, C. and Munasinghe, M. Climate Change Policy: Facts, Issues and Analyses.

Cambridge: Cambridge University Press, 1998 5. Kolstad, Charles, Environmental Economics, OUP, 2000 6. Sankar, U. (ed.). Environmental Economics (Readers in Economics), OUP, 2000

References:

1. Coase, R. H. "The Problem of Social Cost", in Breit, W. and Hochman, H.M. (eds.) Readings in microeconomics. Rinehart and Winston Inc., 1968.

2. Cropper, M. L. and Oates, W. E. "Environment economics: A survey". Journal of Economic Literature, June 1992.

3. Dasgupta, P and Heal, G. M. Economic Theory and Exhaustible Resources. Cambridge: Cambridge University Press, 1979.

4. Field, B. C. Environmental economics: an introduction. New York: McGraw Hill, 1994. 5. Fisher, A. C. "Environment and resource economics", in Oates, W.E. (ed.) New horizons in

environmental economics: selected readings. Cheltenham, U.K.: Edward Elgar, 1995. 6. Hardin, G. "The tragedy of commons", in Markandya, A. and Richardson, J. (eds.) Earthscan

reader in environmental economics. London: Earthscan Publications, 1993. 7. Oates, W. E. Economics of the environment. Cheltenham, U.K.: Edward Elgar, 1992. 8. Perrings, Charles. "Ecological resilience in the sustainability of economic development", in

Sylvie, F., Pearce, D., and Proops, J. (eds.) New horizons in environmental economics: model of sustainable development. Cheltenham, U.K.: Edward Elgar, 1996.

9. World Bank. Development and the environment. World Development Report series. Washington, D. C.: World Bank, 1992.

.

MA APPLIED ECONOMICS DISSERTATION

MEC 434 SEMESTER IV

DESCRIPTION This paper is a compulsory paper in the fourth semester of post graduate course in Applied Economics. Through this paper students undertake an original research work based on the area of his/her interest and academic leaning in the previous semesters. This also becomes a thorough training in the nuances of analytical and research skills.

LEARNING OBJECTIVES

• To inculcate in students the rigour of research work.

• To imbibe in students the spirit of inquiry.

• To encourage students to do academic reading of journal articles

• To be informed about new developments in the field of economics research.

Methodology

The dissertation work is carried out under the guidance of a faculty with scheduled meetings for discussion of the progress of the work and timely interim presentations before a panel of faculty to assess the quality of the work. The final submission of the dissertation is followed by a viva voce on the topic of the research.

Evaluation at the end of the semester is based on the following categories:

• Regularity of meeting with guide for discussions 25% weightage

• Presentation of the synopsis by student 10 weightage

• Mid-term review by student 15% weightage

• Final submission of the dissertation and viva voce 50%.

Skill Development

1. Writing literature review.

2. Conceptualising research problem.

3. Writing research paper.

4. Analysing economic issues.


DERIVATIVES

MEC 441A

SEMESTER IV


Objective of the course:

This course on Derivatives is intended to introduce the students of MA (Applied Economics) who choose this course as electives, to the concepts of derivatives and its applications in the area of finance.

UNIT 1 (3 hours)

Introduction to Derivatives (Ch1 of Fundamentals of Futures and Options markets by JCH)

Exchange traded markets, OTC markets, Forward and Future contracts, Options, Types of traders – hedgers, speculators and arbitrageurs.

UNIT 2 (5 hours)

Mechanics of futures and forward markets (Ch 2 of JCH)

Background, Specification of a futures contract, convergence of futures prices to spot price, daily settlement and margins, newspaper quotes, delivery, types of traders and types of orders, forward vs futures contracts

UNIT 3 (3 hours)

Determination of forward and futures prices (Ch 3 of JCH)

Investment assets Vs Consumption assets, short selling, measuring interest rates, forward price for an investment asset, known income, known yield, valuing forward contracts, stock index futures, futures on commodities, cost of carry

UNIT 4 (5 hours)

Hedging strategies using futures (Ch 4 of JCH)

Basic principles, arguments for and against hedging, basis risk, minimum variance hedge ratio, cross hedging, stock index futures, rolling the hedge forward

UNIT 5 (10 hours)

Swaps (Ch 6 of JCH)

Mechanics of interest rate swaps, day count issues, confirmations, the comparative advantage argument, the nature of swap rates, determining the LIBOR/ Swap zero rates, currency swaps, credit risk

UNIT 6 (17 hours)

Mechanics of options markets (Ch 7 of JCH)

Types of options, options positions, underlying assets, specification of stock options, trading, commissions, margins

Properties of stock options (Ch 8 of JCH)

Factors affecting option prices, assumptions and notations, upper and lower bounds for option prices, put-call parity, effect of dividends

Trading strategies involving options (Ch 9 of JCH)

Strategies involving a single option and a stock, spreads, combinations, other payoffs

Options on stock indices and currencies (Ch 12 of JCH)

A simple rule, Pricing formulas, Binomial trees, Options on stock indices, currency options

UNIT 7 (2 hours)

Derivatives mishaps and what we can learn from them (Ch 21 JCH)

Lessons for all users of derivatives, lessons for financial institutions, lessons for nonfinancial corporations

Reference Books:

1. Fundamentals of Futures and Options Markets by John C Hull, 4e, Pearson Education

2. Options, Futures and other Derivatives by John C Hull, 7e, Pearson Education 3. Derivatives and Financial Innovations by Bansal & Bansal, TMH 4. Risk Management and Derivatives by Rene M Stulz, Thomson

MA APLLIED ECONOMICS HUMAN RESOURCE MANAGEMENT

SEMESTER IV MEC 441B

DESCRIPTION This paper develops how to managing and improving business performance through HR strategy. Strategic staffing: learn how to attract, recruit and retain the best talent. The course of HR performance management and the analysis of major problems including skill deficits and dysfunctional levels of labor turnover. HR recruitment, interviewing and selection, negotiation skills development HR orientation, socialization, training and development HR performance appraisal design, pay, rewards, compensation, recognition and promotion.

OBJECTIVES The objective of this course is to train the students in the various theoretical and practical aspects - motivation, quality of work of HRD and to focus on development of various intervention techniques. To increase student knowledge of theories and practices dealing with factors in people and in the work environment which influence people and problems To provide basis to the students for understanding the nature, concepts, principles & practices in Human Resource Management To enhance student knowledge of Manpower planning and development, organizational climate, and the provision of personnel services To offer students on experiential analysis to understand the challenges of CPOs and HR Managers in developing their organizations To provide insights on how to develop strategies, initiatives and programs to introduce and sustain competitive HR advantage in organizations To emphasizes the value of strategic Human Resources management in business performance with focus on organization design, change and development. To addresses the human capital as a critical role in firm's viability in the knowledge economy UNIT-I: Introduction to HRM: Concept of Management and Human Resource Management - Significance of HRM Scope of HRM Features of HRM – HRM Model – Emergence & Evolution of HRM – Functions of HR. Strategic Human Resource Management: Nature of Strategies and Strategic Management - Strategic Management Process - Role of HRM in Strategic Management UNIT-II: Recruitment and Selection: Recruitment: Definition Meaning, Importance, Goals - Features of Recruitment – Factors influencing recruiting efforts – Constrain – Sources of recruitment Selection: Meaning and Purposes of Selection Cost of selection – Importance – Selection decision outcomes – Selection Process.

UNIT III: Training and Development: Concept and Meaning of Training, Importance & Objectives – Training and Learning, (Theories & Principles of Learning) – Determining Training Needs & Priorities – Formal Employee Training Methods, Management Development Process – Methods for developing Managers. Performance Appraisals: Meaning, Importance, Objective, Appraisal Methods, Process. UNIT IV: Job Analysis: Definition, Objectives of Job Analysis, Uses of Job Analysis – Methods - Process (Functional Job Analysis, Position Analysis Questionnaire) – Purposes of Job Analysis (Job Description, Job Specification, Job Evaluation) Promotion: Meaning & Importance, Objective, Purposes – Bases – Arguments for and against seniority & Merits – Promotion Policy – Promotion Decisions Demotion: Meaning – Causes – Demotion policy-Transfer: Meaning, Needs of Transfer, Benefits of Transfer – Purposes and types – Transfer policy UNIT – V: Human Resource Planning: Concepts – Elements – Importance – Process Rewarding the Employees: Rewards and expectancy theory – Types of rewards – Qualities of effective rewards – Criteria on which rewards can be distributed Human Resource Information Systems: Applications – Necessary capabilities of a HRIS – Systems functions – Steps in Implementing and HRIS – Benefits – Limitation of HRIS UNIT – VI: Virtual Organization and Emerging HR Trends: Characteristics of Virtual Organization - Features of Virtual Organization. - Types of Virtual Organization- Emerging HR issues in Virtual Organization- Career Dynamics- Performance Management- Sharing Information- Selection Process- Role Demand and Drives SKILL DEVELOPMENT Develop the core human resources management skills and competencies. The core competencies include HRM knowledge, planning, control, problem-solving and communication. The course develops how to managing and improving business performance through HR strategy. Strategic staffing: learn how to attract, recruit and retain the best talent. The course of HR performance management and the analysis of major problems including skill deficits and dysfunctional levels of labor turnover. HR recruitment, interviewing and selection, negotiation skills development HR orientation, socialization, training and development HR performance appraisal design, pay, rewards, compensation, recognition and promotion. RECOMMENDED BOOKS: 1. Managing Human Resources – Bohlander et all – Cengage Learning 13 Ed., 2004. 2. Human Resource Management, Text & Cases – VSP Rao, Excel Books, 2005 REFERENCE BOOKS:

1. Human Resource Management – Text & Cases – K. Ashwatappa; 5th Edition, TMH. 2. Human Resource Management - Cynthia Fisher, Shaw – Wiley / Biztantra, 5/e, 2005 3. Human Resource Management – Gary Dessler, Person Publications, 10th Edition 4. Human Resource Management -Biswajeet Patnayak - PHI 3IE, 2005 5. Pramod Verma: PERSONNEL MANAGEMENT IN INDIAN ORGANISATIONS, (Oxford & IBM Publishing Co. Ltd). 6. Venkata Ratnam C. S. & Srivatsava B. K.: PERSONNEL MANAGEMENT AND HUMAN RESOURCES (Tata Mc-Graw Hill). 7. Bohlander, Snell, Sherman: MANAGING HUMAN RESOURCES [Thomson - South Western]

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