Revised Syllabus of Economics

This paper bridges the gap between introductory and advanced microeconomic theory. It emphasizes the optimization behavior of consumers and producers under various market conditions.

• Consumer Behavior: Cardinal vs. Ordinal utility analysis, Indifference Curve approach, Hicksian and Slutsky decomposition, Revealed Preference Theory.
• Production and Cost Functions: Concepts of production function, laws of variable proportions, Isoquants, Isocost lines, Economies of scale, and cost curves in the short and long run.
• Market Structures - Perfect Competition: Revenue curves, equilibrium of the firm and industry in the short run and long run.
• MonoPoly: Price and output determination under monopoly, short-run and long-run equilibrium, price discrimination.
• Monopolistic Competition: Product differentiation, equilibrium of the firm, excess capacity debate.

This paper introduces students to the determination of national income and the functioning of the aggregate economy.

• National Income Accounting: Circular flow of income, GDP, GNP, NNP, Personal and Disposable Income, measurement methods (Income, Expenditure, Value Added).
• Classical Theory of Employment: Says Law of Markets, Pigous Wage-cut theory, Keynes critique of the classical theory.
• The Principle of Effective Demand: Aggregate Demand and Aggregate Supply functions, consumption function, psychological law of consumption, investment determinants (MEC and interest rate).
• Multiplier Principle: Static and dynamic multipliers, leakages, and the employment multiplier.
• Simple Model of Income Determination: Equilibrium income determination in two, three, and four-sector models.

Building on basic statistics, this semester focuses on specific tools necessary for economic analysis, particularly index numbers and correlation.

• Index Numbers: Meaning, uses, and problems in construction. Unweighted (Simple aggregative, Simple average of price relatives) and Weighted index numbers (Laspeyres, Paasches, Fishers Ideal). Cost of Living Index numbers and Chain Base Index numbers.
• Correlation Analysis: Types of correlation, Karl Pearsons coefficient of correlation, Spearmans Rank correlation, Probable error.
• Regression Analysis: Linear regression, least squares method, regression coefficients, distinction between correlation and regression.
• Time Series Analysis: Components of time series (Trend, Seasonal, Cyclical, Irregular), methods of measuring trend (Moving average, Least squares).

This paper provides a historical perspective, tracing the development of the Indian economy from pre-independence to the pre-liberalization era.

• Overview: Characteristics of the Indian economy at the time of independence, colonial exploitation.
• National Income in India: Trends in growth and structure, sectoral contributions (Agriculture, Industry, Services).
• Planning in India: Objectives, strategies, and achievements of planning. A brief review of major Five-Year Plans.
• Population and Human Resource Development: Demographic trends, population size, growth rate, density, occupational structure, and issues of unemployment.
• Infrastructure: The importance of transport, energy, and communication in economic development.

This semester completes the study of market structures and introduces factor pricing and general equilibrium theory.

• Oligopoly: Kinked demand curve, Collusive models (Cartels), Price leadership models.
• Factor Pricing: Marginal Productivity Theory, determination of wages, rent, interest, and profit.
• Welfare Economics: Pareto optimality, the Edgeworth Box, social welfare functions, compensation criteria (Kaldor-Hicks, Scitovsky).
• General Equilibrium: Inter-relationship of markets, Walrasian systems.
• Market Failures: Externalities (positive and negative), public goods, asymmetric information.

This paper introduces monetary theory, trade cycles, and policy frameworks used to manage the economy.

• Theory of Money: Functions of money, demand for money (Keynesian Liquidity Preference, Friedmans Quantity Theory), supply of money.
• IS-LM Framework: Derivation of IS and LM curves, general equilibrium, shifts in curves (fiscal and monetary policy).
• Inflation and Unemployment: Phillips curve, stagflation, demand-pull and cost-push inflation.
• Trade Cycles: Meaning, phases, theories (Hawthorns psychological theory, Samuelsons multiplier-accelerator interaction).
• Business Cycles in India: Features and causes specific to the Indian context.

This paper examines the role of the government in the economy, focusing on taxation and public expenditure.

• Public Finance Basics: Distinction between private and public finance, the functions of the modern state (Musgrave's classification).
• Public Expenditure: Causes of growth, Wagners Law, Peacock-Wiseman hypothesis, effects of public expenditure.
• Taxation: Principles of taxation (Ability to pay vs. Benefit principle), canon of equity, canon of efficiency. Characteristics of a good tax system.
• Impact of Taxes: Incidence and shifting of tax, effects on production and distribution.
• Public Debt: Sources, types, effects, and debt management. Budgets: Types and balanced budget theorem.

Focusing on the post-1991 era, this paper analyzes the structural changes, liberalization, and sector-specific performances of the Indian economy.

• Economic Reforms: Background of the 1991 crisis, LPG policy (Liberalization, Privatization, Globalization), disinvestment, WTO and India.
• Agriculture: Role in economy, Green Revolution, post-reform performance, issues of food security, irrigation, and agricultural finance.
• Industry: Industrial growth strategy, MSME sector, New Industrial Policy, and the Make in India initiative.
• Services Sector: Growth of IT and ITES, tourism, banking, and insurance.
• External Sector: Foreign trade policy, balance of payments crisis, Foreign Direct Investment (FDI), and exchange rate regimes.