Centre For Development Studies

C D S
Centre for Development Studies
M.A. Applied Economics

Syllabus

Prasanth Nagar, Ulloor
Thiruvananthapuram - 695 011
Kerala, India.
www.cds.edu
Semesters and Courses
Course Credits
Semester 1
101 Microeconomics 4
102 Macroeconomics 4
103 Statistics 4
104 Mathematics for Economics 4
Semester 2
201 Growth and Development 4
202 Econometrics 4
203 International Economics 4
204 Indian Economic Development 4
Semester 3: Any 4 Optionals from the following
301 Public Economics 4
302 History of Economic Thought 4
303 Topics in Applied Econometrics 4
304 Economics of Technology and Innovation 4
305 Population and Development 4
306 Industrial Organization 4
307 Economic History of Modern India 4
Semester 4: Project and 3 Optionals
401 Project 4
Any three Optionals from the following
402 Environmental Economics 4
403 Gender and Development 4
404 Labour Economics 4
405 Law and Economics 4
406 Issues in Indian Agriculture 4
407 Issues in Indian Industry 4
408 Political Economy, Development and Governance 4
409 Economics of Project Evaluation 4
2
Syllabus
101: MICROECONOMICS
The objective of this course is to introduce students to the central concepts,
theories and methods in microeconomics. As some of the students are likely to
be from a non-economics background, the approach will be gradual, gaining
in complexity as the course proceeds. Starting out with the essential topics
of consumption and production theory, the instruction proceeds to familiarise
students with the basic tools of game theory. The latter are applied to illumi-
nate possible outcomes in the areas of oligopoly and industrial organisation.
Advanced topics in microeconomics ranging from general equilibrium theory,
moral hazard and adverse selection problems to externalities and market failure
complete the course.
Course Outline
1 Introduction
Here basic principles of economic analysis and economic decision making
are introduced particularly for the benefit of students from non-economics
background. Chapter 1 of Frank (1997) and chapter 2 and 3 of Krugman and
Wells (2005) are the useful references here.
2 Consumer Behaviour
Decision making under certainty– Consumer Preferences and Axioms of Pref-
erences – Utility maximization – Indirect utility function – Demand function
– Important identities – Roys identity – The Slutsky equation – Properties of
demand functions – Duality in consumption – Revealed preference – Homoth-
etic utility functions – Aggregate demand – aggregation across consumers and
3
goods – Consumer surplus – Uncertainty, expected utility and risk aversion.
3 Producer Behaviour
Concept and measurement of input and output–Technology-Convex technology–
Technical rate of substitution-Elasticity of substitution-Returns to scale-Homogeneous
and homothetic production functions-Profit maximization-Profit function and
its properties-Derivation of supply and factor demand functions from profit
function–Cost minimization-Factor demand functions-Cost function and its
properties–Duality
4 Firm Behaviour
Competitive markets–partial equilibrium– Monopoly–welfare implications Ű
price discrimination and its welfare implications.
5 Game theory
Extensive and normal form representation of games– Nash equilibrium (in
pure and mixed strategies); definition and existence – subgame perfection
in dynamic games. Applications: strategic behaviour of firms in a market–
Bertrand, Cournot and Stackleberg models – and entry deterrence.
6 Factor Markets
Labour – competitive firm and short run and long run demand for labour –
imperfect competition and demand for labour – Capital – financial capital and
real capital – demand for real capital- the relationship between rental rate and
interest rate – CAPM Model.
7 General Equilibrium Theory

Exchange – Production and Walrasian Equiblria.
4
8 Information Economics
The principal agent problem– monopoly and competitive solutions with full
information – monopoly and competitive solutions with imperfect information
– adverse selection –the lemon market and adverse selection – signalling and
screening models – optimal contract design in moral hazard applications.
9 Externalities and Market Failure

Externalities – public good – merit good – club good – Market Failure – Second
best problems.
Suggested Readings
1. Frank, Robert H. (1997) Microeconomics and Behaviour, The McGraw-Hill
Companies, Inc.
2. Krugman, Paul. and Wells, Robin. (2005) Microeconomics, Worth Publish-

ers.
3. Varian, H. R. (1992),Microeconomic Analysis Third Edition, W. W.Norton &

Company, New York.
4. Dixit. Avinash., Skeath, Susan. And Reiley, David H. (2010) Games of

Strategy 3rd Edition, Viva books New Delhi.
5. Mukherjee, A. (2002), An Introduction to General Equilibrium Analysis, Ox-

ford University Press.
6. Osborne, Martin J. (2009) An Introduction to Game Theory, Oxford University

Press.
5
C D S

Syllabus
102: Macroeconomics
The objective of the course is to equip the student with an understanding of
the principal issues in macroeconomics, ranging from the determination of the
level of output and inflation to the policy options available for influencing these
variables. In the process the main currents in the subject, from the General
Theory to the early monetarist critique and its culmination in the New Classical
Macroeconomics are covered. In the spirit of a course in Applied Economics
the Indian case will be explicitly referred to where relevant and an account of
the recent macroeconomic history of the country provided.
Course Outline
1 National income accounting

The measurement of national income – the concept of value added; the essential
macroeconomic identities; National Income statistics for India.
2 Determination of output in a market economy

The principle of effective demand and the multiplier; the central role of invest-
ment; the foreign–trade multiplier.
3 Employment
The possibility of an underemployment equilibrium; involuntary unemployment
as market failure; prices, wages and unemployment; Keynesian Unemployment
and Classical Unemployment.
6
4 Money
The functions of money; money and uncertainty or what gives money its
significance; Keynesian versus monetarist perspectives on money; the idea of an
endogenous money stock; the role of monetary policy when the money supply
is endogenous.
5 Stabilisation policy
The Keynesian approach, the neo-classical synthesis and the monetarist critique;
Friedman on the use of the Phillips Curve as an instrument of policy; the
micro-foundations of macroeconomics.
6 The Rational Expectations Revolution

The idea of rational expectations; rational expectations as efficient forecasts; the
Lucas Critique.
7 The New Classical Macroeconomics
8 Dynamic Inconsistency and the Case for Rules
9 Inflation
The dynamics of inflation; “inflation is always and every where a monetary
phenomenon”; a structuralist model of inflation for India.
10 Budget Deficits and the Public Debt

Ricardian equivalence; the monetisation of the deficit and the public debt;
crowding out or crowding in; instability and the Domar condition; IndiaŠs
Public Debt Statistics.
7
11 Macroeconomic policy in the open economy
The implication of alternative exchange rate regimes; the relation between
inflation and the balance of payments; the Dutch Disease; macroeconomic
policy in an open economy; the Mundell – Flemming Model; stabilization of
the open economy.
12 The global financial crisis

Genesis and implications for the theory.
Readings
1. Amit Bhaduri (1988): Macroeconomics, New Delhi: Macmillan.
2. W. Carlin and D.Soskice (1990) Macroeconomics and the Wage Bargain, Ox-
ford: OUP, Chapters 1-5,
3. J. M. Keynes (1936): The General Theory of Employment, Interest and Money,

New York: Harcourt, Brace & Jovanovich, selected chapters.
4. M. Friedman (1968): “The role of monetary policy”, American Economic

Review, vol.58, No.1, pp.1–17.
5. N. Kaldor (1976): “Inflation and recession in the world economy”, Eco-

nomic Journal.
6. S. Sheffrin (1987): Rational Expectations, Cambridge University Press, Cam-

bridge.
7. Phelps, E. (1990): Microeconomic Foundations of Employment and Inflation

Theory, New York: Norton
8. Phelps, E. (1990): Seven Schools of Macroeconomic Thought, Oxford: Claren-

don.
9. Fleming, J.M. (1962):, Domestic Financial Policies under Fixed and under
Floating Exchange Rates, IMF Staff Papers, November.
10. J. Tobin (1980): Asset Accumulation and Economic Activity, Chicago: Chicago
University Press.
8
11. G. Akerlof and R. Shiller (2009): Animal Spirits; How human psychology
drives the economy and why it matters, Princeton: PUP.
12. C. Rangarajan (2004): Select Essays on the Indian Economy, vol. 1, New
Delhi: Academic Publishers.
13. Pulapre Balakrishnan (1991): Pricing and Inflation in India, New Delhi:
OUP.
9
C D S

Syllabus
103: Statistics
This course covers the statistical foundations of data analysis including
the statistical theory and its applications in social sciences. In particular, this
module broadly covers the descriptive statistics, modern exploratory data
analysis, theory of probability, standard statistical distributions, estimation
and hypothesis testing, and non-parametric tests. The specific objective of this
module is as follows:
• To provide an understanding of the basic concepts and methods of Statis-

tics, for application in data analysis.
• To get statistical skill required for the analysis of socio-economic data.
• To provide hands-on training in data analysis (along with computer

applications).
• Emphasis is on application (including analysis and interpretation) rather

than theoretical derivations. The idea is to impart training on how to
make an argument with data.
1 Course Outline
• Describing and summarising univariate distributions: frequency table,
histogram, distinguishing features, mean-based and order-based numeri-
cal summaries (descriptive statistics), visual techniques such as box plots,
transformation.
• Introduction to probability, rules of probability, random variables and

probability distributions, mean and variance of distributions, joint distri-
bution and its characteristics, standard distributions and their properties,
simple random sampling and sampling distributions; Law of large num-
bers; Central limit theorem.
10
• Estimation: Point and Interval estimation; Properties of estimators; Meth-
ods of estimation: least square method, method of moments and maxi-
mum likelihood.
• Tests of Significance: tests of mean and proportion, tests of difference in

means and proportions, small sample and large sample tests, bootstrap
and nonparametric Methods.
• Bivariate distributions: Contingency tables, joint and conditional distribu-

tions, odds-ratio, test of independence, Analysis of variance; Analysis of
Covariance.
• Index Numbers.
• Introductory sampling methods and large scale sample surveys in India.
2 Teaching Methods
Classroom lectures, and computer workshops using R and STATA for data
analysis.
3 Evaluations
Written examinations and Assignment/homework.
Essential Readings
1. Hamilton, L. (2003) Statistics with STATA, Cengage. (Eight Edition)
2. Marsh, Catherine (2009) Exploring Data: An Introduction to Data Analysis

for Social Scientists, Polity Press, UK, Second Edition
3. Mukherjee, C., White, H. & Wuyts, M., (1997) Econometrics and Data
Analysis for Developing Countries, Routledge, London.
Recommended Readings
1. Clark, Megan J. and John A. Randal (2010)A First Course in Applied Statistics,
2nd edition, Pearson Education.
11
2. Hamilton, Lawrence C. (1990) Modern Data Analysis: A First Course in
Applied Statistics, Brooks/Cole, California.
3. Lewis, Margaret (2011) Applied Statistics for Economists, Routledge.
4. Moore, D.S. and McCabe, G.P. (2003) Introduction to the Practice of Statistics,
W.H. Freeman & Company, New York.
5. Ott, Lyman R and Longnecker, Michael (2008) An Introduction to Statistical

Methods and Data Analysis, Sixth Edition, Brooks/Cole, USA.
6. Rohwer, Götz (2012) Models in Statistical Social Research, Routledge.
7. Sweet, Stephen A and Karen Grace-Martin (2008) Data Analysis with SPSS:
A First Course in Applied Statistics, 3rd Edition. Allyn & Bacon.
12
C D S

Syllabus
104 : MATHEMATICS FOR ECONOMICS

This is a course on the basic mathematical methods necessary for understand-
ing the modern economics literature. Mathematics provides a logical, systematic
framework within which quantitative relationships may be explored, and an
objective picture of the reality may be generated. The deductive reasoning
about social and economic phenomena naturally invites the use of mathematics.
Among the social sciences, economics has been in a privileged position to re-
spond to that invitation, since two of its central concepts, commodity and price,
are quantified in a unique manner, as soon as units of measurement are chosen.
Thus a thorough knowledge of mathematics is indispensable for understanding
almost all fields of economics, both applied and theoretical. The goal of the
course is to make students understand, assimilate and thus capable of using the
mathematics required for studying economics at the masters level. This level of
mathematics also represents a great fraction of what is required for studying
applying economics at the doctoral level. As a way of showing the importance
of mathematics in economics, all mathematical concepts studied in this part of
the course will be illustrated with some applications to economics.
Course Description and Outline

The concepts underlying the three analytical spheres of economics, viz.,
statics, comparative statics and dynamics are adaptations from physics. The
present course is intended to deal with some of the quantitative methods in
these three spheres of economic analysis. It is structured in 42 hours of lectures
and tutorials over 14 weeks of a semester. The details are given below:
1 Introduction
Significance of Mathematics in Economics
13
2 Static Analysis
Real numbers; Set theory; Fuzzy set theory; Relations and functions; Economic
equilibrium analysis Linear model: Matrix algebra: Matrix operations; Commu-
tative, associative, distributive laws Transposes; Determinants; Nonsingularity;
Laplace expansion; Matrix inversion; Cramer’s rule; Applications in Economics;
Input-output model.
3 Comparative Statics
The derivative; Limit; Continuity; differentiability; Rules of differentiation;
Partial differentiation; Total differentials; Total derivatives; Implicit functions;
Applications in Economics
Optimization: First and second derivative tests; Exponential function: Deriva-

tives; Logarithmic function: Derivatives; Applications in Economics.
Functions of two or more variables: Second order partial derivatives and

total differentials
Finding maximum/minimum: Unconstrained optimization; Quadratic forms;

Characteristic roots; Concavity and convexity; Applications in Economics.
Constrained optimization: Classical Programming; Lagrange multiplier; Sec-

ond order condition; Homogeneous functions; Homotheticity; Euler’s theorem;
Cobb-Douglas function; CES function; Translog Function; Applications in Eco-
nomics.
4 Dynamics
Rules of integration; Indefinite integrals; Definite integrals; Improper integrals;
Applications in Economics; Domar Growth model.
First order difference equations: Dynamic stability of equilibrium; Applica-

tions in Economics: Cobweb model; Harrod model.
Second order difference equations: Applications in Economics: Samuelson

trade cycle model.
14
Dynamic Optimization: Discrete Time and Continuous Time.
5 Mathematical programming and Game theory

Linear Programming; Simplex method; Duality; Non-linear programming;
Kuhn-Tucker conditions; Applications in Economics. Game theory; The rectan-
gular game as a linear program; duality.
Class Format
Lecture/problem solving/discussion. Economic theory, critical thinking and
problem solving are stressed. Class format will include both individual and
group problem solving. After completing the course, the student is expected
to be better able to critically evaluate economic theories. They are expected to
spend a considerable amount of class time interactively formulating and solving
problems and building models. Small groups will often be utilized. They have
to view the readings and the lectures as complements rather than substitutes.
Essential Readings
1. Chiang, Alpha C. (2005) Fundamental Methods of Mathematical Economics,
4th edition, McGraw-Hill
2. Harrison, Michael and Patrick Waldron (2011) Mathematics for Economics
and Finance, Routledge.
3. Melkumian, Arsen (2010) Mathematical Economics, Routledge.
1. Acemoglu, Daron. (2008) Introduction to Modern Economic Growth, Prince-
ton, NJ: Princeton University Press,
2. Allen, R. G. D. (1959) Mathematical Economics, Second edition, Macmillan.
3. Allen, R.G.D. (1967) Macro-Economic Theory: A Mathematical Treatment,
Macmillan.
4. Chiang, Alpha C. (1999) Elements of Dynamic Optimization. Long Grove, IL:
Waveland Press.
15
5. Dixit, A. K. (1976) Optimization in Economic Theory, Oxford University
Press.
6. Haeussler, E. F. and Paul, R. S. (1998) Introductory Mathematical Analysis,

Prentice Hall.
7. Henderson, J. M. and Quandt, R. E. (1980) Microeconomic Theory A Mathe-

matical Approach, Third edition, McGraw-Hill.
8. Kamien, Morton I., and Nancy L. Schwartz. (1991) Dynamic Optimization:

The Calculus of Variations and Optimal Control in Economics and Management,
2nd ed., San Diego, CA: Elsevier
9. Renshaw, Geoff (2008)Maths for Economics, 2nd edition, OUP.
10. Silberberg, Eugene (1990) The Structure of Economics: A Mathematical Analy-

sis, McGraw-Hill.
11. Simon, Carl P. and Lawrence Blume (1994) Mathematics for Economists,
Norton.
12. Stokey, Nancy L., and Robert E. Lucas, Jr., with Edward C. Prescott.
(1989) Recursive Methods in Economic Dynamics, Cambridge, MA: Harvard
University Press
13. Sydsaeter, Knut; Peter Hammond, and Arne Strom (2012) Essential Mathe-
matics for Economic Analysis 4th Edition, Pearson education.
14. Weber, J. E. (1982) Mathematical Analysis, Harper and Row.
15. Yamane, Taro (1985) Mathematics for Economists, Second edition, Prentice
Hall.
16
C D S

Syllabus
201:Growth and Development
Course Objective
The course covers important theories on economic growth and selected issues
in economic development. The course aims to familiarise students with con-
temporary issues in economic growth and development. The topics the course
covers include old and new growth theories, importance of history or initial
conditions for economic development, economic inequality, rural-urban inter-
action, markets related to agriculture, and randomised trials in development
economics.
1 Economic growth in the long run

This presents the empirics of the long term growth performance of countries
in the world. Data on per capita GDP and population growth of a number of
countries over a very long time from Maddison (2007) are used to motivate the
students on the basic questions raised in this course.
Suggested Readings:
• Galor, O. (2010): “Economic growth in the very long run,” in Economic

growth, ed. by S. N. Durlauf, and L. E. Blume, pp. 57–67. Palgrave
Macmillan.
• Maddison, A. (2007): The World Economy (Two-in-One Edition): Volume 1 - A

Millennial Perspective, Volume 2 - Historical Statistics. Academic Foundation,
New Delhi, indian edition edn.
• Jones, C. I. (2001): Introduction to Economic Growth (Second Edition). W.W.Norton

& Company, New York.
17
2 Economic Growth, Population and Demography
Suggested Readings:
• Galor, O. (2011): “The demographic transition: Causes and conse-

quences,” Working Paper 17057, National Bureau of Economic Research.
• Galor, O., and D. N. Weil (1999): “From Malthusian Stagnation to

Modern Growth,” American Economic Review (Papers and Proceedings), 89,
150–154.
• Galor, O., and D. N. Weil (2000): “Population, Technology, and Growth:

From Malthusian Stagnation to the Demographic Transition and beyond,”
American Economic Review, 90(4), 806–828.
3 Solow model of economic growth

• Basic Solow model;
• Technology and Solow model;
• Income convergence and explaining differences in growth rates.
Suggested Reading:

4 Growth models with consumer optimisation (Ram-

sey,Cass, Coopman Model)
Suggested Reading:
• Barro, R. J., and X. Sala-I-Martin (2004): Economic Growth- Second Edition.

Prentice Hall India Private Ltd, New Delhi.
18
5 Economics of Knowledge (ideas)
• Concept of technology;
• Characteristic of knowledge as a commodity and its economic implica-

tions.
Suggested Readings:

• Romer, P. M. (1990): “Endogenous Technological Change,” Journal of

Political Economy, 98(5), s71–s102.
6 Endogenous Growth Models

• Romer Model;
• Grossman and Helpman model–trade and growth;
• Input variety and growth;
• Human capital and Growth-Lucas Model;
Suggested Readings:

• Grossman, G. M., and E. Helpman (1991): Innovation and Growth in the

Global Economy. MIT Press, Cambridge MA.
7 History, Expectation and Development

Complementarities– increasing returns – issues of coordination – balanced and
unbalanced growth strategy –role of expectations – complementarities and
technological progress – increasing returns and market entry and size of the
market.
Suggested Readings:
19
• Ray, D. (1999): Development Economics. Oxford University Press, New
Delhi. Chapter 5.
8 Economic inequality and Growth

Concept of inequality–economic inequality–inequality and income– inverted-U
shape hypothesis – inequality and saving–inequality and political redistribution
–inequality and capital market – inequality, credit market and occupational
choice–inequality and human capital formation.
Suggested Readings:

Delhi. Chapter 6 and 7.
9 Rural urban interaction

Structural approach of development– structure of rural and urban economy
–formal and informal sectors – Rural and urban interaction – Lewis model –
Rural-Urban migration –Harris and Todaro model.
10 Markets Related to Agriculture

Land market– land and rental contracts – contracts and production incentives
– land size and productivity – land reform. Labour market – Credit market
– features of rural credit market – interlinked transactions in rural markets –
alternative credit policies – market for insurance.
Suggested Readings:

Delhi. Chapters 11-15.
11 Poverty and undernutrition

Concept of Poverty – absolute and relative –temporary and chronic –measures
of poverty– functional impact of poverty –poverty traps – Poverty, credit and
20
insurance – poverty, nutrition and labour market – poverty and household
allocation of resources.
Suggested Readings:

Delhi. Chapter 8.
12 Empirical Development Economics

This module aim is to familiarise the students with the randomised trials in de-
velopment economics. The module would cover the structure and methodology
of randomised trails as well as discusses a number of papers which actually
implemented field experiments in development economics. The paper also
discusses the limitations of field experiments.
Suggested Readings:
• Duflo, E., M. Kremer, and R. Glennerster (2007): “Using Randomi-

sation in Development Economics Research: A Toolkit,” in Handbook of
Development Economics - Vol 4., pp. 3895–3962. Elsevier-North Holland.
• Rodrik, D. (2008): “The New Development Economics: We shall Experi-

ment, But How Shall We Learn?,” Working Paper 2008-0142, Weatherhead
Center for International Affairs, Harvard University.
21
C D S

Syllabus
202: Econometrics
Course Objectives
The aim of the course is to provide the students with the theoretical tools and
practical experience necessary to do applied econometric research. This course
places particular emphasis on estimation and interpretation of the standard
linear regression model, and as such the lecture sessions will include a number
of illustrations of empirical econometric studies and their possible re-estimation
using the same data sets in workshop sessions.
Course description
This course offers an introduction to the theory and application of econometric
analysis. Students will also apply the techniques learned in this course using
Stata/PcGive/E-views/R. The details are given below.
1 The Simple (Two-Variable) Linear Regression Model

• Basic Concepts of Regression Analysis.
• Assumptions of the Simple Regression Model.
• The Method of Ordinary Least Squares (OLS): Estimation and Inference.
2 Multiple Linear Regression Model

• The Classical Linear Regression Model (CLRM): Assumptions
• Ordinary Least Squares (OLS): Estimation and Inference
22
• Maximum Likelihood Estimation
• Functional forms and structural change; Growth rates
• Dummy Variable Regressors and Covariance Analysis.
3 Violations of Assumptions
Non-Normality–Multicollinearity–Heteroskedasticity–Autocorrelation–Generalised
Least Squares–Endogeneity–Generalised Method of Moments–Specification Er-
rors.
4 Further Topics in Regression Analysis

Simultaneous Equations; Identification Problem; Estimation.
5 Class Format
Lecture/problem solving/discussion. Economic theory, critical thinking and
problem solving are stressed. Class format will include both individual and
group problem solving. The students are expected to spend a considerable
amount of class time interactively formulating and solving problems and build-
ing models. After completing the course, they are expected to be better able to
critically evaluate economic theories.
Assessment
Review questions and homework problems will be handed out for each section
of the course. Knowledge of these review questions will be very helpful when
taking the exams. Students are encouraged to work out answers to these
questions and discuss them among themselves.
Essential Readings
1. Dougherty, Christopher (2011) Introduction to Econometrics. Fourth Edition,
OUP.
23
2. Stock, James H., and Mark W. Watson (2006) Introduction to Econometrics,
Second Edition, Addison-Wesley Series in Economics.
3. Wooldridge, Jeffrey M. (2003) Introductory Econometrics: A Modern Approach,

Second Edition, Thomson South Western, USA.
1. Angrist, Joshua D. and Jorn-Steffen Pischke ( 2008) Mostly Harmless Econo-
metrics: An EmpiricistŠs Companion, Princeton University Press, New Jersey,
USA.
2. Dielman, T.E. (2005) Applied Regression Analysis, Indian Edition, Thomason

Brooks/Cole.
3. Greene, William H. (2003)Econometric Analysis, 5th Edition, Pearson Educa-

tion Inc.,New Jersey.
4. Gujarati, D. N. and Sangeetha (2007) Basic Econometrics, 4th Edition, Tata

McGraw-Hill Publishing Company Ltd., New Delhi.
5. Hill, R. Carter, William E. Griffiths, and George G. Judge (1997)Undergrad-

uate Econometrics, John Wiley & Sons, New York.
6. Johnston, J. and John DiNardo, (1997) Econometric Methods, 4th Edition,

McGraw-Hill Companies, Inc., London.
7. Judge, G. et al. (1988) Introduction to the Theory and Practice of Econometrics,

2nd Edition, John Wiley & Sons, New York.
8. Kleiber C, and Zeileis A (2008) Applied Econometrics with R, Springer-Verlag,

New York.
9. Kmenta, Jan (1986) Elements of Econometrics, Macmillan Publishing Com-

pany, New York.
10. Lardaro, Leonard (1993)Applied Econometrics, HarperCollins College Pub-

lishers, New York.
11. Maddala, G. (1977) Econometrics, McGraw Hill Kogakusha, Ltd., Tokyo.
12. Mukherjee, Chandan, Howard White and Marc Wuyt (1998) Econometrics
and Data Analysis for Developing Countries, Routledge, London.
24
13. Nachane, D.M. (2006)Econometrics: Theoretical Foundations and Empirical
Perspectives, Oxford University Press, New Delhi.
14. Ramanathan, Ramu (2002) Introductory Econometrics with Applications,

5thedition, Thomson Asia Pte Ltd., Singapore.
15. Studenmund, A.H. (2006) Using Econometrics: A Practical Guide, Pearson

Addison Wesley, New York.
16. Vinod, Hrishikesh D. (2008) Hands-On Intermediate Econometrics Using R,

World Scientific Publishing Co., Singapore,
Data Sources & References

1. Dandekar, V. M. (ed.) (1972) Database of the Indian Economy, Vol. II, Statisti-
cal Publishing Society, Calcutta.
2. Government of India (1999) Guide to Official Statistics, 4th Edition, Central

Statistical Organisation, New Delhi.
3. Government of India (2010) National Accounts Statistics, Central Statistical

Organisation, New Delhi.
4. Government of India (2007) National Accounts Statistics: Sources and Meth-

ods, Central Statistical Organisation, New Delhi.
5. Krishna, K. L. (1997) Econometric Applications in India, OUP, New Delhi.
6. Minhas, B. S. (ed) (2002) National Income Accounts and Data Systems, Oxford
University Press, New Delhi.
7. Mukherjee, M. (1969) National Income of India: Trends & Structure, Statistical

Publishing Society, Calcutta.
8. Rao, C. R. (ed.) (1972) Database of the Indian Economy, Vol. I, Statistical

Publishing Society, Calcutta.
9. Roy Choudhury, Uma Dutta (1995) National Income Accounting, Macmillan,

New Delhi.
10. Sivasubramanian, S. (2000) National Income of India in the 20th Century,

OUP.
25
Relevant web sites
1. www.rbi.org.in
2. http://mospi.nic.in/mospi_nsso_rept_pubn.htm
3. http://development.thinkingwithdata.com
26
C D S

Syllabus
203: International Economics

The aim of this course is to provide students with a grounding in the princi-
ples of international economics so that they understand the world trade and
payment system. The course covers the pure theory of trade and extensions
thereof, customs union, and balance of payments adjustment policies under
alternative exchange-rate regimes. Next open-economy macroeconomics, in-
cluding the determination of the exchange rate, is discussed. The consequences
of capital mobility are explored and the possibility of international macroeco-
nomic policy coordination considered. Finally, political economy issues in trade
are introduced.
1 Introduction
Overview of International Economics.
Gains from Trade and Pattern of Trade.
2 International Trade Theory

Comparative Advantage: The Ricardian Model, Empirical Testing of the Ricar-
dian Model, Factor Endowments and the Heckscher–Ohlin Theory: Factor Price
Equalization and Income Distribution, Empirical Testing on the H–O Model,
The Gravity Model.
3 Economies of Scale, Imperfect Competition and

International Trade
Monopolistic Competition and Trade, Significance of Intraindustry Trade, and
Dumping and Economies of Dumping.
27
4 International Trade Policy
Basic Tariff Analysis, Effects of a Tariff : Consumer and Producer Surplus, The
Partial Equilibrium Analysis of Tariffs, The General Equilibrium Analysis of
Tariffs, Other Instruments of Trade Policy.
5 The Political Economy of Trade Policy

Political Arguments for Free Trade: Free Trade and Efficiency, International
Trade Agreements: A Brief History, the Uruguay Round, From the GATT to
WTO. Free Trade Areas versus Customs Union, Trade Creation and Trade
Diversion
6 Exchange Rates and Open-Economy Macroeconomics

Foreign Exchange Markets and Equilibrium in the Foreign Exchange Market,
Exchange Rate and Relative Prices, Interest Parity: The Basic Equilibrium Condi-
tion, Effects of Exchange Rates Changes on Expected Returns. Price Levels and
the Exchange Rates in the Long Run, The Law of One Price, Purchasing Power
Parity, Absolute PPP and Relative PPP, Empirical Testing on PPP, Problems with
PPP, The Fundamental Equation of the Monetary Approach.
7 Balance of Payments, Foreign Exchange Market

and Trade Elasticities
Output and the Exchange Rates in the Short Run due to Changes in Monetary
and Fiscal Policy, Macroeconomic Policies and the Current Account Dynamics:
Effects of a Devaluation on the Trade Balance, The J Curve Hypothesis, Exchange
Rate Pass-through and Inflation, The Marshall-Lerner Condition, Monetary
Approaches to BOP, Expenditure–Switching and Expenditure Reducing Policies,
Absorption Approach.
8 International Macroeconomic Policy

The International Monetary Policy System, 1870-1973,
International Macroeconomic Policy under Gold Standard, 1870-1914,
The Bretton Wood System and the IMF.
28
Fixed Exchange Rates and Foreign Exchange Intervention,
Central Bank Interventions and the Money Supply,
Money Market Equilibrium under Fixed Exchange Rate,
Stabilisation Policies with a Fixed Exchange Rate, Monetary Policy and Fiscal
Policy,
Managed Floating and Sterilized Intervention.
9 Macro Economic Policy Coordination Under Float-

ing Exchange Rates
The case of Floating Exchange Rate , Monetary Policy Autonomy , Exchange
Rate as an Automatic Stabilizer, The Case against Floating Exchange Rate,
Fiscal and Monetary Policy and the Degree of Capital Mobility under Fixed
and Flexible Exchange Rate, Macroeconomic interdependence in a two country
macroeconomic model, Potential gains from policy co-ordination, Dynamic
games and the sustainability and reputation credibility of international coopera-
tion.
10 Speculative Attacks and Currency Crisis

Proximate causes of recent financial crisis and comparison with previous crises.
First generation speculative attack models, Second generation speculative attack
models, Currency and banking crisis, Optimal reserve holdings.
Essential Readings
1. Paul R. Krugman & Maurice Obstfeld, International Economics: Theory and
Policy, Addison-Wesley, 1999.
2. Salvatore, International Economics, Prentice Hall, 1998.
3. Caves, Richard, Jeffrey Frankel and Ronald Jones, World Trade and Payments:
An Introduction, Harper Collins, 1996.
4. C. Paul Hallwood and Ronald MacDonald, International Money and Finance,

Blackwell, 2000.
29
C D S

Syllabus
204:INDIAN ECONOMIC DEVELOPMENT

This course offers an analytical introduction to the main aspects of the Indian
economic policy and performance in the post independence period. We examine
Indian economic problems in the light of relevant economic theory(ies), and
in a comparative perspective. The course is expected to enable the students to
appreciate the evolution of the economy, its institutional framework, nuances
in using statistical information for analysing public policy, and to get familiar
with the issues for research.
Course Outline
(Number of Lectures in Parenthesis)
1. Indian economic growth, distribution and structural change: Comparative

historical perspective(3).
2. Planning for economic development: Changing contours of state & market

in India (2)
3. Poverty and inequality: Trends and policies (2)
4. Land, labour, agriculture and agrarian relations (2)
5. Industry, public sector and technology (2)
6. Trade, investment and aid (external sector) (2)
7. Finance and development (3)
8. Monetary policy, and the transmission mechanism (2)
9. Public finance in Indian economy (3)
10. Health and education (2)
11. Evolution of economic reforms: (4)
30
Readings
1. Indian economic growth, distribution & structural change: Comparative
historical perspective.
• R M Sundrum (1987) Growth and Income Distribution in India, Sage,New

Delhi.
• Isher J Ahluwalia (1985) Industrial Growth in India: Stagnation since
the Mid-sixties, Oxford University Press, New Delhi.
• Vijay Joshi and I M D Little (1994) India: Macroeconomics and Political
Economy 1964-1991, Oxford University Press, New Delhi.
• T J Byres (1998) (ed.) The Indian Economy: Major Debates since Inde-
pendence, Oxford University Press, New Delhi.
• R Nagaraj(2000) “Indian Economy Since 1980: Virtuous Growth or
Polarisation?”, Economic and Political Weekly, Vol.35, No.32, pp.2831-
2839.
• S R Osmani (1996) “Is Income Equality Good for Growth?” In Abu
Abdullah and Azizur Rehman Khan (ed.) State, Market and Develop-
ment, Oxford University Press, New Delhi, pp.33-64.
2. Planning for economic development: Changing contours of state and

market in India
• P C Mahalanobis (1955) “The Approach of Operational Research to

Planning in India”, Sankhya, December, Vol.16, No.1/2, pp.3-130.
• Bhagwati and Chakravarty (1969) “Contributions to Indian Eco-
nomic Analysis”, American Economic Review, (Supplement), Septem-
ber, Vol.59, No.4, Part 2, pp.1-73.
• Bhagwati, Jagdish and Padma Desai (1971) “India: Planning for Indus-
trialisation”, OECD and Oxford University Press, Revue economique,
September, Vol.22, No.5, pp.893-895.
• Sukhamoy Chakravarty (1987) Development Planning; The Indian Ex-
perience, Clarendon Press, Oxford.
3. Poverty and inequality:, Trends and policies
• Michael Lipton and Martin Ravallion (1995) “Poverty and Policy”,

In Jere Behrman and T N Srinivasan (ed.) Handbook of Development
Economics Vol.3B, North-Holland Publications, UK, Chapter- 41.
31
• A Vaidyanathan (2000) Poverty and Development Policy, Kale Memorial
Lecture, Gokhale Institute of Economics and Politics, Pune.
4. Land, labour and agrarian relations
• J Mohana Rao (1998) “Distribution and Growth in Indian Agricul-

ture”, In Terence J Byres (ed.) The Indian Economy: Major Debates since
Independence, Oxford University Press, New Delhi, pp. 193-248.
• A Vaidyanathan (1994) “Performance of Indian Agriculture since
Independence”, In Kaushik Basu (ed.), Agrarian Questions, Oxford
University Press, USA, pp.18-74.
• Keith Griffith et al (2002) “Poverty and the Distribution of Land”,
In V K Ramachandran and Madhura Swaminathan (ed.), Agrarian
Studies:
Essays on Agrarian relations in Less-developed countries: Proceeding of the
International conference on Agrarian relations and Rural Development in
Less-developed countries, Tulika, New Delhi.
5. Industry, public sector and technology
• K L Krishna (2002) “Industrial Growth and Diversification”, In Uma

Kapila (ed.), Indian Economy since Independence, Academic Foundation,
New Delhi, Chapter-17.
• R Nagaraj (2003) “Industrial Policy and Performance since 1980:
Which Way Now?”, Economic and Political Weekly, Vol. 38, No. 35, pp.
3707-3715.
• R Nagaraj (2006) “Public Sector Performance since 1950: A Fresh
Look”, Economic and Political Weekly, Vol. 41, No. 25, pp. 2551-2557.
• Deepak Nayyar (1994) (ed.) Industrial Growth and Stagnation: The
Debate in India, Oxford University Press, New Delhi.
6. Trade, investment and aid (external sector)
• World Development Report 1987, The World Bank, Oxford University

Press, New York.
• Manmohan Agarwal (1991) “Trade and Development: A Review
of Issues”, in Dipak Banerjee (ed.), Essays in Economic Analysis and
Policy, Oxford University Press, New Delhi, pp.153-178.
32
• Manmohan Agarwal (1993) “India in the World Economy”, in Tapas
Majumdar (ed.), Nature, Man and the Indian Economy, Oxford Univer-
sity Press, New Delhi.
• R Nagaraj (2003) “Foreign Direct Investment in India in the 1990s:
Trends and Issues”, Economic and political weekly, Vol. 38, No. 17,
pp.1701-1712.
7. Finance and development
• World Development Report 1989, The World Bank, Oxford University

Press, New York.
• RBI (1995) Report of the Committee to Review the Working of the Monetary
System (Chairman: Sukhamoy Chakravarty); chapters 1-5.
• Huw Dixon (1997) “Controversy: Finance and Development”, Eco-
nomic Journal, May, Vol. 107, No. 442, pp.752-753.
• Anand Chandavarkar (1992) “Of Finance and Development: Ne-
glected and Unsettled questions”, World Development, Vol. 20, Issue
1, pp.133-142.
8. Evolution of economic reforms
• Vittorio Corbo and Stanley Fischer (1995) “Structural Adjustment, sta-

bilisation and Policy Reform: Domestic and International Finance.”,
In Jere Behrman and T N Srinivasan (ed.) Handbook of Development
Economics, Vol. 3B, North-Holland Publications, UK, Chapter-44.
• John Williamson (1997) “Washington Consensus Revisited”, in Louis
Emmerij (ed.), Economic and Social Development into the 21st Century,
Inter-American Development Bank, Washington D C, pp. 48-61.
• Amit Bhaduri and Deepak Nayyar (1996) The Intelligent Persons Guide
to Liberalisation, Penguin India, New Delhi.
• Pranab Bardhan (1990) “Symposium on the State and Economic
Development’’, Journal of Economic Perspective, Vol. 4, and No. 3, pp.
3-7.
• Pranab Bardhan (2005) “Nature of Opposition to Economic Reforms
in India”, Economic and Political Weekly, Vol. 40, No. 48, pp.4995-4998.
• J Mohan Rao and Amitava Krishna Dutt (2006) “A Decade of Re-
forms: The Indian Economy in the 1990s”, In Lance Taylor (ed.),
External Liberalisation in Asia, Post-Socialist Europe and Brazil, Oxford
University Press, New York, Chapter 5, pp. 139-179.
33
• Arvind Panagariya (2004) India in the 1980s, and the 1990s: Triumph of
Reforms, IMF working paper, WP/04/43, Washington D C.
• Montek S Ahluwalia (2002) “ Economic Reforms in India Since 1991:
Has Gradualism Worked?” Journal of Economic Perspective, Vol. 16,
No. 3, pp. 67-88.
Additional References
1. P C Mahalanobis (1955) “The Approach of Operational Research to Plan-
ning in India”, Sankhya, December, Vol.16, No.1/2, pp.3-130.
2. Bhagwati, Jagdish and Padma Desai(1971) India: Planning for Industriali-

sation, OECD and Oxford University Press, Revue economique, September,
Vol.22, No.5, pp.893-895.
3. Isher Judge Ahluwalia (1985) Industrial Growth in India: Stagnation since

the Mid-sixties, Oxford University Press, New Delhi.
4. Pranab Bardhan (1984) The Political Economy of Development in India,Oxford

University Press, New Delhi.
5. Jagdish Bhagwati (1993) India in Transition: Freeing the Economy, Oxford

University Press, USA.
6. T J Byres (1998) (ed.), The Indian Economy: Major Debates since Independence,
Oxford University Press, New Delhi.
7. P Patnaik (1995) (ed.)Macroeconomics, Oxford University Press, New Delhi.
8. Deepak Nayyar (1994) (ed.) Industrial Growth and Stagnation: The Debate in
India, Sameeksha Trust, Bombay, Oxford University Press.
9. R M Sundrum (1987) Growth and Income Distribution in India, Sage, New

Delhi.
10. Vijay Joshi and I M D Little (1994) India: Macroeconomics and Political
Economy 1964-1991, The World Bank, Washington D C.
34
C D S

Syllabus
301: Public Economics

As an important course, the structure of the course has to be exhaustive and
rigorous both in terms of theory and applied issues in public economics and
public finance. Keeping this objective in mind, entire course has been divided
into following broad topics.
1. Role of State and Macroeconomic Perspective of Public Finance
2. Theory of Taxation and Tax Policy Issues
3. Public Expenditure Theory and Applied Issues
4. Fiscal Federalism: Theory and Practice
5. Fiscal Imbalance and Management of Public Debt
6. Current Issues in Indian Public Finance
With respect to topic 6, periodic revision of the course will be necessary to

cover topics of contemporary relevance.
1 Role of State and Macroeconomic Perspective of

Public Finance
1. Role of Government: Issues related to market failure and government
intervention
2. Changing Role of State: Issues in Public Finance in a Globalising World

with special emphasis on global public goods
3. Macroeconomics of Public Finance: The Interaction between Fiscal and

Monetary Policy and Fiscal Stabilization
35
2 Theory of Taxation and Tax Policy Issues
1. Tax Incidence: The General and Partial Equilibrium Analysis
2. Shifting and Incidence of Taxes
3. Theory of Optimal Taxation
4. Environmental Externalities
5. Environmental Policy and Regulations
6. Pollution Taxes
7. Distributional Considerations in Public Finance
8. Issues Related to Tax Policy in Developing Countries
9. Indian Tax System: An Assessment
10. Practical Issues in Tax reform India
11. An Introduction to Value Added Tax
12. Value Added Tax : Design Issues and Options
13. Value Added Tax in Federal Set-up: Cross Country Experience
14. Value Added Tax and Federalism
3 Public Expenditure Theory and Applied Issues

1. Pure Theory of Public Expenditure
2. Public Sector Pricing: Pricing of Public Utilities
3. The Median Voter Theorem: Basic Idea and Applications to Public Finance
4. Taxonomy and Growth of Public Expenditure in States
5. Public Expenditure Management & Control
6. Concepts, Measurement and Magnitude of Subsidies
7. Social Infrastructure and Financing Human Development
36
4 Fiscal Federalism: Theory and Practice
1. Theory of Fiscal Federalism: The Decentralization Theorem
2. Fiscal Federalism: An Economic Approach
3. Economic Efficiency Issues in Multilevel Government
4. Assignment Issues in Multilevel Government
5. Theory of Intergovernmental Transfers
6. Issues of Indian Federalism and Intergovernmental Transfers in India
7. Issues in Fiscal Decentralization in India in the context of 73rd and 74th
Constitutional Amendments
5 Fiscal Imbalance and Management of Public Debt

1. Measurement and Macroeconomic Impact of Deficits: Alternative Paradigms
2. Fiscal deficit and Interest rate: Analytical and Empirical Issues
3. Trends in and financing pattern of deficits in India and its macroeconomic
implications
4. Public Debt Burden and Intergenerational Equity
5. Issues Related to Public Debt Sustainability
6 Current Issues in Indian Public Finance

1. Trends and Developments in Indian Fiscal Policy: Recent Experience
2. Fiscal Responsibility and Budget Management Act: An Evaluation
3. Pricing of Public Utilities and Non-Tax Revenues: Issues and Reforms
4. State Level Pension Reforms
5. Sub-National Fiscal Reforms in India: Recent Initiatives
6. Implications of the Recommendations of Finance Commission
7. Plan Financing and its Implications
8. Centrally Sponsored Schemes and the Implications for Federalism
37
Reading List
Books
1. Jean-Jacques Laffont, (1989)Fundamentals of Public Economics, MIT press,
Boston.
2. Alan J. Auerbach and Martin Feldstein, (1985 & 1987) Handbook of Public
Economics Vol. 1 & 2, Elsevier, Amsterdam, North Holland.
3. Anthony Barnes Atkinson and Joseph E. Stiglitz, (1980) Lectures in Public

Economics, McGraw Hill, New York.
4. Alan T. Peacock, (1979) The Economic Analysis of Governments, and Related

Themes, St Martin Press, New York.
5. Amaresh Bagchi, (2005) Readings in Public Finance, Oxford University Press,

USA.
6. Raghbendra Jha, (1998) Modern Public Economics, Routledge, London.
Papers
1. James M. Buchanan, (1965) “An Economic Theory of Clubs”, Economica,
New Series Vol. 32, No. 125, pp. 1-14.
2. Martin Feldstein, (2001) “The Transformation of Public Economics Re-

search: 1970-2000”, Journal of Public Economics, Vol. 86, Issue 3, pp. 319-326
(or from NBER website).
3. Agno Sandmo, (1976) “Optimal Taxation: An Introduction to Literature”,

Journal of Public Economics, Vol. 6, Issues 1–2, pp. 37-54.
4. R. H. Coase, (1974) “The Lighthouse in Economics”, Journal of Law and

Economics, Vol. 17, No. 2, pp. 357-376.
5. Paul A. Samuelson, (1955) “A Diagrammatic Exposition of the Theory of

Public Expenditures”, Review of Economics and Statistics, Vol. 37, No. 4, pp.
350-356.
6. Paul A. Samuelson, (1954) “The Pure Theory of Public Expenditure”,

Review of Economics and Statistics, Vol. 36, No. 4, pp. 387-389.
38
7. Steven T. Berry and Joel Waldfogel, (1999) “Public Radio in the United
States: Does it Correct Market Failure of Cannibalize Commercial Sta-
tions?”, Journal of Public Economics, Vol. 71, Issue 2, pp. 189-211 (or from
NBER website).
8. Charles M. Tiebout, (1956) “A Pure Theory of Local Expenditures”, Journal
of Political Economy, Vol. 64, No. 5, pp. 416-424.
Additional Readings
Role of State and Macroeconomic Perspective of Public Finance
1. Thomas A. Husted and Lawrence W. Kenny, (1997 ) “The Effect of the
Expansion of the Voting Franchise on the Size of Government”, Journal of
Political Economy, Vol. 105, No. 1, pp. 54-82.
2. Allan H. Meltzer and Scott F. Richard, (1981) “A Rational Theory of the
Size of Government”, Journal of Political Economy, Vol. 89, No. 5, pp.
914-927.
3. Dennis C. Mueller, (2003) “The size of government”, In Public Choice III,
Cambridge University Press, Cambridge, Chapter- 21, pp. 501-534.
Theory of Taxation and Tax Policy Issues

1. Agno Sandmo, (1976) “Optimal Taxation: An Introduction to Literature”,
Journal of Public Economics, Vol. 6, Issues 1–2, pp. 37-54.
2. Sijbren Cnossen, (1992) Key Questions in Considering a Value Added Tax
for central and Eastern Europe Countries, IMF Staff Papers, Vol. 39, No. 2,
pp. 211-255
3. Alan J. Auerbach and James R. Hines, (2002) “Taxation and economic
efficiency”, In Alan J. Auerbach and Martin Feldstein (eds.), Handbook
of Public Economics: vol. 3, North-Holland, Amsterdam, Chapter- 21, pp.
1347- 1415.
4. Don Fullerton and Gilbert E. Metcalf, (2002) “Tax Incidence”, In Alan J.
Auerbach and Martin Feldstein (eds.), Handbook of Public Economics: vol. 4,
North-Holland, Amsterdam, Chapter- 26, pp. 1787- 1867.
5. Arnold C. Harberger, (1962) “ The Incidence of the Corporation Income
Tax”, Journal of Political Economy, Vol. 70, No. 3, pp. 215-240.
39
6. Douglas Bernheim, (2002) “Taxation and Saving”, In Alan J. Auerbach
and Martin Feldstein (eds.) Handbook of Public Economics: vol. 3, North-
Holland, Amsterdam, Chapter- 18, pp. 1173- 1240.
7. Ramsey F.P., (1927) “A Contribution to the Theory of Taxation”, The

Economic Journal, Vol. 37, No. 145, pp. 47-61.
8. Mirrlees, J.A., (1971) “An exploration in the theory of optimum income

taxation” Review of Economic Studies, Vol. 38, No. 2, pp. 175-208.
9. Joel Slemrod, (1990) “Optimal Taxation and Optimal Tax Systems”, The
Journal of Economic Perspectives, Vol. 4, No. 1, pp. 157-178.
10. Lawrence H. Summers, (1981) “Capital Taxation and Accumulation in a

Life Cycle Growth Model”, The American Economic Review, Vol. 71, No. 4,
pp. 533-544.
11. A.B. Atkinson and J.E. Stiglitz, (1976) “ The design of tax structure: Direct
versus Indirect Taxation”, Journal of Public Economics, Vol. 6, Issues 1-2, pp.
55-75.
12. Robin Boadway, Maurice Marchand and Pierre Pestieau, (1994) “Towards
a Theory of the Direct - Indirect Tax Mix”, Journal of Public Economics, Vol.
55, Issue- 1, pp. 71-88.
Public Expenditure Theory and Applied Issues

1. Paul A. Samuelson, (1955) “The Pure Theory of Public Expenditure”,
2. Paul A. Samuelson, (1955) “Diagrammatic Exposition of a Theory of

Public Expenditure”, Review of Economics and Statistics, Vol. 37, No. 4, pp.
350-356.
3. Paul A. Samuelson, (1958) “Aspects of Public Expenditure Theories”,

4. William H. Oakland, (1987) “Theory of Public Goods”, In Alan J. Auerbach

and Martin Feldstein (eds.), Handbook of Public Economics: Vol. 2, North-
Holland, Amsterdam, Chapter- 9, pp. 485-533.
5. Jonathan Gruber, (2009) “Public Goods”, In Public Finance and Public Policy,
Worth Publishers, Chapter- 7, pp. 181-200.
40
Fiscal Federalism: Theory & Practice
1. Wallace E. Oates, (1972) Fiscal Federalism, Hardcourt Brace Jovanovich,
New York.
2. Wallace E. Oates, (1999) “An Essay on Fiscal Federalism”, Journal of Eco-

nomic Literature, Vol. 37, No. 3, pp. 1120-1149.
3. Robin Boadway, Katherine Cuff and Maurice Marchand, (2003) “Equal-

ization and the Decentralization of Revenue - Raising in a Federation”,
Journal of Public Economic Theory, Vol. 5, No. 2, pp. 201-228.
4. Robin Boadway and Frank Flatters, (1982) “Efficiency and equalization

payments in a federal system of government: a synthesis and extension of
recent results”, Canadian Journal of Economics, Vol. 15, No. 4, pp. 613-633.
5. Richard A. Musgrave, (1999) “Fiscal federalism”, In James M. Buchanan

and Richard A. Musgrave (eds.), Public Finance and Public Choice: Two
contrasting Visions of the State, MIT Press,Cambridge, PP. 155-175.
6. Charles M. Tiebout, (1956) “A pure theory of local expenditures”, Journal

of Political Economy, Vol. 64, No. 5, pp. 416-424.
Fiscal Imbalance and Management of Public Debt

1. Robert J. Barro, (1974) “Are Government Bonds Net Wealth?”, Journal of
Political Economy, Vol. 82, No. 6, pp. 1095-1170.
2. Mario I. Blejer and Adrienne Cheasty, (1993) How to Measure the Fiscal
Deficit, International Monetary Fund, Washington DC.
3. Mario I. Blejer and Adrienne Cheasty, (1991) “Measurement of Fiscal

Deficits: Analytical and Methodological Issues”, Journal of Economic Liter-
ature, Vol. 29, No. 4, pp. 1644-1678.
4. Michael J. Boskin, (1988) “Concepts and Measures of Federal Deficits

and Debt”, In Kenneth Joseph Arrow and Michael J. Boskin (eds.), The
Economics of Public Debt,International Economic Association, Macmillan
Press, New York.
5. Willem H. Buiter, (1990) Principles of Budgetary and Financial Policy, Har-

vester Wheatsheaf, New York.
41
6. Richard J. Cebula, (1988) “Federal Government Deficits and Interest rates:
An Empirical Analysis of United States, 1955-1984”, Public Finance = Fi-
nances publiques, Vol. 43, Issue 3, pp. 337-348.
7. Richard J. Cebula, (1997) “Structural Budget Deficits and the Ex Ante

Real Long Term Interest Rate: An Analysis of the Direction of Causality”,
Public Finance = Finances publiques, Vol. 52, Issue 1, pp. 36-49.
8. Richard J. Cebula, (1990) “Government Borrowing and Interest rates in

United States: An Empirical Analysis Using IS-LM Framework”, Economia
Internazionale / International Economics, Vol. 43, Issue 2-3, pp. 159-164.
9. Jose Correia-Nunes and Loukas Stemitsiotis, (1995) “Budget Deficit and

Interest Rates: Is There a Link? International Evidence”, Oxford Bulletin of
Economics and Statistics, Vol. 57, Issue 4, pp. 425-449.
10. Peter A. Diamond, (1965) “National Debt in a Neoclassical Growth Model”,

The American Economic Review, Vol. 55, No. 5, Part 1, pp. 1126-1150.
11. William Easterly, Carlos A. Rodriguez and Kiaus Schmidt-Hebbel (eds.),

(1994) Public Sector Deficits and Macroeconomic Performance, Oxford Univer-
sity Press for the World Bank, Oxford, New York.
12. Kanhaya L. Gupta, (1992) Budget Deficits and Economic Activity in Asia,
Routledge, London.
13. Kanhaya L. Gupta and Bakhtiar Moazzami, (1996) Interest Rate and Budget
Deficit: A Study of the Advanced Economies, Routledge Studies in Modern
World Economies, London.
14. Peter S. Heller, Richard D. Haas and Ahsan S.Mansur, (1986) A Review of
the Fiscal Impulse Measure, IMF Occasional Paper No 44, Washington, D.C.
15. Tanzi, V and M I Blejer, (1988) “Public debt and fiscal policy in developing
countries”, In Kenneth Joseph Arrow and Michael J. Boskin (eds.), The
Economics of Public Debt,International Economic Association, Macmillan
Press, New York.
Current Issues in Indian Public Finance

1. Amaresh Bagchi and Nicholas Stern (eds.), (1994) Tax Policy and Planning
in Developing Countries, Oxford University Press, New Delhi.
42
2. Amaresh Bagchi and Pinaki Chakraborty, (2004) “Towards a Rational
System of Centre-State Revenue Transfers”, Economic and Political Weekly,
Vol. 39, No. 26, pp. 2737-2747.
3. Amaresh Bagchi, (2005) Readings in Public Finance, Oxford University Press,

New Delhi.
4. Pinaki Chakraborty, (2005) “Debt Swap in a Low Interest Rate Regime:

Unequal Gains and Future Worries”, Economic and Political Weekly, Vol. 40,
No. 40, pp. 4357-4362.
5. Gulati, I. S., (1991) “Reducing the Fiscal Deficit: Soft and Hard Options”,
Economic and Political Weekly, Vol. 26, No. 29, pp. 1721-1722.
6. Gulati, I. S., (1994) “Calculating the Fiscal Deficit: A Note on Certain

Capital Receipts”, Economic and Political Weekly, Vol. 29, No. 21, pp.
1297-1298.
7. Iqbal Singh Gulati, (1987) Centre-State Budgetary Transfers, Sameeksha

Trust, Oxford University Press, New Delhi.
8. Vijay Joshi and Ian Malcolm David Little, (1994) India: Macroeconomics and
Political Economy 1964-1991, The World Bank, Washington D C.
9. Sudipto Mundle, (1997) Public Finance Policy Issues for India, Oxford Uni-
versity Press, New Delhi
10. National Institute of Public Finance and Policy (India) (1994) Reform of
Domestic trade Taxes in India: Issues and Option: Report of a Study Team, New
Delhi.
11. Prabhat Patnaik, (2001) “On Fiscal Deficits and Real Interest Rates”, Eco-
nomic and Political Weekly, Vol. 36, No. 14-15, pp. 1160-1163.
12. Mihir Rakshit, (1994) “Money and Public Finance Under Structural Ad-
justment: The Indian Experience”, Economic and Political Weekly, Vol. 29,
No. 16-17, pp. 923-935.
13. Mihir Rakshit, (2000) “On Correcting Fiscal Imbalances in the Indian
Economy - Some Perspectives”, Money and Finance, ICRA Bulletin, July-
September.
14. Reserve Bank of India (1985) Report of the Committee to Review the Working
of Monetary System, Mumbai.
43
15. Rao, R. Kavita, (2004) “Impact of VAT on Central and State Finances”,
Economic and Political Weekly, Vol. 39, No. 26, pp. 2773-2777.
16. Rao, M. Govinda, (2003) “Reform in Central Sales Tax in the Context of
VAT”, Economic and Political Weekly, Vol. 38, No. 7, pp. 627-636.
44
C D S

Syllabus
302: History of Economic Thought

This course surveys the main schools in the history of the development
of economic thought, beginning with that in ancient civilizations. The course
concludes with a consideration of the ‘Epic’ recession and the recent financial
crisis. Throughout the course, economic theories will be examined in the light
of the interrelationships between theory, policies and conditions, including
responses to the current financial and economic global crises. To increase the
students understanding and appreciation of the development, progression, and
regression of human understanding of how humans do and should act in “the
ordinary business of life”. Beginning with ancient civilizations we will progress
historically (as far as we are able) to the present day, taking a broad view of what
constitutes ‘economic thought’, (e.g., a mixture of institutional, philosophical,
policy oriented, and ‘purely’ theoretical) put into the general historical context
of human affairs (political, religious, social, and scientific).
Course Outline
1 Economic Thought Before Adam Smith

• An Introduction to Epistemology, Methodology and the Philosophy of
Science
• Economic Thought in Ancient Civilizations: China
• Economic Thought in Ancient Civilizations: India
• Economic Thought in Ancient Civilizations: The Hebrews and the Bible
• Economic Thought in Ancient Civilizations: Rome
• Early Christianity and Economic Thought
• The Middle Ages: Islamic Contributions
• Mercantilism and Cameralism
45
• The Natural Law-Natural Rights Tradition
• Cantillon, Turgot and the Physiocrats
• British Economics: Setting the Stage for Smith
2 Classical Theories of Value, Growth and Distribu-

tion
• Smith and Ricardo on the Theory of Value
• Later Subjectivist Theories of Value
• Classicalists on the Determinants of Economic Growth
• Classical Theories of Income Distribution
3 Classical Economics on Money, Banking, and Pol-

icy
• Classical Monetary Theory
• Classical Public Finance
• Say’s Law, Gluts, and Business Cycles
• Classical Economic Policy in Theory and Practice
4 Marxist Economics: Classical Or Not?

• Marx and the Labour Theory of Value
• Marx’s Theory of Money
• Marx on Distribution
• Marx’s Theory of Capital Accumulation and Crises
5 Marginalists, Marshall, and Neoclassical Economics

• Pre-Marginalism (French, German, and Italian contributions)
• The Marginal Revolution: Jevons, Menger, and Walras De-homogenized
46
• Alfred Marshall and Neo-Classicalism
• Capital Theory
• Wicksell, Fisher and the Development of the Quantity Theory
• Mises and Hayek: On Socialism and Business Cycles
• Schumpeter, Fisher & Kalecki on Business Cycles
6 Keynes: Theory of Money, Investment, and Cy-

cles
• Keynes Vs. Say’s Law and Classical Economics
• Keynes’ Theory of Investment
• Keynes on Money and Speculation
• Keynes on the Business Cycle
7 Neoclassical Synthesis and Monetarist Challenge

• The Hicks-Hansen-Samuelson IS-LM Transformation
• Phillips Curve Debates
• Friedman’s Fundamental Monetarist Propositions
• Critiques of Monetarism
8 Economic Thought at Historical Crossroads?

• The Rise of Mathematics and Statistics in Economics
• Public Choice and Constitutional Economics
• Competition and Knowledge: Perfect, Imperfect and Rivalrous
• Rational Expectations, Real Business Cycles & Efficient Markets
• Hyman Minsky’s Financial Instability Hypothesis.
• Understanding ‘Epic’ Recession and Financial Crisis, 2007-09
47
Assessment
Review questions and homework problems will be handed out for each section
of the course. Knowledge of these review questions will be very helpful when
taking the exams. Students are encouraged to work out answers to these
questions and discuss them among themselves.
Suggested Readings
1. Schumpeter, Joseph Alois, (1954) History of Economic Analysis, Oxford
University Press, USA.
2. Blaug, Mark, (1997) Economic Theory in Retrospect, 5th Edition, Cambridge
University Press, Cambridge, UK.
3. Rothbard, Murray N., (1995) Economic Thought Before Adam Smith: An
Austrian Perspective on the History of Economic Thought (Vol. I), Edwadr
Elgar Publishers, UK.
4. Rothbard, Murray N., (2006) An Austrian Perspective on the History of
Economic Thought (Vol. II), Ludwig von Mises Institute, Auburn, Alabama.
5. Brian Snowdon, Howard A. Vane and Peter Wynarczyk, (1994) A Modern
Guide to Macroeconomics: An Introduction to Competing Schools of Thought,
Edwadr Elgar Publishers, USA.
6. Backhouse, Roger E., (2004) The Ordinary Business of Life: A History of
Economics from the Ancient World to the Twenty-First Century, Princeton
University Press, Princeton, New Jersy.
7. Brue, Stanley L., (2000) The Evolution of Economic Thought, 6th ed., Dryden
Press, Oak Brook, Illinois, USA.
8. Canterbury, E. Ray, (2003), The Making of Economics, 4th ed., World Scientific
Publishing Co. Ltd., Singapore.
9. Coleman, William Oliver, (2002) Economics and Its Enemies: Two Centuries
of Anti-Economics, Palgrave MacMillan, New York.
10. Ekelund, Robert B., (1996) A History of Economic Theory & Readings in
Economic Thought, McGraw-Hill, UK.
11. Ekelund, Robert B. and Herbert, Robert F., (1997) A History of Economic
Theory and Method, McGraw-Hill, UK.
48
12. Rasmus, Jack, (2010) Epic Recession: Prelude to Global Depression, Pluto
Press, London.
49
C D S

Syllabus
303: Topics in Applied Econometrics
Course Objectives
This is an applied course in data analysis anchored on the theory and method of
regression. The aim of the course is to provide the students with the theoretical
tools and practical experience necessary to do applied econometric research.
This course places particular emphasis on estimation and interpretation of the
standard linear regression model, and as such the lecture sessions will include
a number of illustrations of empirical econometric studies and their possible
re-estimation using the same data sets in workshop sessions.
Structure and Content

The course will focus largely on the ideas and concepts in statistical theory
and how to use them meaningfully (and innovatively) in evidence based ar-
gumentation. A first course in basic statistics and quantitative techniques will
be presumed. The attention will be more on drawing upon the theoretical
results to use them in practice. This is a theory-informed data-oriented course.
Hands-on practice in data analysis will be provided using the statistical software
Stata/SPSS/PcGive.
Course Outline
1 Multi-variate analysis
Discriminant analysis–Factor Analysis/Principal Component Analysis–Multi-
Dimensional Scaling, Cluster Analysis.
50
2 Models with Limited Dependent Variables
(a) Binary choice models– linear probability model, probit, logit and tobit
models: (b) Multi response models – multinomial logit and ordered probit
models.
3 Systems of Equations
Seemingly unrelated regression (SUR) model.
4 Stationary Time Series

1. Autocorrelations and Partial Autocorrelation Functions;
2. AR, MA, ARIMA models - identification, estimation, testing and forecast-

ing;
3. ARCH/GARCH models;
4. ADL and VAR models
5 Unit roots and Cointegration

1. Unit roots and Units roots tests;
2. Engle-Granger and Johansen procedures
6 Models for Panel Data

1. Fixed Effects and Random Effects method;
2. Dynamic Panel Data models
Teaching Methods
Classroom lectures, and computer workshop using. PcGive, Eviews, GRETLE
and STATA for data analysis.
51
Essential Readings
1. Baltagi, B. H. (2008), Econometric Analysis of Panel Data, 4th edition, John
Wiley.
2. Enders, Walter (2009), Applied Econometric Time Series, 3rd Edition, Wiley
3. Everitt, Brian S and Dunn, Graham. (2001) Applied Multivariate Data

Analysis, Second Edition, Arnold.
4. Greene, W. (2008), Econometrics Analysis, Pearson
• Cheng, Hsian (1986) Analysis of Panel Data, Cambridge University Press.
• Cryer JD and Chan KS (2008), Time Series Analysis: With Applications in R,

2nd edition. Springer-Verlag, New York.
• Dougherty, Christopher (2011) Introduction to Econometrics, Fourth Edition.

Oxford University Press.
• Granger, C. W. J. (ed.) (2001) Essays in Econometrics: Collected Papers, Edited

by Eric Ghyseis et al., Cambridge University Press.
• Granger, C. W. J. and Newbold, P. (1977) Forecasting Economic Time Series,

Academic Press, New York.
• Hamilton J.D.(1994), Time Series Analysis, Princeton University Press
• Hendry, David F. (1995) Dynamic Econometrics, Oxford University Press.
• Maddala G. S. and Kim, In-Moo (1998) Unit Roots, Cointegration and Struc-
tural Change, Cambridge University Press.
• Makridakis, S., Wheelwright, S. C. and McGee, V. E. (1983) Forecasting -

Methods and Applications, Second edition, John Wiley & Sons.
• Manly, Bryan F. J. (2005) Multivariate Statistical Methods: A Primer, 3rd

Edition, Chapman & Hall/CRC Press.
• Mills, Terrence C. (1990) Time Series Techniques for Economists, Cambridge

University Press.
52
• Pfaff, Bernhard (2008). Analysis of Integrated and Cointegrated Time Series
with R. 2nd edition. Springer-Verlag, New York.
• Verbeek, Marno. (2008). A Guide to Modern Econometrics. Third Edition.

Wiley.
• Wooldridge J.M (2009): Introductory Econometrics: A Modern Approach, 4th

Edition, Thomson South-Western.
53
C D S

Syllabus
304: Economics of Technology and Innovation
Course Objective
The course takes the students through an engagement with the varied literature
dealing with concepts, measurement and analytical methods involved in under-
standing generation of innovation, its diffusion and the effects of this diffusion
in a typical developing country. After attending this course, the student is not
only exposed to the theoretical developments in generation and diffusion of
innovations but also its application.
Course Outline
1. Introductory topics: Nature and importance of innovation- Invention-
Innovation- Incremental innovation- innovation in the context of develop-
ing countries- radical and disruptive innovations and user led innovations.
2. Conceptualization of Innovation: Linear versus Chain-linked models.
3. Systemic perspective on Innovation: National System of Innovation-

Empirical implementation- Meaning of national systems of innovation in
the context of globalisation- Sectoral and Regional systems of Innovation:
explanation of why one sector/region is more innovative than another
one.
4. Measuring Innovation: Conventional vs new indicators - Composite

measures of innovation.
5. Understanding the process of diffusion of innovations in an economy:

Estimating the relationship between diffusion of innovation and economic
growth in a nation – the concept of total factor productivity(TFP).
54
6. Policy instruments to stimulate generation of innovation and diffusion
of innovations: Financial instruments (R&D tax incentives, Research
Grants, Loans and Venture Capital ) - Non financial instruments (Supply
of human resource in science and engineering, industrial standards and
clustering) - Measuring the effectiveness of innovation policy instrument.
7. Market structure and Innovation: Empirical measurement and evidence

across time and space.
8. Internal organization of firms and its effect on innovations: organiza-

tional culture and innovations.
9. International technology transfer: The market for disembodied technolo-

gies and issues related to technology transfer: channels of technology
transfer; Relationship between technology imports and local technology
generating efforts- Changes in international governance rules with re-
spect to promotion of innovation: R&D subsidies, public procurement,
and Potential and actual effects of TRIPS compliance of domestic patent
regimes.
10. MNCs as a source of technology spillovers to local companies: Evidence

from across countries and industries
11. Some emerging issues:
(a) Effect of technological innovations on wages and inequality in in-

comes.
(b) Below-the-radar (frugal) innovations-measuring and identifying it
and policy instruments for promoting it: the increasing role of the
organized sector in pro-poor innovations.
(c) Technological development of India: Policies; India as an emerging
high technology giant?
Essential Readings
• Greenhalgh, Christine and Mark Rogers (2010),Innovation, Intellectual Prop-
erty, and Economic Growth, Princeton: Princeton University Press.
• Swann, Peter G M. (2009), The Economics of Innovation, Cheltenham, UK

and Northampton, MA, USA: Edward Elgar.
55
• Fagerberg, Jan, David Mowery and Richard Nelson (eds.,2004), The Oxford
Handbook of Innovation, New York: Oxford University Press.
• Hall, Bronwyn and Nathan Rosenberg (eds., 2010),Handbook of the Eco-

nomics of Innovation, Volumes I and II, Amsterdam: Elsevier.
56
C D S

Syllabus
305: Population and Development
A course on Population and Human Development will inform on the following:

• Divergent views on Population and Development: Theories, debates;
• Paradigm Shift in Concept and Definition of Development;
• Population and Development Linkage: challenges, trends and
• Programmatic responses; and
• Socio-economic implications of Population growth: case studies from

developing countries.
Course Outline
• Trends and patterns of world population growth,
• Sources of population Data,
• Fertility and Nuptiality, Mobility and Mortality,
• Migration, Urbanization,
• Concepts of development, Measures of development,
• Development Theories, Divergent views on population & development,
• Human development and Millennium Development Goals,
• Population and Health, Population & Poverty,
• Population and Aging,
• Gender Issues and Development,
57
• Thoughts on development and environment,
• Use of Population Data in Development Planning.
Essential Readings
• Birdsall, N, A.C. Kelley and S.W. Sinding (eds.) (2001). Population Matters:
Demographic Change, Economic Growth and Poverty in the Developing World,
OUP.
• Birdsall, N. (1988) “Analytical approaches to population growth”, in H.

Chenery & T. N. Srinivasan (eds.), Handbook of development economics, vol.
1.
• Bloom, David, E at al. (2003), The Demographic Dividend: A new Perspec-

tive on the Economic Consequences of Population Change, Population Matters,
Rand, USA.
• Caldwell, J and P. Caldwell (1986). “Routes to low mortality in poor

countries Population and Development Review, 12.
• Cassen, R. (1994). Population and Development: Old debates and new conclu-
sions, Washington, D.C. Overseas Development Council.
• Dasgupta, P. (1995) “The population problem: Theory and evidence”,

Journal of economic Literature 33, 1879-1902.
• Demeny, Paul and McNicoll, Geoffrey (1998), The Earthscan Reader in

Population and Development, Earthscan Publications Ltd. UK.
• Dyson, Tim. (2001), “A partial theory of world development: the neglected

role of the demographic transition in the shaping of modern society”,
International Journal of Population Geography, 7, 67-90.
• Dyson, Tim, R.Cassen and Leela Visaria. (eds.) (2004), Twenty-First Century
India: Population, Economy, Human Development and Environment, Oxford
University Press.
• Harris, J.R and Michael P. Todaro (1970) Migration, Unemployment and

Development: A Two-Sector Analysis The American Economic Review,
Vol. 60, No. 1. (1970), pp. 126-142.
• Kelley, A.C. (1988) “Economic consequences of population change in the

Third World”, Journal of Economic Literature 26.
58
• World Bank,(1984) World development Report 1984: Population, World Banak,
Washington DC.
• World Bank(2000) Beyond Economic Growth Chapter III on ‘World Popu-

lation Growth’.
59
C D S

Syllabus
306: Industrial Organisation
Course Objective
The course provides a graduate level introduction to Industrial Organization.
It is designed to provide a broad introduction to topics and industries that
current researchers are studying as well as to expose students to a wide variety
of techniques. It will start the process of preparing economics PhD students to
conduct thesis research in the area, and may also be of interest to economics
and related fields. The course presumes that students have a familiarity with
micro theory, basic game theory and some econometrics.
1 Preliminaries
• The SCP paradigm
• Relationship between a measure of concentration and measure of market
power.
• Additional cost concepts: Switching costs, Transaction costs. Asset speci-
ficity and hold-up problems.
• Game theory – normal and extensive form games. Nash equilibrium.
Subgame-prefect equilibrium in extensive form games with perfect infor-
mation.
2 Pricing Strategies
• Price Discrimination: First, Second, Third Degree
• Durable Goods monopoly
• Bundling and Tying
60
3 Market structures
• The Cournot model: First order and second order conditions.
• Conjectural variations and the coefficients of cooperation.
• Cournot competition with many firms.
• Bertrand competition with homogeneous products.
• The Stackelberg equilibrium reinterpreted as subgame-perfect equilibrium
• Strategic substitutes and complements.
• Strategic Commitments: Direct and Strategic effects; Commitments;
• Taxonomy of strategies; Flexibility and option value.
4 Product differentiation
• Horizontal and vertical product differentiation
• Bertrand competition with product differentiation
• Hotelling’s model
• Vertical product differentiation model
5 Cartels and collusion

• Explicit collusion; Size of cartel; Cheating in a cartel; Successful operation
of a cartel
• How severe should punishment be? What characteristics should punish-

ments have to deter cheating?
• Tacit Co-operation: Price leadership, Focal point pricing, Pre-announcing

future price increases, Industry associations
• Cartel success and failure
61
6 Entry Barriers
• Bain: The three types of entry barriers
• Conditions of entry: the Dixit model
• The Limit Pricing Model– The Sylos Postulate
• The Limit Pricing Model–Excess capacity creation, plant proliferation,

product proliferation, reputation-building
• Predatory pricing.
7 Advertising
• Informative advertising and persuasive advertising.
• The Dorfman-Steiner model. Two possible extensions.
8 Multi-market operations
• Vertical Integration and vertical control
• Conglomerate diversification
• Related vs. Unrelated Diversification.
9 Network externalities
• Compatibility and standards
• Two-sided markets
10 Contracts and Incentives

• Unobservable efforts.
• Incentive from ownership.
• Incentives and insurance.
62
• Internal labour markets.
• Efficiency wage theory.
11 Innovation
• R&D
• Creative destruction
• The incentive to innovate: The sunk cost effect; The replacement effect;
The efficiency effect; Innovation competition
• Patent races,
– Deterministic patent races
• Process innovation
12 Competition Policy
• Two main aspects of a competition policy
• Why competition policy?
• Two main domains of antitrust law
• Per se violations and the Rule of reason
• Different Approaches to Regulation
• Some Issues in Competition Law
• International Harmonization of Competition Laws
• Competition Policy in Dynamic Markets
63
Essential Readings
• David Besanko, David Dranove, Mark Shanley and S. Schaefer–The Eco-
nomics of Strategy. John Wiley (Student edition for India, New Delhi:
Oxford University Press.
• R. Schmalensee and R. Willig (ed.) Handbook of Industrial Organization

Vols. 1 & 2, Amsterdam: North Holland.
• Baumol, W., J. Panzer and R. Willig (1982): Contestable Markets and the
Theory of Industry Structure, New York: Harcourt Brace Jovanovitch.
• Chamberlin, E. (1962): The Theory of Monopolistic Competition, Cam-

bridge: Harvard University Press.
• Osborne, M. (2004): Introduction to Game Theory, New York: Oxford

University Press.
• Tirole, J. (1988) The Theory of Industrial Organization. Cambridge, MA:

MIT Press.
• Sylos-Labini, P., (1962), Oligopoly and Technical Progress (Harvard Uni-

versity Press, Cambridge, Mass).
• Williamson, O. (1975): Markets and Hierarchies: Analysis and Antitrust

Implications, New York: The Free Press.
• Laffont, J.J. and J.Tirole (1993): A Theory of Incentives in Procurement and

Regulation, MIT Press.
• Church, J. and R. Ware,(2000), Industrial Organization: A Strategic Ap-

proach, McGraw-Hill.
• Gibbons, R., Game Theory for Applied Economists. Princeton: Princeton

University Press.
• Stephen Martin,(1993) Advanced Industrial Economics, Blackwell Publish-

ers.
• Oz Shy, (1996) Industrial Organization: Theory and Applications, The MIT

Press.
• Waldman, D.E. and E.J. Jensen (2001) Industrial Organization: Theory and
Practice, 2001, Pearson Education.
64
• Oz Shy, (1995), Industrial Organization: Theory and Applications, The
MIT Press.
• Paul Milgrom and John Roberts, (1992) Economics, Organization and

Management, Prentice–Hall International
65
C D S

Syllabus
307: Economic History of Modern India
Course Objective
Generally, this course is intended to:
1. Encourage students to view history as a social scientist’s irreplaceable
‘laboratory’; allowing for the identification of irregularities, validation (or
invalidation) of economic theories.
2. Inculcate an understanding and appreciation of the essential comple-

mentarities between deductive reasoning (as used in mathematics and
economic theory) and inductive reasoning (as used in history and other
social sciences).
Specifically, at the end of this course you will have some understanding of:
1. the factors that have influenced the pace of long run economic growth in
the Indian economy.
2. key institutional, demographic, political, social, and cultural changes that

have influenced the course of Indian economic development.
3. the major debates and controversies in the study of the economic history
of India
Compulsory Readings
• Douglass C. North,(1990) Institutions, Institutional Change, and Economic
Performance, New York: Cambridge University Press.
• Kenneth Pomeranz,(2000) The Great Divergence: China, Europe, and the

Making of the Modern World Economy, Princeton, The Princeton University
Press.
66
• Jared Diamond,(1997) Guns, Germs, and Steel, New York: Norton.
• Angus Maddison, (2007) Contuours of the World Economy, 1-2030 A.D:

Essays in Macroeconomic History Oxford: OUP.
‘Apologetics’: Why Study Economic History?

Before we begin this course, this lecture details the value of economic history
to the economist. It allows us to question and engage with “eteris paribus”
in economics. Economics understands the operation of economic variables by
isolating it, which is not the case in either historical or economic reality.
• What does history offer to the economist?
• Why is it necessary for economists to learn historical methods and how to

incorporate historical data into models?
Readings
• D. N. McCloskey,(1986) “Economics as an Historical Science,” in William
N. Parker, ed., Economic History and the Modern Economist. Oxford: Basil
Blackwell.
• Brad deLong, Why Should Students of Economics Study Economic History?,

YouTube Video at http://www.youtube.com/watch?v=eRcARH0B_2I
• Paul M. Hohenberg,(2008)“Toward a More Useful Economic History”, The

Journal of Economic History 68,2.
• Y. M. Brenner,(2000) “Economic Theory without Economic History is

Scholasticism and Economic History Without Theory is Blind”, Journal of
Income Distribution, 9,:1-3.
• Tirthankar Roy, (2004) “Economic History of India: An Endangered Disci-

pline”, Economic and Political Weekly, 39, pp.3238-43.
• Andre Gunder Frank,(2004) “Structuring a New Economic History”, Eco-

nomic and Political Weekly.
• “Conversations with History: Economic History, with Robert William Fo-

gel’, University of California Television,http://www.uctv.tv/searchdetails.
aspx?showID=9322. (Optional)
67
2 Introduction: The Historical Method in the Study
of Economic Change
Readings
• P. Rosenau, (1991) ’Post-Modernism and the Social Sciences: Insights,
Inroads and Intrusions’, Chapter 1: Into the Fray: Crisis, Continuity and
Diversity, pp 1-24.
• D. Little, “interpretation Theory” in his Varieties of Social Explanation
(1991), pp.68-87.
• “Conversations with History: Historical Perspective on the Global Eco-
nomic Crisis with Economic Historian Barry Eichengreen”, UC Berekely,
University of California Television, http://www.uctv.tv/search-details.
aspx?showID=16055 (Optional)
3 Themes and Debates in World Economic History
Readings
• David Landes, (1990) “Why are We So Rich and They So Poor?”, American
Economic Review, 80(2), pp. 1-13.
• Douglass North,(1994)“Economic Performance through Time”,American
Economic Review, 84(3), pp. 359-368.
• Andre Gunder Frank,(1969) “The Development of Underdevelopment”,
Monthly Review,18(4).
• Joel Mokyr,(2005) “The Intellectual Origins of Modern Economic Growth”,
Journal of Economic History, 65(3), pp. 285-351.
• Douglass C. North,(1990) Institutions, Institutional Change, and Economic
Performance. New York: Cambridge University Press.
• Joel Mokyr,(1990) The Lever of Riches, New York: Oxford, chapters 7 and
11.
• Kenneth Pomeranz,(2000) The Great Divergence: China, Europe, and the
Making of the Modern World Economy, Princeton: The Princeton University
Press.
68
• Jared Diamond,(1997) Guns, Germs, and Steel. New York: Norton.
• E. L. Jones,(?) The European Miracle: Environments, Economies, and Geopoli-

tics in the History of Europe and Asia, second edition,Cambridge: Cambridge
University Press, chapters 1-3.
• Angus Maddison, “Explaining the Economic Performance of Nations,

1820-1989”, In Angus Maddison,Explaining the Economic Performance of
Nations (Hants,England: Edward Elgar Press, 1995), 91-132
• Rondo Cameron and Larry Neal,(2003) A Concise Economic History of the

World: From Paleolithic Times to the Present, 4th edition, Oxford: OUP.
Before the ‘Event’ of Colonialism
Readings
• Ashin Dasgupta and M.N. Pearson (eds.)(1987), India and the Indian Ocean,
New Delhi: OUP, pp1-24.
• Sanjay Subramanyam,(2005) Explorations in Connected Histories, New Delhi:

OUP.
• Frank Perlin,(1983)“Proto-Industrialisation and Pre-Colonial South Asia”,Past

and Present, 98.
• Sanjay Subrahmanyam,(1997) “Connected Histories: Notes towards a

Reconfiguration of Early Modern Eurasia”, Modern Asian Studies, Vol. 31,
No. 3. pp. 735-762.
4 Major Themes in the Economic History of India

(1757-1947)
4.1 The Impact of Colonialism on Development: Debates
Readings
• Morris D. Morris,(1963), “Towards a Reinterpretation of Nineteenth Cen-
tury Indian Economic History” Journal of Economic History 23(4), 606-18.
69
• Irfan Habib,(1975)“Colonialisation of the Indian Economy 1757-1900”,Social
Scientist, 3(8),23-53.
• B.R. Tomlinson,(1988)“The Historical Roots of Indian Poverty: Issues in the

Economic and Social History of Modern South Asia 1880-1960”, Modern
Asian Studies,22(1), 123-40.
4.2 The eighteenth and early nineteenth Century Transition

The eighteenth century saw two big processes of change unfold in South Asia:
the break-up of the Mughal Empire into many regional states, and increasing
role of the English East India Company in the economic, commercial, and
political life of the subcontinent. The link between these big shifts in territorial
power and economic prospects tends to be interpreted in different ways. What
were the effects of the political change on institutions such as property rights?
What were its effects on commercial development? Were there potentialities
of capitalist development in Mughal India that were frustrated by the regime
shift?
Readings
• Irfan Habib, “Potentialities of Capitalistic Development in the Economy
of Mughal India” The Journal of Economic History”, 29, 1969, 32-78.
• Frank W. Ellis, (?) “In What Way, and to What Degree, Did the Mughal
State Inhibit Smithian Growth in India in the Seventeenth Century?”,
London School of Economics, Working Paper available at http://eprints.
lse.ac.uk/22477/1/wp14.pdf
• David Washbrook,(2007), “India in the Early Modern World Economy:

Modes of Production, Reproduction and Exchange”, Journal of Global
History, 2, pp. 87-111.
• C. A. Bayly, (1985) “State and Economy in India over Seven Hundred

Years”, Economic History Review, 38(4), pp.583-96.
• Binay Chaudhuri, (2008) Peasant History of Late Pre-colonial and Colonial

India, Delhi: Pearson Longman, 2008, Chapter 3 (pages 49-107).
• “On peasant property rights”, selections from: Cambridge Economic History

of India, vol. 2, chapters on agrarian relations
70
• Alan Smalley, (1983) “The Colonial State and Agrarian Structure in Ben-
gal”, Journal of Contemporary Asia, 13(2), 1983, 176-197.
4.3 The eighteenth Century Transition: the Divergence Debate

What is the ‘divergence debate’ in the Indian context? What are the main
points of difference between Parthasarathi and his critics? How can we connect
the divergence discourse with the debate on the effects of colonialism on
development?
Readings
• Pomeranz, Introduction
• R.C. Allen,(2007) ‘India in the Great Divergence’, in J.G. Williamson, T.J.

Hatton, K.H. O’R‘urke, A.M. Taylor, (eds.),The New Comparative Economic
History: Essays in Honour of Jeffrey G. Williamson, Cambridge Mass.: M.I.T.
Press, pp. 9-32.
• Prasannan Parthsarathi, (1999)“Rethinking Wages and Competitiveness in

the Eighteenth Century: Britain and South India”, Past and Present, 158,
pp. 79-109
• S. Broadberry and B. Gupta,(2006), “The Early Modern Great Divergence:

Wages, Prices and Economic Development in Europe and Asia, 1500-1800”,
Economic History Review, 59(1), pp. 2-31.
• Roman Studer,(2008)“India and the Great Divergence: Assessing the Effi-

ciency of Grain Markets in Eighteenth–and Nineteenth–Century India”,
Journal of Economic History, 68(2), pp. 393-437.
• Tirthankar Roy,(2010), “Economic Conditions in Early Modern Bengal:

A Contribution to the Divergence Debate”, Journal of Economic History,
70(1),pp. 179-194.
• David Clingingsmith and Jeffrey G. Williamson,(2008)“Deindustrialization

in 18th and 19th century India: Mughal decline, climate shocks and British
industrial ascent”, Explorations in Economic History, 45(3),pp. 209-234.
71
5 Agriculture
5.1 Commercialization
The nineteenth century saw closer integration of India with the world economy.
Peasant exports increased substantially in the course of the nineteenth century,
which the defenders of the Empire considered one of the major gains from
colonialism and globalization. Many historians, however, hold that the gains
were small and/or unequally shared. But they do not offer a single answer
why this was so. In this section we take stock of the main drivers behind
export expansion, such as property rights, railways, irrigation canals, and rural
credit, and speculate on the inequality dimension. Who gained from export of
agricultural commodities? Were there costs of this growth?
Readings
• David Ludden, (ed.)(1994) Agricultural Production in Indian History, Delhi:
Oxford University Press. (Selected essays and the introduction).
• KN Raj, N Bhattacharya, S Guha, S Padhi, (eds.)(1985) Essays on the

Commercialization of Indian Agriculture, Delhi: Oxford University Press.
• Ian Derbyshire,(1987) “Economic Change and the Railways in North India,

1860-1914”,Modern Asian Studies, 21(3), pp. 521-45.
• Imran Ali,(1987), “Malign Growth? Agricultural Colonization and the

Roots of Backwardness in the Punjab”, Past and Present, 114, pp. 110-32.
• M.B. McAlpin, (1974) “Railroads, Prices, and Peasant Rationality: India

1860-1900”, Journal of Economic History, 34(3), pp. 662-84.
• David Washbrook,(1994) “The Commercialisation of Agriculture in Colo-

nial India: Production, Subsistence and Reproduction in the ‘Dry’ South
1870-1930”, Modern Asian Studies, 28(1), pp.129-64.
• Peter Harnetty,(1971) “Cotton Exports and Indian Agriculture, 1861-1870”,

Economic History Review, 24(3), pp. 414-29.
72
5.2 Peasant Revolts: Impacts and Effects
6 The Artisan Industry

The default story of globalization in South Asia suggests that foreign trade
destroyed a flourishing artisan industry in the region – is this validated in view
of recent research? What is the significance of de-industrialization in the early-
nineteenth century for prospects of industrialization in the late-nineteenth? In
one view, the import of English cotton textiles was a devastatingly negative
economic force because it destroyed the handicrafts. Others have offered a more
moderate and mixed view of the effect of import competition in textiles. What
are the issues in this debate and is the revisionist argument convincing?
Readings
• Amiya Bagchi, (1976) “De-industrialization in India in the Nineteenth
Century: Some Theoretical Implications”, Journal of Development Studies,
12,pp.135–64.
• Douglas Haynes,(2001) “Artisan Cloth-Producers and the Emergence of

Power loom manufacture in Western India, 1920-1950”,Past and Present,
172, pp.170-98.
• Tirthankar Roy, (1999) Traditional Industry in the Economy of Colonial India,

Cambridge; Cambridge University Press, (Introduction and Chapter 4 on
handloom weaving).
7 Industry and Business in Colonial India

The default story of globalization suggests that regions short of critical resources
necessary for modern industry to develop – skilled labour and capital – would
withdraw from industry and specialize in agriculture. Contradicting this pre-
diction, colonial India experienced a robust form of factory industrialization.
Unlike models of ‘late’ industrialization, this episode relied too little too late
on state aid. It was a market driven process until the interwar period. What
were the key factors that worked for factory industry, and what obstacles were
overcome?
73
Readings
• Morris D. Morris, “Growth of Large-scale Industry to 1947”,Cambridge
Economic History of India, vol. 2.
• Rajat K. Ray, in Rajat Ray, (ed.), (1994)Entrepreneurship and Industry in India

1800-1947, Delhi: Oxford University Press, pp. 1-69.
• A.K. Bagchi,(1988) “Colonialism and the Nature of ‘Capitalist’ Enterprise

in India”, Economic and Political Weekly, 23(31), pp. PE38-PE50.
• Vinay Bahl,(1994) “The Emergence of Large-scale Steel Industry in India

under British Colonial Rule, 1880-1907”, Indian Economic and Social History
Review, 31(4), pp. 413-460.
• A-M. Misra,(2000) “Business Culture’ and Entrepreneurship in British

India, 1860-1950”, Modern Asian Studies, 34(2), pp. 333-48.
• B.R. Tomlinson, (1981) “Colonial Firms and the Decline of Colonialism in

Eastern India 1914-47”, Modern Asian Studies, 15(3), pp. 455-486.
• Morris D. Morris, (1979) “South Asian Entrepreneurship and the Rashomon

Effect, 1800- 1947”, Explorations in Economic History, 16, pp. 341-361.
8 The Creation and Emergence of ‘New’ Commodi-

ties/Markets
• Jayeeta Sharma, (2006) ‘British Science, Chinese Skill and Assam Tea:
Making Empire’s Garden”,Indian Economic and Social History Review, 43(4),
pp.429-55.
• A.R. Venkatachalapathy, ‘In those days there was no coffee’: Coffee Drinking
and Middle Class Culture in Late Colonial Tamil Nadu, IESHR, http://ier.
sagepub.com/content/39/2-3/301.full.pdf
74
9 People in Economic History
9.1 The Demographic Experience
9.2 Readings
• Massimo Livi-Bacci,(2001)A Concise History of World Population, Chapter 3,
pp63-87.
• Leela Visaria and Pravin Visaria,(1983) “Population, 1757-1947”, in Cam-

bridge Economic History of India, pp. 463-533.
• Tim Dyson, (2004) “India’s Population-The Past”, in Twenty-First Century

India: Population, Economy, Human Development and the Environment (eds.)
Tim Dyson, Robert Cassen and Leela Visaria, Oxford: OUP,pp.15-32.
• Simon Commander,(1989), “The mechanics of Demographic and Economic

Growth in Uttar Pradesh: 1800-1900”, In India’s Historical Demography:
Studies on Famine, Disease and Society,London: Curzon Press.
9.3 Migration and Indian Diasporas

Cheap and safe transportation and new economic opportunities saw merchants,
bankers, and workers migrate to distant regions. At 1920, the total number of
persons of Indian origin working in the tropical colonies, Mauritius, Guiana,
Fiji, Trinidad, Jamaica, Natal, Malaysia, Ceylon, and East Africa, numbered two
million. Most were wage-earners. A million more had been born outside their
place of work, and engaged in manufacturing, mines, and plantations inside
India. India was one of the axes in the formation of a global working class.
Historical scholarship suggests that the prospect of economic rewards, while
necessary, were never sufficient explanations for the decision to resettle, or to
migrate from the farm to the factory. There were many other factors, such as
community, coercion, networks, laws.
Readings
• M.C. Madhavan, (1985) “Indian Emigrants: Numbers, Characteristics, and
Economic Impact”, Population and Development Review, 11(3),pp. 457-81.
• Arjan De Haan,(1997) “Unsettled Settlers: Migrant Workers and Industrial

Capitalism in Calcutta”,Modern Asian Studies, 31(4), pp. 919-49.
75
• Tirthankar Roy, (2007) “Sardars, Jobbers, Kanganies: The Labour Con-
tractor and Indian Economic History”, Modern Asian Studies, 42(5), pp.
971-998.
10 Gender in Economic History
11 Readings
• Berg, Maxine. (1993) “What difference did women’s work make to the
industrial revolution”, History Workshop 35 pp. 22-44.
• Samita Sen,(1999) “Will the land not be tilled?: Women’s work in the
rural economy” and “Away from Homes: Women’s work in the Mills”, In
Women and Labour in Late Colonial India: The Bengal Jute Industry Cambridge,
CUP, pp.54-142.
• Vijaya Ramaswamy, (1985) “Aspects of Women and Work in Early South

India”,Indian Economic and Social History Review 26,1 pp.81-99.
12 ‘Space’ in Economic History

Why does ‘space’ matter in economic history? The study of space allows us to
study where and how things happen in relation to one another. It allows us to
recreate landscapes and built environments and the interaction therein.
12.1 The Environment

Readings
• Amita Baviskar,(2009) “Environmental History of India”, In Different Types
of History, ed. Bharati Ray, pp.147-63.
• Mahesh Rangarajan,(2009) “Environmental Histories of India: Of States,

Landscapes and Ecologies”, In The Environment and World History (ed.)
Edmund Burke and Kenneth Pomeranz, (Berkeley: University of California
Press, pp.229-255.
• Madhav Gadgil and Ramachandra Guha, (1992) In This Fissured Land: An

Ecological History of India’, Berkeley: University of California Press, pp.
239-47.
76
• Richard H. Grove,(1998) Green Imperialism: Colonial Expansion, Tropical
Island Edens and the Origins of Environmentalism, 1600-1860, Cambridge:
CUP, pp.474-87.
• Richard H. Grove, Vinita Damodaran and Satpal Sangwan, (1998) Na-

ture and the Orient: The Environmental History of South and South-East Asia
Oxford: OUP.
12.2 The Built Environment: Urbanisation and its Challenges

One of the most significant, and inevitable, ‘spatial’ changes occurring in history
is without doubt the process of urbanisation and the study of urbanisation and
processes is particularly relevant in the Indian context. Cities present a particular
set of social, economic and environmental challenges and problems. This section
explores the establishment and growth of cities across the subcontinent in the
long term and then considers how the colonial cities of Madras and Bombay
emerged and grew; as well as assessing issues of urban management in the old
city of Delhi in the nineteenth century.
12.3 Readings
• Howard Spodek. (1980) “Studying the History of Urbanisation in India”
,Journal of Urban History6: pp. 251-97.
• James Heitzman,(2008) “Middle Towns to Middle Cities in South Asia,

1800-2007”,Journal of Urban History :35,pp. 15-40.
• Susan Lewandowski, (1985) “Merchants and Kingship: An Interpretation

of Indian Urban History”,Journal of Urban History.
Case Studies: One of the below
• Michael Mann,(2007) “Delhi’s Belly: On the Management of Water, Sewage

and Excreta in a Changing Urban Environment during the Nineteenth
Century”, Studies in History, 23,. pp1-31.
• Ira Klein, (2008) “‘Urban Development and Death: Bombay City’ 1870-
1914”, Modern Asian Studies.
• Susan Lewandowski, (1975) “Urban Growth and Municipal Development

in the Colonial City of Madras, 1860-1900”, The Journal of Asian Studies
34,2.
77
13 Health and Well Being in Economic History
13.1 Anthropometrics
13.2 Readings
• John Komlos,(1994), “On the Significance of Anthropometric History”, In
Stature, Living Standards and Economic Development, (Chicago: University
of Chicago Press), pp.210-221.
• Richard H. Steckel,(2009) “Heights and Human Welfare: Recent Develop-

ments and New Directions”,Explorations in Economic History 46,1, pp.1-23.
• Lance Brennan, John McDonald and Ralph Shlomowitz,(1994) “Trends

in the Economic Well Being of South Indians under British Rule: The
Anthropometric Evidence”, Explorations in Economic History 31 pp.225-60.
• A. M. Guntupalli, J. Baten,(2006) “The Development and Inequality of

Heights in North, West and East India, 1915-44”, Explorations in Economic
History 43,4, pp.578-608.
13.3 Health
• Ira Klein,(1973), “Death in India: 1871-1921”, The Journal of Asian Studies.
• Sumit Guha, (2001) “An Introduction: Health and Population in South

Asia – From Earliest Times to the Present’ and ‘Health and Environmental
Sanitation in Twentieth Century India”, In: Health and Population in South
Asia from the Earliest Times to the Present (Orient and Blackswan), pp1-24,
156-85.
13.4 Hunger/Famine
• David Arnold,(1994) “The ‘ Discovery’ of Malnutrition and Diet in Colonial
India”,Indian Economic and Social History Review, 31,1, pp.1–26.
• Visaria and Visaria, CEHI, pp476-8.
• R. C. Dutt, (1901) The Economic History of India, I: Under Early British

Rule (London: Routledge, 1901),
• David Arnold, (1999) “Hunger in the Garden of Plenty: The Bengal Famine
of 1770”, Dreadfule Visitations, ed. Alessa Johns, pp. 81-113.
78
• Amartya Sen, (1999) “The Great Bengal Famine” and “Entitlements and
Deprivation” , In Poverty and Famines: An Essay on Entitlement and Depri-
vation, Oxford: OUP, pp.54-86, 154-67 as well as ‘Appendix D: Famine
Mortality: A Case Study’, 195-217.
14 Innovation and Technology in Economic History
Readings
• Arun Kumar Biswas,(2007)“Technology in History with Special Reference
to Ancient and Medieval India”, In Science, Technology, Imperialism and
War, (ed.) Jyoti Bhusan Das Gupta, New Delhi, PSHC.
• David Arnold, (2000) “Technologies of the Steam Age”, In The New Cam-
bridge History of India: Science, Technology and Medicine in Colonial India,
Cambridge:Cambridge University Press.
• Daniel Headrick,(1988), “The Railways of India”, In The Tentacles of Progress:

Technology Transfer in the Age of Imperialism, OUP.
• Robert C. Allen,(2009) “The Industrial Revolution in Miniature: The Spin-

ning Jenny in Britain, France and India”, Journal of Economic History 69,
pp. 901-27.
• Tirthankar Roy (2002), “Acceptance of Innovations in Early Twentieth

Century Indian Weaving”, Economic History Review, 55(3), pp. 507-32.
Conclusion
This part of the course could be conducted as a seminar where the students
are invited to make presentations suggesting ways of using history in order to
understand the present patterns and pathways of economic change.
79
C D S

Syllabus
402: Environmental Economics
Objective
The objective of the course is to introduce different aspects of the sub-discipline
of environmental economics to the students of MA program. It is expected
to enable students to understand the economics of the relationship between
economic activities and environmental impacts. It builds on the knowledge of
students in micro-economics and public economics. However it also touches
upon some macro-issues like the incorporation of environmental impact in
growth accounting and also concepts on sustainable development. The eco-
nomic assessment of environmental impacts, and the economics of policies
and institutions which have a bearing of environmental management are also
covered in the course.
1 Need for Environmental Economics: Linking with

Micro economics
• Externality
• Public goods
• Asymmetric Information
• Environmental problem as an Externality
• Environmental Conservation as a Public Good
• Correcting Market Failures: is Partial Correction better than nothing?
80
2 Environment and Macroeconomics
• Assessing the impact of environmental damage on macroeconomic vari-
ables
• Environment and System of National accounts
• Concepts on Green National Income
• Definition on sustainable Development
• Weak notion of sustainability
• Strong Notion of Sustainability
• Practising Sustainable Development.
3 Cost-Benefit Analysis and Environment

• Damage and Benefit Estimation: Background and Introduction
• Some objections to CB Analysis
• Benefit “Routes” – A Brief Review
• Demand shifts: Complementarity
• Cost Shifts: Averting, Replacing or Curing Expenditure
• Travel Cost and Its Relation to Environmental Quality
• Hedonic Pricing
• Direct Methods of Benefit Estimation
4 Policy Instruments
• Bases for judging among Instruments
• Static and dynamic efficiency
• Standards, Taxes, subsidies, Market Based Instruments
• Comparing Instruments: Other Considerations
• General Institutional Demands
• Other Dimensions of Judgement
• Liability Provisions
• The Provision of Information; Information disclosure
81
5 Monitoring and Enforcement
• Characteristics of Various M&E Settings
• Elements of a Monitoring and Enforcement System
• Economics of Monitoring and Enforcement
• Monitoring and Compliance as a Decision Under Uncertainty
• Citizens’ Actions
• Conclusions and Reminders
6 Economics of Natural Resources

• Optimal Extraction Non-renewable Resources
• Common Property Management
• Failure of Open access Management
• Possibilities of collective/Community Management
• Coordination problem/Infinitely Repeated Prisoner’s Dilemma, FolkŠs
Theorem
• Privatisation of the Natural Resources
Readings
• Nick Hanley, Jason F. Shogren and Ben White, Environmental Economics-
In Theory and Practice, MacMillan Press Ltd.. Hampshire
• Russell, Clifford. S., Economics of Natural Resources and Environment, Ox-
ford University Press, New York.
6.1 Supplementary Readings

• David Pearce and Dominic Moran, The Economic Value of Biodiversity, Earth
Scan Publications Ltd., London
• Ger Klaassen and Finn Forsund, Economic Instruments for Air Pollution
Control, Kluwer Academic Publishers, Dordrecht
• Bojo Jan, Maler Karl Goran and Lena Unemo, Environment and Develop-
ment: An Economic Approach, Kluwer Academic Publishers, Dordrecht
82
• Robert Dorfman and Nancy Dorfman, Economics of the Environment, Se-
lected Reading III Edtn,. W.W Norton & Company, New York
• Murty. M.N, Environment, Sustainable Development and Well-being, Oxford
University Press, New Delhi
• Fisher, A.C, Environmental and Resource Economics, Edward Elgar Publish-
ing Ltd, Aldershot
• Henk Folmer , H. Landis Gabel and Hans Opschoor, Principles of Environ-
mental and Resource Economics, Edward Elgar, Aldershot.
• Tom Tietenberg, Environmental and Natural Resource Economics, V Edtn.,
Addison- Wesley, Massachusetts
• Barbier, Edward B., The Economics of Environment and Development, Se-
lected Essays, Edward Elgar, Cheltenham
• David Pearce, Economics and Environment- Essays on Ecological Economics
and Sustainable Development, Edward Elgar, Cheltenham.
• Tom Tietenberg, Environmental and Natural Resource Economics, IV Edition,
HarperCollins Publishers, New York.
• Ian Goldin and L. Alan Winters,The Economics of Sustainable Development,
Cambridge University Press, New York.
• Kolstad Charles D. Environmental Economics, Oxford University Press.
2003.
• Sterner and Coria. Policy Instruments for Environmental and Resource Man-
agement, Francis and Taylor, 2011.
83
C D S

Syllabus
403: Gender and Development
General Objectives
The main objective of the course is to introduce the students to the use of gender
as an analytical category in the context of development. The course seeks to
equip students with an understanding of the major concepts that are used in
the gender analysis of development. It seeks to provide a historical overview of
gender and development as it emerged as a domain of knowledge with multiple
and contentious theoretical underpinnings. Taking up some of the major
development issues, the course seeks to demonstrate the methodological and
empirical problems that gender analyses raises. In the context of development
issues, it also seeks to provide an understanding of new conceptualizations and
methodologies that gender analyses gives shape to.
2 Introduction to ‘Gender’ and ‘Development’
3 Key Concepts in Gender and Development

• The Household
• Power and Empowerment
• ‘Feminisation’ and ‘Flexibility’
• Caring Labour
• Sex, Sexuality, Gender
• Caste, Class, Patriarchy, Age
84
4 Readings
• Harding S (editor) (1987) “Is there a feminist research method?”, In Fem-
inism and Methodology, pp. 1Ű14. Bloomington, IN: Indiana University
Press.
• Letherby G (2004a) “Quoting and counting: An autobiographical response

to Oakley”, Sociology 38, pp. 175–189.
• Letherby G (2004b) “Reply to Anne Oakley”, Sociology 38, 193–194.
• Oakley A (1981) “Interviewing women: a contradiction in terms”, In Doing

Feminist Research, pp. 30–61 [H Roberts, editor].London: Routledge.
• Oakley A (1996) “Gender methodology and people’s ways of knowing:

some problems with feminism and the paradigm debate in social science”,
Sociology 32, pp.707–732.
• Ramazanoglu C (2002) Feminist Methodology: Challenges and Choices, Lon-

don: Sage.
• Stanley L & Wise S (1993) Breaking Out Again: Feminist Ontology and Epis-
temology, 2nd ed. London: Routledge.
• Chandra Mohanty, “Under Western Eyes: Feminist Scholarship and Colo-

nial Discourses” In C. Mohanty, A. Russo and L. Torres (eds.) Third World
Women and the Politics of Feminism, pp 51–80.
• Blau, F., M. Ferber and A. E. Winkler (1998) The Economics of Women, Men
and Work, Prentice Hall, (3rd. edition), pp. 1–11.
• Folbre, N. (1986) “Hearts and Spades: Paradigms of Household Eco-

nomics”, World Development, Vol. 14, No. 2, pp. 245–255.
• Beneria , L. (1995) “Toward a Greater Integration of Gender into Eco-

nomics”, World Development, Vol.23, No.11, pp. 1839–1850.
• Elson, D. (1990) “Male Bias in the Development Process: An Overview”, in

Diane Elson(ed) Male Bias in the Development Process, Manchester: Manch-
ester University Press, pp. 1–15.
• Agarwal, B. (1997) “Bargaining and Gender Relations: Within and Beyond

the Household”, Feminist Economics, spring, pp. 1–25.
85
• Floro, M. S. (2002) “A Gender Approach to the Collection and Use of
Statistics on Homework”, Paper Presented at the UNIFEM-ESCAP Work-
shop on Gender Approach to the Collection and Use of Statistics, Bangkok,
September 19–21.
• Martha McDonald (1995), “The empirical Challenges of Feminist Eco-

nomics”, In Out of the Margin (eds.) Edith Kiuper and Jolande Sap, Rout-
ledge.
• Kabeer, N. (1999) “Resources, Agency Achievements: Reflections on the

Measurement of Women’s Empowerment”, Development and Change 30.3:
435–464.
• Beneria, L. and M. Roldan. (1987) The Crossroads of Class and Gender.

Chicago: University of Chicago Press.
• Williams, R. (1993) “Race, Deconstruction, and the Emergent Agenda of

Feminist Economic Theory”, in Julie Nelson and M. Ferber (ed.)Beyond
Economic Man: Feminist Theory and Economics, University of Chicago Press,
pp. 144–153.
• Jean Carabine (1996). “A Straight Playing Field or Queering the Pitch?

Centering Sexuality in Social Policy”, Feminist Review 54, pp.39–54.
• Susie Jolly (2000) “Queering Development: Exploring the Links between

Same-Sex Sexualities, Gender, and Development”, Gender and Development,
Vol. 8, No. 1, [Globalization and Diversity], pp. 78–88.
• Linzi Manicom (2001) Globalising ‘Gender’ in Or as: Governance? Ques-

tioning the Terms of Local Translations, Agenda, No. 48, Globalisation:
Challenging Dominant Discourses”, pp. 6–21
• Frans J. Schuurman (2000)“Paradigms Lost, Paradigms Regained? Devel-

opment Studies in the Twenty-First Century”, Third World Quarterly, Vol.
21, No. 1, pp.7–20.
• Jan Nederveen Pieterse (2001) Development Theory: Deconstructions/reconstructions,

New Delhi, Sage Publications
5 Gender and Development as a Field

• From Welfare to efficiency and critiques of efficiency
86
• Gender planning frameworks and tools
• Uncovering discrimination in India– ‘Towards Equality’, Shramshakti
• Gender and national planning – ‘Women’s role in the planned economy’.
Five year plans, and liberalization.
Readings
• Boserup, Ester. (1970) Women’s role in economic development, New York: St
Martin’s Press
• Irene Tinker.(1990), Persistent Inequalities: Women and world development,

New York: Oxford University Press
• Kabeer Naila, (1995) Reversed realities: Gender hierarchies in development

thought, New Delhi: Kali for women
• Wieringa, Saskia. (1998), ”Rethinking Gender Planning: A critical dis-

cussion of the use of the concept of Gender in Gender”, Technology and
Development, 2 (3).
• Committee on the Status of Women in India, (1970), Towards Equality:

Report of the Committee.
• National commission on women in Self Employment (1987) Shramshakti

report.
• Banerjee N. (1998) “Whatever happened to the Dreams of modernity? The

Nehruvian era and women’s Position”, Economic and Political weekly, 33
(17), WS 2–7.
• John, Mary E.(1996) “Gender and Development in India”, Economic and

Political weekly, 31 (47), pp 3071–77.
• C Jackson and R Pearson ed. (1998) Feminist Visions of Development, Rout-

ledge.
• Elson D and N Cagatay. (2000), “The social content of macro economic

policies”, World Development, 28 (7), 1347–1374.
• Vasavi AR and C Kingfisher. (2003) “Poor women as economic agents: the

neoliberal state and gender in India and the US”, Indian Journal of Gender
Studies, 10 (1), 1–24.
87
• Leela Kasturi, (2004),Introduction and excerpts from the report of the sub com-
mittee women’s role in planned economy, National planning committee series
1947, In M Chaudhuri (ed.) Feminism in India, Delhi: Women Unlimited.
• Kapadia Karin (ed.) (2002), The violence of development: The politics of

identity, gender and social inequalities in India, Kali for women.
• M Molyneux an S Razavi. (2006) Beijing Plus 10: An ambivalent record on

gender justice, Occasional paper 15, UNRISD.
6 Women’s work
• Methodological issues in measurement of women’s work and contribution
to income.
• Labour market issues–occupational segregation, wage disparity, house-

wifization, feminization, flexibility and casualization.
6.1 Readings
• Shahra Razavi (ed.) (2009.) “The gendered impacts of liberalization:
Towards embedded liberalism?” New York: Routledge (for UNRISD).
• I Ahmed (1994), “Technology and Feminization of work”, Economic and

Political Weekly, 29 (18), WS34–38.
• Maithreyi Krishnaraj. (1990), “Women’s work in the Indian census”,

Economic and Political Weekly, 25 (48), pp.2663–72.
• Maria Mies. (1986), Indian women in subsistence and agricultural labour, New
Delhi: Vistaar.
• Indira Hirway.(2002) “Employment and unemployment situation in the

1990s–How good is the NSS data?”, Economic and Political Weekly, 37 (21),
pp.2027–36.
• C. Kulshreshtha and Gulab Singh. (1996), “Domestic Product by gen-

der in the framework of the 1993 SNA”, Economic and Political weekly,
31(51),pp.3464-3334.
• Guy Standing. (1999) “Global Feminisation through flexible labour– A

theme revisited”, World Development, 27 (3).
88
• Jayati Ghosh. (2002) “Globalisation, export oriented employment for
women and social policy: A Case study of India”, Social Scientist, Vol 30
(11 and 12), pp. 17–60.
• T D Troung, S E Wieringa and A Chhachhi ed. (2006), Engendering Human

Security: Feminist Perspectives, London: Zed Press.
• Jain D and N Banerjee (ed). (1985), Tyranny of the Household, New Delhi:
Shakti Books.
• Lindberg Anna. (2001)Class, Caste and Gender among Cashew workers in

Kerala, Department of History, Lund University, Sweden.
• Jain, D. (1996), “Valuing Time”, Economic and Political Weekly, Oct 26.
• Indira Hirway. “Time use studies: conceptual and methodological issues

with reference to Indian the time use survey”
• Neetha N. (2006), “Invisibility continues? Social Security and Unpaid

women workers”, Economic and Political Weekly, Vol XLI (32).
7 Gender and Well Being

• Defining well being
• Conceptualisation and measurement as if gender mattered
• Paths towards well being: case studies of public action and mainstreaming
gender
• Links between women’s well being and education
• Gender and health: Demographic Transition, Nutrition, Vulnerability to

Violence and Conflict, Aspects of Sexual and Reproductive health
7.1 Readings
• Mark McGillivray (Ed) (2007), Human Well-being: Concept and Measurement,
Palgrave Macmillan: Basingstoke.
• S. Klasen (2006) “UNDP’s Gender–related Measures: Some Conceptual

Problems and Possible Solutions”, Journal of Human Development and Ca-
pabilities 7 (2), pp.243–74.
89
• Robin Jeffrey,(2003), Politics, Women and Wellbeing: How Kerala became a
‘Model’, New Delhi: OUP.
• Swapna Mukhopadhyay (2007) (ed.) The Enigma of the Kerala Woman: The
Failed Promise of Literacy, New Delhi; Social Science Press.
• M. R Garofalo and M. Marra (2007) Work–Life Reconciliation Policies From

Well–Being To Development: Rethinking EU Gender Mainstreaming, Unpub-
lished.http://mpra.ub.unimuenchen.de/9598/]
• Lombardo E, Meier P. (2006) “Gender mainstreaming in the EU: Incorporat-

ing a feminist reading?”, European Journal of Women’s Studies 13(2):151–166.
• Jane Jenson (2008) “Writing Women Out, Folding Gender” In: The Euro-
pean Union “Modernises” Social Policy Social Politics Summer 2008; 15: 131
- 153.
• Judith Squires (2005) “Is Mainstreaming Transformative? Theorizing Main-

streaming in the Context of Diversity and Deliberation”, Social Politics,
Fall 2005; 12: 366–388.
• Sylvia Walby (2005) “Gender Mainstreaming: Productive Tensions in

Theory and Practice”, Social Politics, Fall 2005; 12: 321–343.
• Diane Perrons (2005), “Gender Mainstreaming and Gender Equality in the

New (Market) Economy: An Analysis of Contradictions”, Social Politics,
Fall 2005; 12: 389–411.
• Benschop YWM, Verloo M. (2006), “Sisyphus’ sisters. Can gender main-

streaming escape the genderedness of organizations?”, Journal of Gender
Studies 15(1):19–34.
• Cecile Jackson (1998) “Women and Poverty or Gender and Well–Being?”

Journal of International Affairs, Vol. 52.
• Susanne Schech and Mochamad Mustafa (2010) “The Politics of Gender

Mainstreaming Poverty Reduction: An Indonesian Case Study”, Social
Politics, Fall 2010.
• M A Oommen (2008) Microfinance and poverty alleviation: The case of Kerala’s

Kudumbashree, CSES WP No. 17. http://csesindia.org/admin/modules/
cms/docs/publication/17.pdf
90
• Kabeer, N. (2001), “Conflicts over credit: re–evaluating the empowerment
potential of loans to women in rural Bangladesh”, World Development, vol
29, no.1.
• Albee, A.(1996). “Beyond banking for the poor: credit mechanisms and
women’s empowerment” Gender and Development, vol.4,no.3.
• Batliwala, S. (1993) The empowerment of women in South Asia: Concepts
and Practices, New Delhi: Sage.
• Caroline Sweetman, (Ed.) (2001) Gender, Development and Health Oxford:
OXFAM.
• Padmini Murhty and Clyde Lanford Smith (2010) Women’s Global Health
and Human Rights London: Jones and Bartlett.
• Arlette Campbell White, Thomas William Merrick, Abdo Yazbeck (2006)
Reproductive Health: The Missing Millenium Development Goal:Poverty,
Health and Development in a Changing World Washington: World Bank.
• G. Gordon and C. Kanstrup, (1992) “Sexuality: The Missing Link in
Women’s Health” IDS Bulletin 23,1.
• World Health Organisation, Sexual and Reproductive Health, Biennial
Report, 2005-2006-2007, Geneva: WHO, 2008
• Ed. Gina M Wingood and Ralph J. DiClemente, (2003) “Handbook of
Women’s Sexual and Reproductive Health”, New York: Kluwer.
• Tessa Pollard and Susan Brin Hyatt, (1999) Sex, Gender and Health Cam-
bridge: Cambridge University Press.
• Karen Oppenheim Mason, “gender and Demographic Change: What do
We Know?” in The Continuing Demographic Transition ed. Jones, et al
(Oxford: OUP, 1997), 158-83.
• Karen Oppenheim Mason and An-Margritt Jensen, (1995) Gender and
Family Change in Industrialised Countries Oxford: Oxford University
Press.
• Kingsley Davis, (1945). The World Demographic Transition, Annales of
the American Academy of Political and social science, Vol 237
• Lesley Doyal. (2002)“Gender Equity in Health: Debates and Dilemmas”,
in Gender Health and Healing: The Private-Public Divide. Ed. Bendelow
et al (London: Routledge)
91
• Mohan Rao, (2004)“ The Unheard Scream: Reproductive Health and
Women’s Lives in India, New Delhi: Zubaan and Panos.
• Female Genital Cutting: Clitoridectomy, Female Circumcision, Female

Genital Mutilation or Rite of PassageŠ, in Forsaken Females: The Global
Brutalisation of Women, Andrea Parrot and Nina Cummings, Oxford:
Rowan and Littlefield, 2006.
92
C D S

Syllabus
404: Labour Economics

At the end of the course the student should:
• Have an empirical understanding of the Indian labour market;

• be able to understand applications of formal theoretical models in labour
economics to the Indian labour market; and
• would be able to appreciate structural transformation of labour market
in developing economies and learn theoretical models specific to labour
markets in developing economies.
It is assumed that the student has a basic grounding in Intermediate Micro and
Macro Economics and Basic Econometrics.
The course is organized in terms of three lectures (four and half hours) per
week initially. At the end of each module three sessions (four and half hours)
would be spend on tutorials. Tutorials will focus on empirical applications of
theoretical models discussed in the lecture sessions. Students would be assigned
with home works, group exercises, classroom experiments; short field works etc
as part of the tutorials of the course. Tutorials will also be used for homework
solutions and clarification of lecture material.
Module 1: Concepts, types and measurement of Labour Force, Workforce,
participation rates, Employment, Unemployment, wages.
Module 2: Individual and aggregate labour demand.
Module 3: Individual and aggregate labour supply.
Module 4: labour market equilibrium: Wages and productivity.
Module 5: Human Capital: education and training.
Module 6: Unions and labour market.
Module 7: Features of Labour market in India.
1. Unemployment and underemployment

2. Labour Market Discrimination: caste and gender
3. Labour market duality ( segmentations)
93
4. urban and rural labour markets
5. Income distribution, income inequality and poverty
Models 8: Globalization and labour market in India
1. Mobility: migration and turnover

2. Trade, technology, industrial organization and employment
3. Labour market flexibility
Module 9: Labour market and public policy in India.
1. Public policies of employment generation.

2. Worker’s welfare programmes–social security for workers
Basic Readings
• Ronald G. Ehrenberg and Robert Smith (2005)Modern Labour Economics,
5th Edition. New York: McGraw-Hill.
• Other handouts.
94
C D S

Syllabus
405: Law and Economics

The main objectives of the course are the following: (a) to make the students
understand the importance of law and legal process on the efficiency of eco-
nomic activities/transactions; (b) to use the approach of economic analysis to
assess the efficiency of specific laws and steps in legal process; (c) to critically un-
derstand the empirical literature on the relationship between economic growth
and the status of legal institutions in developing countries. Though standard
text books on ‘law economics’ will be used for the course, case examples from
the economic analysis of Indian laws and legal institutions will also be used for
this purpose.
1 An Introduction to Law And Economics

• Economic Analysis of Law
2 An Economic Theory of Property

• The Legal Concept of Property
• Bargaining Theory
• An Economic Theory of Property
• Enforcement of Property rights Protected?
• What can be Privately Owned?
• Owners’ rights with their Property
• Nature of Resources verses type of Property Rights
• Establishment and Verification of Property Rights
• Public and Private Property
• The Public Use of Private Property: Takings and Regulation
95
• Applications
3 An Economic Theory of Contract

• Bargaining Theory: An Introduction to Contracts
• An Economic Theory of Contract
• Remedies as Incentives
– Alternative Remedies
– Models of Remedies
– Investment in Performance and Reliance
• Formation Defences and Performance Excuses
– Incompetence
– Dire Constraints and Remote Risks
• Applications
4 An Economic Theory of Tort Law

• Defining Tort Law
• An Economic Theory of Tort Liability
• Understanding different concepts of damage
• Computing Damages
• Applications
5 An Economic Theory of the Legal Process

• Why Sue?
• Exchange of Information
• Trial
• Appeals
96
• Judiciary
• Lawyers’ Profession
6 An Economic Theory of Crime and Punishment

• An Economic Theory of Crime and Punishment
• Crime in the United States
• Does Punishment Deter Crime
• Efficient Punishment
• The Death Penalty
7 An Introduction to Indian Law and Legal Institu-

tions
• The Civil Law and the Common Law Traditions
• The History of Indian Legal Tradition
• Indian Judicial System
• Economics of Some Indian Laws
– Land Acquisition
– Contract
– Patent Protection
• Delays in Indian Legal System
• Weak Enforcement in India
• Citizen’ action and Judicial Activism
Essential Readings
• Cooter, R. and T. Ulen (2004), Law and Economics, Boston: Pearson
Addison Wesley
97
C D S

Syllabus
406: Issues in Indian Agriculture

The intent of this course is to provide a deeper understanding of the Indian
agricultural economy since independence. It will start with an overview of
the performance of agriculture, followed by an analysis of the factors and
determinants including, the role of the price, technology, organization and
institutions. Some of the important topics that will be covered in the course are
as follows:
1 Performance of Agriculture since Independence:

• Agricultural growth in India since 1950-51.
• Planning for agricultural growth.
• Changes in agrarian structure in India.
• Agro-climatic conditions and agricultural pattern.
• Analysis of agricultural growth and its component elements.
• Trends in agricultural diversification.
2 Technological Change in Agriculture:

• Trends in irrigation development (water management) and its impact on
agricultural productivity and stability.
• Bio - physical technology and productivity growth.
• Impact of agro - mechanical technology.
• Technological change and distribution of gains.
98
• Post harvest technology and Remote sensing in agriculture.
• Issues in agricultural competitiveness.
3 The Role of the Price Factor:

• Price and supply response in Indian agriculture.
• Costs and returns to scale.
• Agricultural industry linkages.
• Terms of Trade.
• Agricultural subsidies, commodity prices and state intervention.
4 Organizational Issues in Agriculture:

• Inter-linked market and agricultural development.
• Land tenure.
• Rural labour market.
• Agricultural commodity and credit markets.
5 The Institutional Issues:

• Land reforms.
• Commercial banks and Co-operative credit.
• Agricultural research and extension.
• Public investment in agriculture and rural infrastructure.
• Economic reforms and agriculture.
• Trade liberalization and its impact on agriculture.
99
6 Market for Agricultural Commodities:
• Changes in domestic demand and consumption.
• Issues with respect to marketed surplus, marketing channels, price spread,

producers share in consumer’s rupee, value-chain, etc.
• Exports of agricultural commodities.
7 The Livestock Sector:

• Contribution of livestock to the national economy.
• Trends in livestock population, productivity and output and its determi-

nants, technology and resource utilization.
• Role of institution in livestock development.
8 The Fisheries Sector:

• Trends in production, consumption and export of fish and fish products.
• Technological changes in marine and island fisheries and the tragedy of

commons.
• Socio-economic conditions of fisher folk.
• Changes in institutional environment in the fisheries sector.
9 Sustainable Agricultural Growth and Development:

• Widening disparity between agriculture and non-agriculture.
• Reforming agriculture, constraints and scope.
• Impact of agricultural growth on the environment.
• Climate change and agriculture.
100
10 Rural Livelihoods and Agriculture:
• Education, other socio-economic overheads and its effect on agriculture.
• Public employment programmes, food security and other social welfare
programmes on rural population.
• Panchayati Raj and other rural institutions in agriculture and rural devel-
opment.
• Sustainable livelihoods and rural households.
Essential Readings:
1. Acharya, S.S and N.L. Agarwal, (2004) Agricultural Marketing in India, 4th
edition, Oxford University Press, New Delhi.
2. Bhalla, G.S., (2007) Indian Agriculture Since Independence, National Book
Trust, New Delhi.
3. Bhalla, G.S. and Yoginder L. Alagh, (1979) Performance of Indian Agriculture:
A District-wise Study, Sterling Publishers Pvt. Ltd., New Delhi.
4. Bhalla, G.S. and D.S. Tyagi, (1989) Patterns in Indian Agricultural Develop-
ment: A District Level Study, Institute for Studies in Industrial Develop-
ment, New-Delhi.
5. Kaushik Basu, (2005) Collected Papers in Theoretical Economics: Development,
Markets, and Institutions, Oxford University Press, New Delhi.
6. Pranab Bardhan, (1998) The Economic Theory of Agrarian Institutions, Claren-
don Press, New York.
7. Kaushik Basu, (1997) Analytical Development Economics: The Less Developed
Economy Revisited, MIT Press, Massachusetts.
8. Frank Ellis, (2000) Rural Livelihoods and Diversity in Developing Countries,
Oxford University Press, New York.
9. Frank Ellis and H.Ade Freeman (eds.), (2005) Rural Livelihoods and Poverty
Reduction Policies, Routledge, Taylor and Francis Group, London.
10. Department of Agriculture and Cooperation, (2004) State of the Indian
farmer- A Millennium Study, 27 Volumes, Academic foundation under ar-
rangement with Ministry of Agriculture, Government of India, New Delhi.
101
11. Dharm Narain, K.N. Raj, Amartya Sen and C. H. Hanumantha Rao (eds.),
(1988) Studies on Indian Agriculture, Oxford University Press, New Delhi.
12. Kakkadan Nandanath Raj, (1990) Organizational Issues in Indian Agriculture,

Oxford University Press, New Delhi.
13. Roger Rose, Carolyn Tanner and Margot A. Bellamy (eds.), (1997) Issues in
Agricultural Competitiveness: Markets and Policies, International Association
of Agricultural Economists, Occasional paper 7, Dartmouth Publishing
Company Ltd., England.
14. Ashok Rudra, (1982) Indian Agricultural Economics: Myths and Realities,
Allied Publishers Pvt., New Delhi.
15. Vaidyanathan, A., (2010) Agricultural Growth in India: The Role of Technol-
ogy, Incentives and Institutions, 2nd edition, Oxford University Press, New
Delhi.
16. Rao, C. H. Hanumantha, (2005) Agriculture, Food Security, Poverty and

Environment: Essays on Post - Reform India, Oxford University Press, New
Delhi.
17. Subba Reddy, P. Raghu Ram, T. V. Neelakanta Sastry and I.Bhavani Devi,
(2004) Agricultural Economics, Oxford & IBH Publishing Co. Pvt. Ltd.,
New Delhi.
18. Virmani, S.M., J.C. Katyal, H.Eswaran and I.P. Abrol (eds.), (1994) Stressed
Ecosystem and Sustainable Agriculture, Oxford & IBH Publishing Co., New
Delhi.
Apart from these essential readings, the current issues appeared in the
journals of national as well as international importance- Indian Journal of
Agricultural Economics, Economic and Political Weekly, Indian Journal of
Labour Economics, American Journal of Agricultural Economics, Journal of
development studies, Journal of Agrarian Change, etc.- are also suggested.
102
C D S

Syllabus
407: Issues in Indian Industry

The course will familiarise the participants with the importance of indus-
trialization for growth and employment creation. It will introduce them to all
the major issues with respect to India’s industrial sector while at the same time
acquaint them with the major databases underlying these issues. The student
will thus be equipped with the researchable issues, methods of analysing data
and drawing policy conclusions.
List of topics:
1. Preliminary concepts: Firm, Industry, Manufacturing, Services, Extractive
and Construction-the concept of value added
2. Evolution of the industrial sector-place assigned to industries in India’s

five year plans
3. The policy support to industrialization over the years with a special

emphasis on the New Industrial Policy Statement of 1991- Land as a
constraint for industrialization- Conflicts
4. The growth performance of the industrial sector since independence- what

we have learnt from the stagnation debate- performance of the industrial
sector since liberalization
(a) Understanding the database of the industrial sector: The Index of

Industrial Production-Industrial Sector in the National Accounts
Statistics- Annual Survey Industries- the Prowess Database of CMIE
5. Growth of private industrial entrepreneurship - indicators - state support -

role of finance - venture capital - incubators and other support mechanisms
6. The role assigned to public sector enterprises and the recent policy on
privatization - evaluation of privatization efforts
103
7. The Small and Medium Scale Sector (SME) - definitional changes-Performance
of the SME sector
8. Foreign Companies in the industrial sector - their share in total gross

domestic investments-Performance of foreign companies-contribution of
foreign companies to exports, technology and employment.
9. Outward FDI from India-its magnitude-geographical and industry-wide

distribution-financing of outward FDI-Contribution of Outward FDI
10. Financing of industries-Internal vs External funds- Growth of the capital

market.
11. Relationship between the growth of industrialization and employment

especially since economic liberalization.
12. Energy intensity in Indian industries - trends over time - are the industries
becoming energy efficient mover time?.
13. Green issues w.r.t industrialization- pollution control and monitoring

instruments – effect of international governance rules.
Readings:
• Bala, Subrahmanya, M. H. (2004), ‘Small Industry and Globalisation Im-
plications, Performance and Prospects’, Economic and Political Weekly, vol.
39, NO: 18
• Goldar, B N (2010), Energy Intensity of Indian Manufacturing Firms: Effect

of Energy Prices, Technology and Firm Characteristics, Delhi: Institute of
Economic Growth, http://www.mse.ac.in/Frontier/m13%20Goldar%20A.
pdf
• Lall, Sanjaya (1982): Developing Countries as Exporters of Technology, Macmil-

lan, London.
• Lall, Sanjaya (1983): “The Rise of Multinationals from the Third World”,
Third World Quarterly , Vol. 5, No. 3, July.
• Mani, Sunil and M. Vijayabaskar (1998), “A Curmudgeon’s Guide to

Economic Reforms in India’s Manufacturing Sector”, Economic and Political
Weekly, Vol. 33, No. 51.
104
• Morris, Sebastian (1987): “Trends in Foreign Direct Investment from
India (1950-1982)”, Economic and Political Weekly, Vol. 22, No. 46 and 47,
November 14 and 21.
• Nagaraj, R (2003): “Industrial Policy and Performance: Which Way Now?”

, Economic and Political Weekly, August 30-September 5, Vol. 38, No. 35.
• Nagaraj, R. (2006),“Public sector performance since 1950”, Economic and

Political Weekly, Vol. 41, No: 25.
• Nagaraj R (2006) “Indian Investments Abroad: What Explains the Boom?”,

Economic and Political Weekly, Vol. 41, No. 46, November 18.
• National Council of Applied Economic Research (2010), FDI in India and

its growth linkages, Delhi: National Council of Applied Economic Research.
• Nayyar, Deepak (1994) Industrial Growth and Stagnation: The Debate in India,
editor, Bombay; Oxford University Press.
• Nayyar, Deepak (2008): “Internationalisation of Firms from India: Invest-

ments, Mergers and Acquisitions”, Oxford Economic Studies, Vol. 30, No. 1,
March.
• Pushpangadan K. and N Shanta (2009), The Dynamics of Competition: Un-

derstanding India’s manufacturing sector, New Delhi: Oxford University
Press.
• Ramamurti, Ravi (2009): “What have we leant about the emerging market
MNEs?” , In: Ravi Ramamurti and Jitendra V Singh edited, Emerging
Multinationals in Emerging Economies, New York: Cambridge University
Press.
105
C D S

Syllabus
408: Political Economy, Development and

Governance
It is well known that an effective government responding to the needs of the
people is required not only for managing the economy well but also for the
social and human development of the society. Public economics identifies the
situations where non-market institutions and governance are required and how
do ‘efficient’ governments mobilize and allocate resources. How do such well
functioning institutions and governments come to exist? This is not addressed
usually in public economics. This is the main focus of the proposed course.
A political economy approach is used here, and the course is also used to
introduce political economy to the students of MA Applied Economics.
Political economy is broadly about the relationship between political and
economic interests. This is a two-way relationship. Political power facilitates
influence over the sharing of public resources and also on public policies that
may have a bearing on private wealth. Economic status of individuals may
determine their specific positions in politics. Political economy influences devel-
opment in different ways. First of all, it creates the environment within which
economic activities take place including governance. Structures of governance
and economic environment impact the prospects for economic growth, and
this can affect development. Beyond economic growth, the development also
depends on how the resources (especially the public resources) are allocated
within a society. Are there enough schools and healthcare centres provided by
the government? Is there an adequate social security for those people who are
unable to gain an income from labour market? The answers to such questions
would determine the nature of social and human development in a society.
Political economy plays an important role in taking decisions on these matters.
There are different ways of analysing political economy. First is the Classical
political economy associated with people like Adam Smith. However Karl
Marx had greater influence in reshaping classical political economy, and hence
Marxism in its different forms has an impact on understanding of political
economy today. Of late, neoclassical economics and new institutional economics
106
have strengthened what is called ‘new political economy’ and this is being used
widely to understand the economic and political transition of different countries
toady.
This course proposes to cover the following issues

1. The need for non-market institutions - drawing lessons from public eco-
nomics
2. Efficient and inefficient institutions
3. How do efficient institutions come to exist?
4. Institutions and Political Economy
5. What is political economy and the need to study it
6. Different traditions in political economy
(a) Classical Political Economy
(b) Marxist Political Economy
(c) New Political Economy
7. Political economy and Economic Growth
(a) Inequality and Economic Growth
8. Political economy and social/human development
9. Political economy and Governance
(a) Political Economy and Corruption
10. Political Transition in the development world
(a) Elite Capture

(b) Political Clientelism
i. Competitive Populism
(c) Transition to Liberal democracy
11. Special Topics

(a) Political economy and Economic/institutional reforms
(b) Political economy and local governance
107
Indicative references for teaching
• Acemoglu, D., Johnson, S. and Robinson, J.A. (2000) “The colonial Origins
of Comparative Development: An Empirical Investigation”, American
Economic Review, 91(5), pp. 1369-1401
• Auty, R. A. (200), “Patterns of Rent Extraction and Development in De-

veloping Countries: Implications for Governance, Economic Policy and
Performance”, in Mavrotas, G. and A. Shorrocks, Palgrave Macmillan–
UNU Wider, New York.
• Bardhan (1989) The Economic Theory of Agrarian Institutions, Oxford: Ox-

ford University Press.
• Alesina, A. and Rodrik, D., (1994) “ Distributive Politics and Economic

Growth”, Quarterly Journal of Economics, 109, 2, 465-90.
• Bardhan, P., Mitra, S. Mukherjee, D. and Sarkar, A. , (2009) “Local Democ-

racy and Clientelism: Implications for Political Stability in West Bengal” ,
Economic and Political Weekly, 28 February
• Bardhan, P. and Mukherjee, D., (1999) Relative Capture of Local and Central
Governments, CIDER working paper no. C99-109.
• Chatterjee, P.,(2004) Politics of the Governed, New Delhi: Permanent Black.
• Diamon, L and M.F Plattner (1995) Economic Reform and Democracy, Balti-
more: John Hopkins University Press.
• Dixit, A., (2009) “ Governance Institutions and Economic Activity”, Amer-

ican Economic Review 99, 1, 5-24
• Dreze, J and A. K. Sen (eds.), (1997) Indian Development: Selected Regional

Perspectives, New Delhi: Oxford University Press.
• Gindle, M. S.,(1980) Politics and Policy Implementation in the Third World ,

Princeton NJ: Princeton University Press.
• Migdal, J. S., A. Kohli, and V. Shue, (1994) State Power and Social Forces:
Domination and Transformation in the Third World, Cambridge: Cambridge
University Press.
• North, D. (1990), Institutions, Institutional Change and Economic Performance,

Cambridge: Cambridge University. Press
108
• Olson, M., (1993), “Dictatorship, Democracy, and Development”, American
Political Science Review 87: 567-576
• Prabhu, S. (2001) Economic Reform and Social sector Development: A study of

Two Indian States , New Delhi: Sage.
• Roland, G. (2000) Politics, Market and Firms, The MIT Press: Cambridge,
Mass.
• Santhakumar, V. (2008) Analysing Social Opposition to Reforms, Sage, New

Delhi
• Santhakumar, V. (2011) Economic Analysis of Institutions, Sage, New Delhi
• Shleifer, A. and Vishny, R., (1998) The Grabbing Hand; Cambridge, MA:
Harvard University Press, (1998)
• Stein, B. and Subramanian, S., (1996) , Institutions and Economic Change in

South Asia, Oxford: Oxford University Press.
109
C D S

Syllabus
409: Economics of Project Evaluation
Course Objectives
The aim of the course is to provide the students with the theoretical tools and
practical experience necessary for the appraisal of investment projects. This
course places particular emphasis on understanding the concepts h and the
advantages and drawbacks of each of the main approaches used. The course
will also familiarise the students with case studies which demonstrate the use
of these techniques in practice.
Course description
Planning & Analysis Overview
Phases of capital budgeting – Levels of decision making. Resource Allocation
Framework: Key criteria for allocation of resource– elementary investment
strategies– portfolio planning tools– strategic position and action evaluation–
aspects relating to conglomerate diversification– interface between strategic
planning and capital budgeting.
Generation and screening of project ideas

Generation of ideas – monitoring the environment – regulatory framework for
projects – corporate appraisal – preliminary screening – project rating index –
sources of positive NPV – qualities of a successful entrepreneur – the porter
model for estimation of profit potential of industries. Market and demand
analysis: Situational analysis and specification of objectives – collection of
secondary information – conduct of market survey – characterization of the
market – demand forecasting – market planning.
110
Technical analysis
Study of material inputs and utilities – manufacturing process and technology –
product mixes – plant capacity – location and site – machinery and equipment –
structures and civil works – project charts and layouts – work schedule
Financial Analysis
Estimation of cost of project and means of financing – estimates of sales and
production – cost of production – working capital requirement and its financing
– estimates of working results – breakeven points – projected cash flow statement
– projected balance sheet.
Project cash flows

Basic principles of measurement of cash flows – components of the cash flow
streams – viewing a project from different points of view – definition of cash
flows by financial institutions and planning commission – biases in cash flow es-
timation. Appraisal criteria: Net Present Value – benefit cost ratio – internal rate
of returns urgency – payback period – accounting rate of returns – investment
appraisal in practice.
Analysis of Risk
Types and measure of risk – simple estimation of risk – sensitivity analysis –
scenario analysis – Monte-Carlo simulation – decision tree analysis – selection
of project – risk analysis in practice.
Special decision situations

Choice between mutually exclusive projects of unequal life – optimal timing
decision – determination of economic life – inter-relationships between invest-
ment and financing aspects – inflation and capital budgeting. Analysis of firm
and market risk: Portfolio theory and capital budgeting – capital asset pricing
model – estimation of key factors – CAPM and Capital budgeting.
Social Cost Benefit Analysis(SCBA)

Rationale for SCBA – UNIDO approach to SCBA – Little and Mirrlees approach
to SCBA.
111
Multiple projects and constraints
Constraints – methods of ranking – mathematical programming approach –
linear programming model – Qualitative Analysis: Qualitative factors in capital
budgeting – strategic aspects – strategic planning and financial analysis – in-
formational asymmetry and capital budgeting – organizational considerations.
Environmental appraisal of projects: types and dimensions of a project – mean-
ing and scope of environment – Environment – Environmental resources values
– environmental impact assessment and environmental impact statement.
Project financing in India

Means of finance – norms and policies of financial institutions – SEBI guidelines
– Sample financing plans – structure of financial institutions in India – schemes
of assistance – term loans procedures – project appraisal by financial institutions.
Project Management
Forms of project organization – project planning – project control – human
aspects of project management – prerequisites for successful project implemen-
tation. Network techniques for project management – development of project
network – time estimation – determination of critical path – scheduling when
resources are limit – PERT and CPM models – Network cost system (Only
problems on resources allocation and resources levelling) Project review and
administrative aspects: Initial review – performance evaluation – abandonment
analysis – administrative aspects of capital budgeting – evaluating the capital
budgeting system of an organization.
Suggested Readings
• Chandra, Prasanna. 2006 PROJECTS: Planning, Analysis, Financing, Im-
plementation, and Review, 6th ed. Tata McGraw Hill.
• Cleland, David I., 1995 Project Management: Strategic, Design and Imple-
mentation, McGraw Hill, New Delhi.
• Dasgupta, Partha, Amartya Sen and Stephen Marglin, 1972. Guidelines
for Project Evaluation, Oxford & IBH, New Delhi.
• Esty, Benjamin 2003 Modern Project Finance: A Casebook. John Wiley
& Sons. Finnerty, John D. 2007 Project Financing: asset based financial
engineering, 2nd ed John Wiley & sons.
112
• Ghattas, R.G. and Sandra L.McKee, 2003 Practical Project Management,
Pearson Education, Delhi.
• Kasor, Shrutika 2003 Project Management, Sumit Enterprises, New Delhi,
• Mikkelsen, Britha 2005 Methods for Development Work and Research,

Sage Publications, New Delhi.
• Moshin, M., 1977 Project Planning and Control, Vikas Publishing House,
New Delhi.
• Pitale, R.L. 1987 : Project Appraisal Techniques, New Delhi, Oxford and
IBH.
• Planning Commission Manual Project Appraisal: industries, Govt of India
• UNIDO, Guidelines for practical project appraisal
113

Centre For Development Studies

Uploaded by

Copyright:

Available Formats

Centre For Development Studies

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Centre For Development Studies

Uploaded by

Copyright:

Available Formats

C D S

Centre for Development Studies

M.A. Applied Economics

Centre for Development Studies

7 General Equilibrium Theory

9 Externalities and Market Failure

2. Krugman, Paul. and Wells, Robin. (2005) Microeconomics, Worth Publish-

3. Varian, H. R. (1992),Microeconomic Analysis Third Edition, W. W.Norton &

4. Dixit. Avinash., Skeath, Susan. And Reiley, David H. (2010) Games of

5. Mukherjee, A. (2002), An Introduction to General Equilibrium Analysis, Ox-

6. Osborne, Martin J. (2009) An Introduction to Game Theory, Oxford University

Centre for Development Studies

1 National income accounting

2 Determination of output in a market economy

6 The Rational Expectations Revolution

7 The New Classical Macroeconomics

8 Dynamic Inconsistency and the Case for Rules

10 Budget Deficits and the Public Debt

12 The global financial crisis

3. J. M. Keynes (1936): The General Theory of Employment, Interest and Money,

4. M. Friedman (1968): “The role of monetary policy”, American Economic

5. N. Kaldor (1976): “Inflation and recession in the world economy”, Eco-

6. S. Sheffrin (1987): Rational Expectations, Cambridge University Press, Cam-

7. Phelps, E. (1990): Microeconomic Foundations of Employment and Inflation

8. Phelps, E. (1990): Seven Schools of Macroeconomic Thought, Oxford: Claren-

Centre for Development Studies

• To provide an understanding of the basic concepts and methods of Statis-

• To get statistical skill required for the analysis of socio-economic data.

• To provide hands-on training in data analysis (along with computer

• Emphasis is on application (including analysis and interpretation) rather

• Introduction to probability, rules of probability, random variables and

• Tests of Significance: tests of mean and proportion, tests of difference in

• Bivariate distributions: Contingency tables, joint and conditional distribu-

• Introductory sampling methods and large scale sample surveys in India.

2. Marsh, Catherine (2009) Exploring Data: An Introduction to Data Analysis

3. Lewis, Margaret (2011) Applied Statistics for Economists, Routledge.

5. Ott, Lyman R and Longnecker, Michael (2008) An Introduction to Statistical

6. Rohwer, Götz (2012) Models in Statistical Social Research, Routledge.

Centre for Development Studies

104 : MATHEMATICS FOR ECONOMICS

Course Description and Outline

Optimization: First and second derivative tests; Exponential function: Deriva-

Functions of two or more variables: Second order partial derivatives and

Finding maximum/minimum: Unconstrained optimization; Quadratic forms;

Constrained optimization: Classical Programming; Lagrange multiplier; Sec-

First order difference equations: Dynamic stability of equilibrium; Applica-

Second order difference equations: Applications in Economics: Samuelson

5 Mathematical programming and Game theory

6. Haeussler, E. F. and Paul, R. S. (1998) Introductory Mathematical Analysis,

7. Henderson, J. M. and Quandt, R. E. (1980) Microeconomic Theory A Mathe-

8. Kamien, Morton I., and Nancy L. Schwartz. (1991) Dynamic Optimization:

9. Renshaw, Geoff (2008)Maths for Economics, 2nd edition, OUP.

10. Silberberg, Eugene (1990) The Structure of Economics: A Mathematical Analy-

14. Weber, J. E. (1982) Mathematical Analysis, Harper and Row.

Centre for Development Studies

201:Growth and Development

1 Economic growth in the long run

• Galor, O. (2010): “Economic growth in the very long run,” in Economic