Ethiopian Higher Education Institutions

Department of Economics

Nationally Harmonized Modular Curriculum

February, 2013
Addis Ababa
Contents Page
Introduction .......................................................................................................................................... 4
RATIONALE FOR THE PROGRAM ..................................................................................................... 4
RATIONALE FOR CARRICULUM CHANGE ...................................................................................... 5
Vision & Mission of the department ................................................................................................... 5
PROGRAM PROFILE........................................................................................................................... 6
Program Objectives ............................................................................................................................. 6
Professional Profiles ............................................................................................................................ 7
Graduate Profile................................................................................................................................ 8
Competency ...................................................................................................................................... 10
Admission Requirement ........................................................................................................................ 10
Duration of Study .................................................................................................................................. 11
Graduation Requirement ........................................................................................................................ 11
Degree Nomenclature ............................................................................................................................ 11
Grading system ..................................................................................................................................... 11
Staff Profile:.......................................................................................................................................... 12
Module/Course Coding .................................................................................................................... 13
Required facilities: ................................................................................................................................ 13
Module codes & names and clustered courses with detailed load & EtCTS, by year of their delivery .....
14
Economics program, Module course breakdown by year and semester for three years ........................
16
Harmonized Detailed Course Syllabus/Content ...................................................................................... 19
Module Name: Mathematical methods in Economics ......................................................................... 20
Module Name: Micro Economics ....................................................................................................... 26
Module Name: Macroeconomics ....................................................................................................... 32
Module Name: Statistical Tools in Economics ................................................................................... 39
Module Name: Mathematical application in Economics ..................................................................... 46
Module Name: Econometrics and Research Methods ......................................................................... 73
Module Name: Development Economics ........................................................................................... 82
Module Name: International Economics ............................................................................................ 91
Module Name: Natural Resource and Environmental Economics ....................................................... 97
Module Name: Labor and Industrial Economics ............................................................................... 101
Module Name: Economics of Agriculture & Rural Development ..................................................... 109
Module Name: Monetary Economics and public finance .................................................................. 116
Module Name: Economics of Planning and Project Analysis............................................................ 124
Module Name: History of Economic Thought.............................................................................. 129
Introduction
Say about time of establishment and other points about your institution (by each
university)

RATIONALE FOR THE PROGRAM

There are fundamental facts that each society faces, i.e., resources are scarce and human
wants are unlimited. This imbalance necessitates efficient allocation and utilization of the
scarce resources in a way that maximize the benefit of the society. This requires understanding
of three issues, i.e., how individuals make decision? How people interact? And how the whole
economy works? Economics deals with the three issues rose. Alternatively, Economics is the
science concerned with how society best allocates and utilizes its scarce resources to
maximize its benefit. It is plain fact that given the scarce resources to satisfy all societal want,
nations need to know how to efficiently allocate and utilize their scarce resources and
Economists can help in this regard.

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

problems and poverty- have economic roots. In order to diagnose and remedy these ailments,
we must first understand their complex nature. Economics helps us in this regard and it enable
us prescribe remedies. In general, it is of no doubt that the study of Economics can illuminate
much about the world and that the lessons learned if properly applied can make the world a
better place to live.

Owing to these facts, the program in Economics will be of great significance in

producing citizens that try to better understand how the economy works and more importantly
how to affect the economy through economic policies in a way that the society desires.
RATIONALE FOR CARRICULUM CHANGE
Education is one of the ingredients for change and quality education is vital for economic
prosperity of a country. More importantly, education has to be relevant and responsive to
societal or development need of the country. Curriculum is the means/instrument by which you
produce quality personnel and respond to societal/development needs. Currently, the
government is striving to keep the country on accelerated growth track envisioning that
Ethiopia joins the middle income countries in a decade plus. This vision demands concerted
efforts in all sectors and above all it requires an active and productive human capital that can
realize the vision. The required active and productive human capital can be produced and
molded through quality education, among other factors. Though, the existing curriculum has
contributed its share in building the human capital of the nation thus far, it has certain
limitations that necessitates the change in curriculum so as the nation successfully produce
productive human capital to realize its vision.

There have been several changes in Economics science that are worth of introducing at an
undergraduate level, hence updating the existing curriculum found necessary in order to
produce an economics professional that understands economic theories and their applications,
undertake economics research in various sectors, stand the level of rigor required at
higher level of economics training, among others.

With dynamic world, the discipline of Economics has been changing and with this changing
world, there should be a need for change in curriculum that can produce qualified experts that
could cope up with country’s demand. There have also a lot of changes in the discipline at
undergraduate level that is worth of changing the old curriculum to update with these changes,
including modularizing the old curriculum. This will foster the development strategy of
Ethiopia to reach the middle income countries. Therefore, the dynamic nature of the
discipline and the ever demand of the country to produce qualified experts that could foster the
development of the nation demands for the change of the curriculum. In addition, the
view/response got from different stakeholders on the old curriculum matches with the current
condition of the discipline.

Vision & Mission of the department

 Vision
Vision of the department is to be one of the top departments in the nation and be exemplary
through the provision of quality education in economics subject areas, research& consultancy
service by 2020.


Mission

The mission of the department is enhancing the intellectual and economic validity of our
country through our academic program, research and community outreach activities.

PROGRAM PROFILE
Program Objectives
General Objectives of the program:

 The aim of the program is to produce high level professionals in Economics that
will benefit the country’s sustainable economic development.

 The program offers students a comprehensive basis for professional and academic
careers and further education in any economics specializations, through courses and
thesis work.

 Students will be equipped with a solid knowledge of economic theory as applied to

development issues, natural resources, and other socio-economic issues concerning the
developing countries in particular and the globe in general.

 Generally, The department has the objective of producing high level qualified experts
in different professions, launching different research findings to the advantage of the
local/country, and providing consultancy service to the community that will benefit the
country’s development endeavour, which will foster the Growth and Transformation
Plan (GTP) of Ethiopia to reach the middle income countries in the near future.

Specific objectives of the program:

With these general objectives, the prime and specific focuses of the program
is:
 To produce Economists (Economic thinkers) with basic skills that would help to
teach and do research in areas of economics.
  To better acquaint the students with solid understanding of microeconomic
theories, macroeconomic theories, and other economic issues for intelligent applications
of economics in a way that improve the quality, relevance and output of undergraduates
in economics in Ethiopia.
 To equip the students with the necessary methodologies in economics that enable
them explain the economic phenomenon, undertake economic analysis and design
economic policy.
 To highlight the different applications of economic theories in various sectors and
expose the students to the different sub-discipline of economics [laboreconomics,
agricultural economics, industrial economics, environmental economics, financial
economics, etc]
 Produce graduates with a skill of planning, Project preparation, monitoring
and evaluation.

 To enable the students undertake theoretical and applied researches relevant to the
overall development strategy and vision of the country and address national problems
of socio- economic roots; and disseminate research findings through outreach program.
 To promote interdisciplinary collaboration among the various programs in
training, research and extension.

 To offer short term training courses and provides consultancy service for
different organizations and community.

 To show students how economic science evolved, its present and future vision of the
field and make them up-to-date with the dynamism of the field.

Professional Profiles
This refers to general description of the desirable qualities of the professional in the world of
work. Professionals profile is the determination of the conceptual knowledge, skills and the
tools a professional is expected to possess. It is the major roles and tasks of the professional
and the competencies that it requires for optimal functioning. It is the graduate profile that is
advanced through experience in the real world. It is known that economics professionals
have the necessary understanding of theoretical, analytical tool, and practical implementation
of economic
issues that can be applied in various institutions (government, non-government, private, and
community related activities). Similarly, they do have knowledge and skills of resource
allocation, are of critical thinking on various socio-economic phenomenon. They do also have
firm mathematical and analytical skills, good knowledge and skill of computer use and
software applications.

Therefore, it is expected from an economist

to

 Present and transfer economic knowledge to the target groups

 Develop and build economic Models
 Use empirical evidence to evaluate an economic argument
 Develop, design, appraise and monitor projects.
 Develop and promote attitudes that advance the nation’s well-being in particular and
the globe in general.
 Be ethical, openly and objectively comments on economic policies, strategies and issues.
 Contribute to the economic policy formulation capability and broadly to the
economic advancement of the country;

 Conduct scientific Researches and assist in the dissemination of the findings of

such research in Ethiopia;
 Able to provide independent consultancy and advisory services for various agents.
 Initiate forum for the discussion of economic issues, and

 Create professional linkage with domestic and foreign economists.

 Far sighted about Scio-economic and socio-political issues.

Graduate Profile
A graduate profile is derived from the professional profile and describes the
competencies that a graduate (beginning professional) is expected to have as a result of
their educational programs. It determines the program goals and the skills and
knowledge needed for a beginning professional. As a result, after completion of their
study, the graduates will be able to achieve the discussed below knowledge, skills and
attitude.

Graduate Profile

Areas of Graduate Profile

competence
Knowledge Generally

- Microeconomics theories and their applications

- Macroeconomic theories and their applications
- Mathematical techniques, theories and their application in economics
- Economic applications in different sectors (financial, education, infrastracture,
environment, money market, public policy, agriculture, etc.)
- Statistical and econometric tools and applications
- Economic applications in Developmental issues
- Economic applications in labor market and industrial sectors
- The evolution and development of economic ideas and thoughts
- International trade and finance
- Planning, project analysis and evaluation

Specifically

- Theories of consumer behavior, producer behavior and the market

- Theories of firm’s price and output determination
- Functioning of different market setting, their structure and organization
- Macroeconomic theories dealing with national income accounting,
unemployment, inflation and economic growth of nations, etc.
- Theories of renewable and non-renewable resources, public goods, externalities
and market failure and environmental valuation.
- Theories of international trade & finance.
- Theories of wage determination, issues of labor demand and supply analysis
- Different economic policy instruments (such as monetary policy, fiscal policy,
income policy, trade policy, and etc) used at an aggregate level.
- Theories, strategies, approaches and country experiences of agricultural and
rural development.
- Theories of economic development and the problems of developing countries
and the different paths/way-outs from the problems or challenges.
- Project designing, appraisal, economic planning, analysis, monitoring and
evaluation.
- Sectoral issues that cover social services as education, health,
transport, communication and electric power and infrastructural developments as
a whole.
Skills/tools - The link
Basic between the
computer various
skills and economic
software and non-economic
applications aspects. research and
in economic
analysis
 - Research proposal developing skills and writing research reports and professional
articles
- Interviewing (conducting of survey) skill
- Critical socio-economic phenomenon observation and data analysis skills
- Both quantitative and qualitative socio-economic research skills.
- How to use empirical evidence to evaluate an economic argument
- How to conduct appropriate statistical analysis of data, and explain the statistical
problems evolved.
- Instruct in universities and higher training institutions.
Attitude - Have a rational attitude about private and/or public matters
- Easy to work with others (economists and other professionals)
- Ready to support state and communities
Emerging & - Governance
Cross Cutting - Community Development
Issues - Gender , HIV/AIDS and Disabilities
- Environment
- Experimental economics, etc
Communication  Ability to lead Focus Group Discussions
 Formal and Informal communication Skills
 An excellent rational oratorical skills
 Reporting skills
 Reasoning skills.
Management  A good management skill of private and public resources
 Time Management
 A good ability to Manage and suggest ideas and views (the various
arguments that arises because of the various socio-economic complications,)

Competency
What is new in the revised and harmonized nationally curriculum is modularizing courses
based on their core competencies. The above objectives are to be achieved as competencies
from a module- a cluster of courses based on their outcomes similarities or competency.
Competency is the capacity to realize 'up to standard' the key occupational tasks that
characterize a profession. Therefore, as these competencies are to be achieved from each
module, the competencies that characterize a profession are discussed with respect to each
module below.

Admission Requirement
The department is a program of study that normally takes three years to complete for full time
regular students and four to fiveyears for Part time students. The department will admit if the
student:
 1. Have been successfully completed preparatory level schools and pass
Entrance examination for the University prepared by Ministry of Education.
2. Have able to pass the standards set by the department.

Duration of Study
The program will have Three-year duration, with one semester consisting of 16
weeks.

Graduation
Requirement
o No ‘F’, ‘NG’, or ‘I’ grade in any course taken.
o The minimum number of credit points (EtCTS- Ethiopian Credit Transfer System)
hours set by the department and all required courses are taken.
o Minimum cumulative Grade Average Point (CGPA) of 2.00 in all courses

Degree Nomenclature
Up on successful completion of the
program,

“Bachelor of Arts degree in Economics” will be awarded

In Amharic ¾™ርት ድግሪ በኮኖሚክስ

Grading system
The grading system is based on the European credit transfer system (ECTS) that is
contextualized to Ethiopia. One EtCTS is equivalent to 27 study hours taking the assumption
that a student has 50 working hours per week (10 hours per day is multiplied by 5 working
days). EtCTS is based on the principle that 60 credits points measure the workload of a
full-time student during one academic year and average semester load of 30 EtCTS (Hence,
in a three year Bachelor Degree program a students must take 180 EtCTS). The grading
system will be
criteria-based fixed scale system as shown
below:

Raw mark Interval of number Corresponding grades

grade fixed number
Interval (100%)
Corres
pond
ing
letter
grad
e
 +
[95,100] 4 4.0 A

[90,95) 3.5X<4.0 3.7 A

[85,90) 3.0X<3.5 3.3. A

-

[83,85) 2.7X<3.0 3.0 +

B
[78,83) 2.3.0X<2.7 2.7 B

[73,78) 2.0X<2.3 2.3 C

+

[65,73) 1.7X<2.0 2.0 C

[55,65) 1.3X<1.7 1.7 D

[50,55) 1.0X<1.3 1.3 E

[30,50) 1.0 1.0 FX

[0,30) 1.0 1.0 F

NB: as indicated in the new nationally harmonized academic policy of Ethiopian Hihger
st
institutions, Fx is a grade that is o settled with the 1 two weeks through minor helps for
the student and make-up exam; whereas F grade indicate to repeat the course.

Staff Profile:
(To be done by each university)
Module/Course Coding
The module coding:

 The word “Econ” indicate the family name of the department “Economics”
 The first number represent the Year that students take the module
 The middle two digit number indicate the order/sequence number of the module
 The last number represents the type of the module. It is 1 for core modules, 3
for general/common/supportive modules, and 2 for elective modules.

The Course coding:

 The word “Econ” indicate the name of the department “Economics”
 The first number represent the Year that students take the course
 The middle two digit number indicate the order/sequence number of the module
 The last number represents the sequence of the course within the module.

Required facilities:
Being the department and the university is new, the department is full of shortages in different
material. Accordingly, the department needs to have ample resources mentioning as chairs,
computer lab, tables, shelves, cabinets, books both texts and references, econometrics
and statistics soft wares, computers (both laptop and desktop).
Medium of Instruction
Medium of instruction of delivering the courses of the program, same as other universities in
the country is English.
Mode of Delivery
The nationally agreed delivery method is semester based and one module for a maximum of
two consecutive semesters. However, this depends on the existing situation of the universities,
universities may use different ways.

Assessment and Evaluation Methods

Students will be assessed continuously. That means there will be about 2 formal quizzes, home
take assignments and one summative exam. The quizzes and assignments will be counted out
of
50% and the remaining 50% will be for the summative exam.
 Module codes & names and clustered courses with detailed load & EtCTS, by year of their delivery
Load Remark
Student
Module Course Cr. With instructor Hours Cps in
# Module Name/ Title Clustered Courses Total
Code Code Hrs Lab/ ECTS
ELH prac/
Tu Assig/
Home
Load
field
tor pres

Calculus for Economists Econ 1011 3 48 16 10 61 135 5

1 Mathematical Methods in Econ-
Economics M1011 Linear Algebra for Economists Econ 1012 3 48 16 10 61 135 5
Microeconomics I Econ 1021 3 48 8 10 69 135 5
2 Microeconomics Econ-
M1021 Microeconomics II Econ 1022 4 64 8 10 80 162 6

Econ Macroeconomics I Econ 1031 4 64 15 83 162 6

3 Macroeconomics M1031 Macroeconomics II Econ 1032 3 48 10 77 135 5

Introduction to statistics Econ 1041 3 48 8 10 42 108 4

4
Statistical tools in Econ-
Economics M1041
Statistics for Economists Econ 1042 3 48 16 15 56 135 5
Mathematical Econ-
5 Applications in M2051 Mathematical Economics Econ 2071 3 48 16 15 56 135 5
Economics
Econometrics I Econ 2061 3 48 16 16 10 72 162 6
Econometrics and
6 research methods
Econ Econometrics II Econ 2062 3 48 16 16 10 72 162 6
M2061
Research method for Economists Econ 2063 3 48 20 40 108 4
Development Economics I Econ 2071 3 48 15 72 135 5
7 Development Economics Econ
2071 Development Economics II Econ 2072 3 48 15 72 135 5
International Economics I Econ 2081 3 48 15 72 135 5
8 International Economics Econ-
M2081 International Economics II Econ 2082 3 48 15 72 135 5

9 Natural . Resource & Econ Natural Resource &

3 48 8* 15 64 135
Environmental Economics M2092 Environmental Economics
Econ 2091 5
 Labour Economics Econ 3101 3 48 10 50 108 4
10 Economics of Labour
and Industry
Econ
M3101
Economics of Industry Econ 3102 3 48 8* 10 42 108 4
Economics of Economics of Agriculture Econ 3111 3 48 10 50 108 4
11 Agriculture & Rural Econ
Development M3111 Agriculture and rural
development
Econ 3112 3 48 10 50 108 4
Monetary Economics: theory &
Econ 3121 3 48 15 72 135 5
12 Monetary Economics &
Public Finance
Econ
M3121
Policy
Public Finance Econ 3122 3 48 15 72 135 5
Planning & Project Analysis I Econ 3131 3 48 15 50 108 4
13 Economics Planning &
Project Analysis
Econ
M3131
Planning & Project Analysis II Econ 3132 3 48 20 67 135 5

History of Economic Thought I Econ 3141 3 48 15 72 135 5

14 History of Economic Econ
Thought M3141 3 48 15 72 135
History of Economic Thought II Econ 3142 5

Econ Thesis in Economics I** Econ 3151 3 48 3 57 108 4

15 Thesis in Economics M3151 Thesis in Economics II Econ 3152 3 64 5 82 135 5
EnLa- Communicative English EnLa 1161 3 48 15 72 135 5
16 Basic English Skills M1163 Basic writing skills EnLa 1162 3 48 15 72 135 5
Phil-
17 Introduction to Logic M1173
Introduction to Logic Phil 1171 3 48 15 72 135 5
18
Civics and Ethical CESt- Civics and Ethical Education CESt 1182 3 48 15 72 135 5
Education M1183
19 Basic computer skills CoSc- Introduction to computer CoSc 3 32 48 10 45 135 5
M 2193 applications 2191
Acct-M Principle of Accounting I Acct 2201 3 48 15 72 135 5
20 Principle of Accounting 2203 Principle of Accounting II Acct 2202 3 48 15 72 135 5

21
Entrepreneurship and MGMT- Entrepreneurship and MGMT 3 48 20 40 108 4
Enterprise Development M3213 Enterprise Development 3212
* indicates field trip loads

**indicates that the grade of this course is to be graded after the completion of Thesis in Economics II (i.e, after Semester II)
 Economics program, Module course breakdown by year and semester for three years
Year I, semester I
# Module Name Module code Course title Course Cr.hr CPs in Prerequisite Remark
code ECTS

1 Basic English Skills EnLa-M1163 Communicative English EnLa 1161 3 5

2 Mathematical methods in Economics Econ-M1011 Calculus for Economists Econ 1011 3 5
3 Microeconomics Econ-M1021 Microeconomics I Econ 1021 3 5
4 Macroeconomics Econ-M1031 Macroeconomics I Econ 1031 4 6
5 Statistical tools for economists Econ-M1041 Introduction to statistics Econ 1041 3 4
6 Introduction to Logic Phil-M 1173 Introduction to Logic Phil 1171 3 5
Total 19 30

Year I, semester II
# Module Name Module code Course title Course Cr.hr CPs in Prerequisit Remark
code ECTS e

1 Basic English Skills EnLa-M1163 Basic writing skill EnLa 1162 3 5

2 Civics and Ethical Education CESt-M183 Civics & Ethics CESt 1182 3 5
3 Mathematical methods in Economics Econ 1011 Linear Algebra for Econ 1012 3 5
Economists
4 Microeconomics Econ 1021 Microeconomics II Econ 1022 4 6 Econ1021
5 Macroeconomics Econ 1031 Macroeconomics II Econ 1032 3 5 Econ1031
6 Statistical tools for economists Econ 1041 Statistics for Economists Econ 1042 3 5 Econ1041
Total 19 31
 Year II, semester I
# Module Name Module code Course title Course code Cr.hr Lab CPs in Prerequisite Remark
ECTS

1 Principle of Accounting Acct-M2203 Principle of Accounting I Acct-2201 3 5

2 Basic Computer Skills CoSc-M Introduction to Computer CoSc-M 3 5
2193 2191
3 Mathematical Applications in Econ 2051 Mathematical Economics Econ 2051 3 5 Econ1011
Economics ,
Econ1012
4 Econometrics & Research Econ 2061 Econometrics I Econ 2061 3 1 6
methods

5 Development Economics Econ 2071 Development Economics I Econ 2071 3 5

6 International Economics Econ 2081 International Economics I Econ 2081 3 5 Econ1022
Total 18 31

Year II, semester II

# Module Name Module code Course title Course code Cr.hr Lab CPs in ECTS Prerequisite Remark

1 Principle of Accounting Acct-M2203 Principle of Accounting II Acct2202 3 5

2 Econometrics & Research Econ-M2061 Econometrics II Econ 2062 3 1 6 Econ2061
methods
Research method for economists Econ 2063 3 4
3 Development Economics Econ-M2071 Development Economics II Econ 2072 3 5 Econ2071
4 International Economics Econ-M2081 International Economics II Econ 2081 3 5 Econ1031

5 Natural Resource & Econ-M2091 Natural Resource & Econ 2091 3 5 Econ1022
Environmental Economics Environmental Economics
Total 18 30
 Year III, semester I
# Module Name Module code Course title Course code Cr.hr CPs in ECTS Prerequisite Remark

1 Entrepreneurship and Enterprise MGMT- Entrepreneurship and Enterprise MGMT 3 4

Development M3213 Development 3211
2 Economics of Labour& Industry Econ-M3101 Labour Economics Econ 3101 3 4 Econ1022
3 Economics of agriculture & Rural Econ-M3111 Agricultural Economics Econ 3111 3 4 Econ1021
development
4 Monetary Economics & Public finance Econ-M 3121 Monetary Economics Econ 3121 3 5 Econ1032
5 Development Planning & Project Econ-M 3131 Development Planning & Project Econ 3131 3 4 Econ2072
Analysis Analysis I
6 History of Economic Thought Econ-M 3141 History of Economic Thought I Econ 3141 3 5
7 Thesis in Economics Econ-M 3151 Thesis in Economics I Econ 3151 3 4 Econ2063
Total 21 30

Year III, semester II

# Module Name Module code Course title Course code Cr.hr CPs in ECTS Prerequisite Remark

1 Economics of Labour& Industry Econ 3101 Economics of Industry Econ 3102 3 4 Econ1022
2 Economics of agriculture & Rural Econ 3111 Rural Development Econ 3112 3 4 Econ3111
development
3 Monetary Economics & Public finance Econ 3121 Public finance Econ 3122 3 5
4 Development Planning & Project Econ 3131 Development Planning & Project Econ 3132 3 5 Econ3131
Analysis Analysis II
5 History of Economic Thought Econ 3141 History of Economic Thought II Econ 3142 3 5 Econ3141
6 Thesis in Economics Econ 3151 Thesis in Economics II Econ 3152 3 5 Econ3151
Total 18 28
Harmonized Detailed Course Syllabus/Content
Module Name: Mathematical methods in Economics
Module Category: Core

Module Code: Econ-M1011

Module Competency: Gives the student necessary derivative & integral calculus skill for
further economic analysis. The module also aims at equipping students with the
application
of linear and matrix algebra to linear economic models

Description Courses included in the module Remark

Calculus for Economists Linear Algebra for Economists

Couse code Econ1011 Econ 1012

Cr Hrs 3 3

EtCTS 5 5

Pre-requisite

Mode of Delivery Semester Based

Module Description
This course comprises six chapters having different mathematical concepts that could be applied to
economic analysis. It starts with the introduction to functions; and then the concept of limits, derivatives,
integrals and difference and differential equations with their applications. An introduction to the
application of linear algebra in theoretical economic analysis will be dealt in the subsequent chapters. It
provides students with a basic understanding of linear algebra and its application in solving economic
problems. Specifically, it deals with concepts like matrix algebra, systems of linear equations and linear
programming.

Module Objective

 to introduce some of the basic concepts of calculus

 to indicate how these concepts can be used in constructing mathematical models

in economics.
  to introduce students to the basic concepts of linear algebra that help them acquire
the mathematical knowledge related to linear economic models.

Course Name: Calculus for Economists

Course Code: Econ1011

Schedules of Lecture topics, Lecture hours, Reading materials

Chapter Lecture Topic Lecture Reading Material

Hours
1.1 Theoretical Vs Mathematical Economics
1.2 Functions
1.2.2 Types of Functions A.Chiang: chapter
1.2.3 Multivariable Functions 1(p3-5, 145-147)
1. Introducti 1.2.4 Inverse and Implicit Functions 4 Larson: chapter
on 1.2.5 Exponential and Logarithmic Functions P&chapter 1(p1-
1.2.6 Monotonic and Homogeneous Functions 83)
1.2.7 Application of Functions in Economics Knut : chapter
5(p117-122, 129-
132)
Kapoor, sec. 3.2-
3.15
Laurance (etal),
P.1-57;
Barnett, P.1-98
Laurence et al, P.57-88;
2 Limit 2.1 The Concept of Limit 4 Barnett et al, P.485-519;
and 2.2 The Limit Theorems Chiang, P.145-154
Continuit 2.3 Continuous Functions and criteria for continuity
Kapoor, sec. 4.2-4.14
y 2.4 Economic Applications of limit and continuity

The Concept of First-Order Derivatives

3 TThe Geometric Interpretation of Derivatives: slope of
Derivative a curve Larson: chapter
s Continuity and Differentiability of a Function 2(p95-141)
Rules of Differentiation Knut: chapter
Derivatives of Logarithmic and Exponential Functions 14 5(p117- 156)
Higher Order Derivatives Chiang: chapter
The sign of the Derivative (p187-204)
Maximization and Minimization
Kapoor, sec. 5.1-
Economic Application of
Derivatives 5.30
The Marginal Concepts in Economics Dowling, E., P 43
Elasticties Laurence et al,
Optimization: unconstrained optimization and P.96-157;
constrained optimization with equality Barnett et al,
 P.525-650;

4 DDifferen Partial Derivatives

tial First-order Partial Derivatives  Dowling E., p 100-110
Calculus Higher Order Partial Derivatives  Kapoor, P 7.2- 7.26
of Differential and Total Derivatives
 Laurence et al, P.510-
Multivaria Total Differentials 10
ble Total Derivatives 533, 545-558
Functions Rules and Partial Derivative of Implicit and Inverse Functions  Chiang A., 174-178
Optimization of Multivariable Functions  Barnett et al, P.697-
Constrained and Unconstrained Functions 703
Constrained Optimization-the Method of Lagrange
Composite Function
Economic Application of Partial Derivatives

5 Integratio The Concept of Integration Larson : chapter

n Properties of Integration 4(p247-282)
Techniques of Integration Knut:
Integration by Substitution
chapter8(p215-
Integration by Part
Integration by Partial Fraction 243)
The Definite Integral 11 Chiang: chapter
Properties of Definite Integral 13(p435-458)
Integral and area under the curve Kapoor, P 10.2 –
Economic Applications of Integrals 10.34
Consumers’ and producers” surplus
Barnett et al,
Total function derivation from marginal's
P.742-767, 789-
791, 835-849
Laurence et al,
P.356-425

6 Linear Definitions and Concepts  Chiang, P 470 – 496, P

Differenti First-Order-Linear differential Equations 549 -569
al and First-Order-Linear difference Equations 5 Laurence et al, P.586-646
Difference Economic Applications of Linear Differential
Equations and Difference Equations

Text Books:
 Barnet R.A. and M.R. Ziegler, (1994), Applied Mathematics for Business
Economics, Life Sciences and Social Sciences, 4th edition, MacMillan
College Publishing Company.
 Laurence D. Hoffmann, Gerald L. Bradley and Kenneth H. Rosen, Applied
Mathematics for Business Economics, Life Sciences and Social Sciences
 Chiang A.C, (1984), Fundamental Methods of Mathematical Economics,
 McGraw Hill, Inc.
 Knut Sydsæter and Peter Hammond: Mathematics for Economics I and II.
Ethiopian Edition
 Knut Sydsæter and Peter Hammond: Essentials of Mathematics for Economics.
References:
nd
 Allen R.G.D. ( 1963),Mathematical Economics , 2 edition Macmillan , new
York
 Allen R.G.D. (1962) , Mathematical Analysis for Ec onomists
,Macmillan, London
 Yamane T. (1978), mathematics for Economists: An elementary ,Survey
nd
,2
edition, prentice -Hall
 Dowling E.J.T., (1980) , Mathematics for Economists , Schaum’s out line
series, McGraw-Hill, Inc.
 Any other intermediate textbooks on “ Calculus and Microeconomic theory “ can
largely serve the purpose

Course Title: Linear Algebra for Economists

Course Code: Econ 1012

SCHEDULE OF LECTURE TOPICS AND READINGS

Period/Time Course Contents Reading Materials

Chapter 1. Matrix Algebra
Introduction • Chiang [1984]
Matrix Operations PP 54-102
Special Matrices • Dowling [1980]
Determinants PP 244-281,
Matrix Inversion 287-289
12 hrs Partitioned Matrices • Yamane [2002]
Rank of a Matrix and Linear Independence PP 348-557
Vectors and Vector Spaces • Bhardwaj[2005]
Powers and Trace of a Square Matrix PP 2.1-2.40
Sydaster, ch 14,
pp. 389-416
 Chapter 2. Systems of Linear Equations • Chiang
Matrix Representation of Linear Equations [1984)] PP
Solving Systems of Linear Equations 103-123
 Gaussian Elimination • Bhardwaj
9 hrs  Gauss-Jordan Method
[2005] PP
 Inverse Method
 Cramer’s Rule
2.41-2.74
Homogeneous Systems of Linear Equations Sydaster, ch
Economic Applications 14, pp. ch.15
PP (419-445)
Chapter 3. Special Determinants & Matrices in Economics
Introduction Sydaste, Chapter 2 (27-4
The Jacobean Determinant • Dowling
The Hessian Determinant
Eigenvectors and Eigen values
[2001] PP
6 hrs 262-283
Quadratic Forms

. Chapter 4. INPUT-OUTPUT ANALYSIS AND LINEAR

PROGRAMMING
21 hrs
Input-Output Model (Leontief Model) • Bhardwaj [2005]
Introduction sec 2.74-2.87, and 10.1-
Assumptions of Input Output Models 10.42
The Open Model • Chiang [1984] PP 121-130,
The Closed Model and PP 651-709
Linear Programming  Dowlig (1980) PP
Introduction 286-287, 317 350
Formulating Linear Programming Problems Kapoor (2002) PP 2.1-2.74,
Solving Linear Programming Problems
PP 12.1-13.40
 The Graphic Method
 The Simplex Method
 The Duality Theorem

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment
Assessment Methods
Student evaluation in this module consist both formative and summative assessments
including quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

REFERENCES
1. Chiang, Alpha C. (1984), Fundamental Methods of Mathematical Economics, Mc Graw-Hill, Inc
2. Bhardwaj, R. S.(2005) Mathematics for Economics and Business, Excel Books.
3. Knut sydæster and Peter Hammond: Mathematics Essentials for Economic analysis.
Ethiopian Editio
4. Knut sydæster and Peter Hammond: Further Mathematics for Economists. Ethiopian
Edition
5. Yamane, T. (2002), Mathematics for Economists: An Elementary Survey, 2nd ed., Prentice-Hall.
6. Dowling, E.T., (1980), Mathematics for Economists (Schaum's Outline Series), Mc Graw-Hill
7. Kapoor, V. k. (2002), Introductory Mathematics for Business and Economics, Sultan & Sons:
New Delhi
8. .Monga, G.S. (1972), Mathematics and Statistics for Economics, Vikas Publishing House.
9. Bowen, E.K., et al., (1987), Mathematics with Applications in Management and Economics, 6th
ed., Irwin Inc.
Module Name: Micro Economics
Module Category: Core

Module Code: Econ-M1021

Module Competency: Enables the student to make economic analysis & interpretation from firms & households perspective

Description Courses included in the module Remark

Micro Economics I Micro Economics II

Couse code Econ1021 Econ 1022

Cr Hrs 3 4

EtCTS 5 6

Pre-requisite Econ 1021

Mode of Delivery Semester Based

Module Description
The module contains two course; Micro economics I and Micro economics II. These courses cover theories of consumer
behaviour, producer behaviour and theories of market structure, the neoclassical theory of pricing for two product market
structures (monopolistic competition and oligopoly market structures), factor market pricing, general equilibrium analysis
and asymmetric information. It begins presenting the assumptions underlying each theory; it proceeds on analysing the
behaviour of economic unit (the consumer or producer) in an attempt to meet its objective and finding the equilibrium of
these economic units.

MODULE OBJECTIVE

 To introduce students to the fundamental concept of individual decision-making units such as consumers,
business firms and resource owners and income distribution
 Acquaint the students with the neoclassical theory of consumer behaviour, how each consumer makes decision to
maximize her/his utility.
 Provide the students with a detailed theories of production and cost, how firms organize their production process,
how firms decide to minimize costs.
 Offer a deeper understanding of the different market structures and how firms behave under perfectly competitive,
pure monopoly, monopolistically competitive and oligopoly markets.
 Give students an overview discussion of general equilibrium analysis and asymmetric information.
 COURSE NAME: MICROECONOMICS –
I COURSE CODE: ECON1021
Week Lecture Topic of the lecture Reference Materials

(hours)

Chapter one: Theory of Consumer Behaviour and demand

1. Consumer Preferences and Choices o A.Koutso

1.1. Consumer Preference yiannis,
1.2. Utility PP 13-60.
2. Approaches to measure Utility o H.S.
2.1. The Cardinal Utility approach Agrawal,
2.1.1. Assumptions of Cardinal Utility theory PP 97-
2.1.2. Total and Marginal Utility 260.
2.1.3. Law of diminishing marginal Utility (LDMU)
2.1.4. Equilibrium of a consumer
2.1.5. Derivation of the Cardinalist Demand
2.2. The Ordinal Utility Approach
2.2.1. Assumptions of Ordinal Utility approach
2.2.2. Indifference Set, Curve and Map
2.2.3. Properties of Indifference Curves
2.2.4. The Marginal rate of substitution (MRS)
5Weeks 15 hours 2.2.5. Types of Indifference Curves
2.3. The Budget Line or the Price line
2.3.1. Factors Affecting the Budget Line
2.3.1.1. Effects of changes in income
2.3.1.2. Effects of Changes in Price
2.4. Optimum of the Consumer
2.4.1. Effects of Changes in Income and Prices on Consumer
optimum
2.4.1.1. Changes In Income: Income Consumption Curve and
the Engel Curve
2.4.1.2. Changes in Price: Price Consumption Curve (PCC)
2.4.2. Decomposition of Income and Substitution Effects
(normal, inferior or giffen goods )
2.4.3. Derivation of market demand curve
2.5. Elasticity of demand

Chapter Two: Choice –involving risk and uncertainty

-Hal R. Varian
2.1. Introduction
2.2. Expected utility -R.S. Pindyck and D.L.
1.5 Week 4.5 hours 2.3. Risk aversion Rubinfeld
2.4. Diversification
2.5. Risk spreading

Chapter three: The Theory of Production

 3.1 Production function o A.Koutsoyiannis, PP 67-92
o H.S. Agrawal , PP 279-292
4Weeks 12 hours 3.2. Laws of production

3.2.1. The law of variable proportions

3.2.2. Laws of returns to scale

3.3. Choice of optimal combination

of factors of production

Chapter Four: Theory of Costs

4.1. Short-Run Costs o A.Koutsoyiannis, PP REFR

105-120
ENCE
4.2. Long-Run Costs o H.S. Agrawal , PP 359-
368 S
4.3.Derivation of Cost Functions from
1. A.
3 Weeks 6 hours
Production functions Koutsoy

4.4. Dynamic Changes in Costs- the Learning Curve Modern

Microec
onomic
s
Chapter Five: Perfect Competition Market 2. H.S.
Agrawal
5.1 The Short-Run Equilibrium of the Firm and o A.Koutsoyiannis, PP ,
industry 154-163 Principl
es of
5.2. Market Equilibrium Econom
2.5 ics, 7th
7.5 hours
Weeks 5.3. The Long-Run Equilibrium of the Firm edition.
3. Hal
and industry R.
Varian,
Interme
diate
Microeconomics: A Modern Approach, Forth Edition
4. C. Ferguson, Microeconomic Theory
5. R.S Pindyck and D.L.Rubinifeld, Microeconomics
6. E. Mansfield, Microeconomics: Theory and Applications
7. Robert H. Frank, Microeconomics and Behavior

* Any other Intermediate Microeconomics text book can also be used as a supplementary reading material.

COURSE NAME: MICROECONOMICS II

COURSE CODE: ECON 1022

Lecture
Week Topic of the Lecture Reference Materials
(hours)
 Chapter One: Pure Monopoly Market

1.1. Characteristics and source of monopoly

1.2. Short Run and Long-Run Equilibrium
1.3. price discrimination o A.Koutsoyiannis,
1.4. Multi-Plant Monopolist PP 171-189
1.5. Social Cost of Monopoly Power o H.S. Agrawal , PP
2Weeks 8hrs 470-477
R.S. Pindyck and D.L.
Rubinfeld, PP 351-356

Chapter Two: Monopolistic Competition

2.1. Assumptions o Koutsoyannis: pp

2.2. Product Differentiation, the demand curve 202 – 209
and cost of the firm o Dwivedi: PP 378 –
2Weeks 8hours
2.3. The Concept of Industry and product ‘group’ 388
2.4. Short-run and long-run equilibrium of the o Pindyck: PP 421 –
firm 425
2.5. Excess capacity and welfare loss
Chapter Three: Oligopoly

3.1. Non Collusive Oligopoly o Koutsoyannis: pp

3.1.1. Cournot’s Duopoly Model 216 – 251
3.1.2. The Kinked Demand Model o Dwivedi: PP 395 –
418
3.1.3. Bertrand’s Duopoly Model
o Pindyck: PP 428 –
3.1.4.Stackelberg’s Duopoly Model 453
3.2. Collusive Oligopoly
3Weeks 12 hours 3.2.1. Cartels

3.2.1.1. Cartels Aiming at Joint Profit

Maximization

3.2.1.2. Market Sharing Cartel

3.2.2. Price Leadership
3.2.2.1. The Low Cost Price Leader
3.2.2.2. The Dominant Firm
Chapter Four: Game Theory

4.1. Dominant Strategy Equilibrium o Koutsoyannis: pp

405 – 415
4.2. Nash Equilibrium o Pindyck: PP 458 –
470
2 Weeks 8hours 4.3. Mixed Strategy Equilibrium o Varian: PP 259-280

4.4. Prisoner’s Dilemma

4.5. Repeated Games and Enforcing A Cartel

 4.6. Sequential Game

4.7. Game of Entry Deterrence

Chapter Five: Pricing of Factors of Production and Income Distribution

5.1. Factor pricing in a perfectly competitive market o Koutsoyannis: pp

438 - 451
5.1.1. The demand for factors of production o Dwivedi: PP 435–
452
5.1.1.1. The demand for one variable productive o Pindyck: PP 488 –
factors 506

5.1.1.2. The demand for several variable inputs

1.5Weeks
6 hours 5.1.1.3. Market demand for a factor

5.1.2. Factor supply and factor prices

5.1.2.1. The supply of labour by an individual worker

5.1.2.2. The market supply of labour

5.1.2.3. Factor pricing

5.2. Factor pricing in imperfectly competitive markets o Koutsoyannis: pp

451 - 480
5.2.1. Monopolistic power in product market o Dwivedi: PP 458 –
475
5.2.1.1. Demand of the firm for a single variable
o Pindyck: PP 509 –
input
518
5.2.1.2. Demand of the firm for two or more
variable

inputs

10 hours 5.2.1.3. Market demand and supply of factors

2.5 Weeks
5.2.2. Monopolistic power in the factor market
(monopsony)

5.2.2.1. A monopolist using a single variable factor

5.2.2.2. A monopolist using two or more variable

inputs

5.2.3. Bilateral monopoly

5.3. Elasticity of factor substitution, technological

progress and income distribution

Chapter Six: General Equilibrium and Welfare Economics

 6.1. Partial and General Equilibrium Analysis o Koutsoyannis: pp
495 - 506
6.2. General Equilibrium in a Pure Exchange Economy o Dwivedi: PP 557 –
2 Weeks 8 hours 6.3. General Equilibrium in Production 561
6.4.Simultaneous Equilibrium of Production and o Pindyck: PP 562 –
Consumption 568, 573 – 580
6.5 Welfare Economics: Criterions
Chapter Seven: Introduction to Asymmetric Information

7.1. Adverse Selection o Pindyck: PP 591 –

4 hours 7.2. Moral Hazard 615
1 Week
7.3. Signalling
7.4. Asymmetric Information

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including quizzes, test
and final exam. Marks will be allocated according to the following grading schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

REFERENCES
1. A. Koutsoyiannis, Modern Microeconomics
rd
2. D.N.Dwivedi, 1997, Micro Economic Theory, 3 Ed., Vikas Publishing
3. R.S. Pindyck & D.L. Rubinfeld, Microeconomics.
th
4. Hal R. Varian, Intermediate Microeconomics: A Modern Approach, 6 Ed.
5. C.L.Cole, Micro Economics: A Contemporary Approach.
th
6. Ferguson & Gould’s, 1989, Microeconomic Theory, 6 Ed.
7. R.R. Barthwal, Microeconomic Analysis.
8. E. Mansfield, Microeconomics: Theory and Applications.
9. D.S. Watson, Price Theory & Its Uses.

Any other Intermediate Microeconomics book can also be used as a supplementary reading material.
Module Name: Macroeconomics
Module Category: Core
Module Code: Econ-M1031
Module Competency: Analyze and evaluate macroeconomic policy

Description Courses included in the module Remark

Macroeconomics I Macroeconomics II
Course code Econ-1031 Econ-1032
Cr Hrs 4 3
EtCTS 6 5
Pre-requisite _ Econ -1031
Mode of Delivery Semester Based

Module Description
This Module is divided in two parts. The first part is Macroeconomics I, course code Econ-1031, and it is offered
in the first semester for first year students. Macroeconomics I focus mainly on short run analysis of an economy
or business cycle. Hence, the main aim of this course is to present and discuss the different views of economists
(as represented by school of thought) on how an economy behaves in the short run, how equilibrium is achieve in
the short run, and the role of market forces and government in short run economic stabilization. For this purpose,
this part is divided in to three parts: Introduction, aggregate demand and supply analysis of a closed economy, and
the analysis of open economy macroeconomics.
The second part of the Module is Macroeconomics II, course code Econ-1032. Macroeconomics II is offered in
the second semester of year two only up on a success full completion of the first part of the macro module. This
part is divided in to four sections to present and discuss long run analysis of an economy or economic growth, the
micro foundations of macro analysis, recent developments and debates in macro theories and policies, and the
relevance and applicability of the Conventional macroeconomic theories and policies to the economies of the
developing world respectively.

Module objective
In this module the students are exposed to look at the aggregate analysis of an economy and the interrelationship
between various aggregate economic variables. It also incorporates the monetary and fiscal policy instruments
through which government can influence the value and dynamics of aggregate economic variables and thereby the
performance of economies. It also presents the analysis of transmission mechanism of the effect of
macroeconomic policies on the behavior of economic agents. Generally, the module enhances the
knowledge of the students
regarding the functioning of the economy as a whole as well as the rest of the world thereby to develop a closer
link between academic learning and the professional practice in analyzing various economic aspects.

Course Title: Macroeconomics I

Econ 1031
Schedules of lecture time, Topics and Reading materials

We Lecture Topics Of Lecture Main Reference

ek (Hour)
Chapter 1: The State of Macroeconomics – Introduction
6 hour 1.1 What macroeconomics is about?  N.GregoryMankiw,
1.2 Basic Concepts and Methods of Macroeconomics 2007,
th
Analysis Macroeconomics 4
1.3 Macroeconomic Goals and Instruments edition
1.4 The State of Macroeconomics: Evolution and Recent  William H. Branson,
Developments 2006
Classical macroeconomics Macroeconomic
Keynesian macroeconomics Theory and Policy
Neo-classical macroeconomics
Chapter 2: National Income Accounting

8 hour 2.1 The concepts of GDP and GNP

2.2 Approaches of measuring national income  N.GregoryMankiw,
(GDP/GNP) 2007,
th
2.3 Other Social Accounts (GNP, NNP, NI, PI and DI) Macroeconomics 4
2.4 Nominal versus Real GDP edition
2.5 The GDP Deflator and the Consumer Price Index  William H. Branson,
2.6 GDP and Welfare 2006
2.7 The Business Cycle Macroeconomic
2.8 Unemployment and Inflation Theory and Policy
Chapter 3:Aggregate Demand in the closed Economy
14 hour 3.1. Foundations of Theory of Aggregate Demand  N.GregoryMankiw,
th
3.2. The Goods Market and the IS curve 2007,Macroeconomics 4
edition
3.3. The Money market and the LM curve
 3.4. The Short Run Equilibrium
 William H. Branson,
3.5. From the IS-LM to Aggregate demand
2006
Macroeconomic
Theory and Policy
Chapter 4:Aggregate Demand in the Open Economy
12 hour 4.1.International flows of Capital Goods  N.GregoryMankiw,
4.2. Saving and Investment in the Small Open 2007,
th
Economy Macroeconomics 4
4.3.Exchange rates edition
4.4.The Mundell-Fleming model  William H. Branson,
4.5.fiscal and monetary policies in an open economy 2006
with perfect capital mobility Macroeconomic
Fixed exchange rate Theory and Policy
Floating exchange rate
4.6 Limitations of the Mundell-Fleming model
Chapter 5: Aggregate Supply

8 hour 5.1.Introduction

5.2. The Classical Approach to Aggregate Supply

5.3. The Keynesian approach to Aggregate Supply

5.3.1. The Sticky Price model

5.3.2. The Sticky Wage Model

5.3.3. The worker- misperception model

5.3.4. Imperfect information Analysis

Chapter 6: Behavioural Foundations : theories of consumption 

16 6.1 the Keynesian consumption Function 
6.1 the early empirical successes
6.2 secular Stagnation, Simon Kuznets and the
consumption puzzle
 6.3 Irvin Fischer’s Model
6.4 Modigiani’s Life cycle Hypothesis model
6.5 Friedman’s permanent income Hypothesis
6.6 Hall’s Random Walk model
Rational expectations
Adaptive
expectations Naïve
expectations

Reference:

Text Books

th
1. N. Gregory Mankiw, 2007, Macroeconomics 4 edition Worth Publishers USA
2. William H. Branson, 2006 Macroeconomic Theory and Policy
3. Dornbusch, R. and S. Fischer: Macroeconomics
Additional readings

th
4. Eduard Shapiro, 2007. Macroeconomic Analysis 5 edition New Delhi
5. Olivier Blanchard, 1997.Macroeconomics Prentice Hall Inc. New jersey USA
th
6. Frederick Mishkin, 1998. The Economics of Money, Banking and Financial Markets 5 edition USA.
th
7. Colander, 2001. Macreconomics 4 edition Newyork.
Course Title: Macroeconomics II
Econ 1032
Course Description

Macroeconomics II is divided in to six chapters. The first Chapter discusses the theories of investment. The
second chapter is about theories of money demand and supply; followed by is the third chapter that presents the
macroeconomic policy debates. Chapter four is concerned with models of economic growth including
Neo- Classical theories of economic growth. It mainly deliberates the Harod-Domar, the Solow- Swan, and
Solow-Swan with technology models of economic growth. The fifth chapter deals with the macroeconomic
aspects of labour market. Finally, the sixth chapter present a review of the applicability of conventional
macroeconomic tools for the developing world with special reference to African economy.
Course Objective
This course has the objective of providing students with the basics of macroeconomic analysis. The course is thus
supposed to let students understand the fundamentals of the interactions of economic agents at the aggregate
level. With this perspective, students are expected to acquire at least the framework to further analyze the
aggregate interactions among economic agents themselves and the outcomes that these interactions generate in the
economy at some level of aggregation. This is fundamentally based on the wealth of macroeconomic theories
that can be ascribed to the classical and Keynesian schools of thought.

Week Lecture Topics Of Lecture Main Reference

(Hour)
Chapter 1: theories of Investment
12 hour 1.1 The concept of investment  N.GregoryMankiw,
1.2 types of investment 2007,
th
Business fixed investment Macroeconomics 4
Inventory investment edition
Residential investment  William H. Branson,
1.3 Neoclassical Model 2006 Macroeconomic
1.4 Keynesian Explanation Theory and Policy
1.5 Tobin’s-Q Model
1.5 Accelerator (Inventory Model)
Chapter 2: Money Demand and Money Supply
6 hour 2.1 Money supply and monetary expansion mechanism  N.GregoryMankiw,
2.2 Money demand –portfolio and transaction theories 2007,
th
Macroeconomics 4
edition
Chapter 3: The Labor market
6hours 3.1 Two ways of analyzing the labour market
3.2 The macroeconomics of the labour market
3.3 Labour-market search and unemployment
3.4 Types and Causes of Unemployment
3.5 Classical and Neoclassical Microeconomic model of
the labour market
3.6 New Keynesian view of the labour

Chapter 4: Macroeconomic Policy Debates

5 ho 4.1 Should Policy be Active or Passive?  N.GregoryMankiw,
urs 4.2 Ignorance, Expectation and the Lucas Critique 2007,
th
4.3 Should policies be conducted by Rule or by Macroeconomics 4
Discretion? edition
4.4 Rules for monetary policy  William H. Branson,
2006 Macroeconomic
Theory and Policy
Chapter 5: Models of Macroeconomic Growth

12 5.1 Introduction: Modeling Economic Growth  N.GregoryMankiw,

2007,
hours 5.2 Theories of Economic Growth th
Macroeconomics 4
5.2.1 The Harrod-Domar Growth Model edition
 William H. Branson,
5.2.2 The Neo-classical Growth model
2006
5.2.3 Endogenous Growth Theory Macroeconomic
Theory and Policy

Chapter 6: Macroeconomic Theories and African Economies

4 hour 6.1 Basic Features of African Economies
6.2 The Applicability of Conventional Theories to African
Economies
Module Delivery Methods
The delivery method shall be student-centered. Students are highly expected to participate in class works at the
middle and end of each session and in group discussions inside and outside of the class. Specifically the course
will be delivered through the following methods:

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including quizzes, test
and final exam. Marks will be allocated according to the following grading schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

Reference:

Text Books

th
1. N. Gregory Mankiw, 2007, Macroeconomics 4 edition Worth Publishers USA
2. William H. Branson, 2006 Macroeconomic Theory and Policy
Additional readings

th
3. Eduard Shapiro, 2007. Macroeconomic Analysis 5 edition New Delhi
4. Olivier Blanchard, 1997.Macroeconomics Prentice Hall Inc. New jersey USA
th
5. Frederick Mishkin, 1998. The Economics of Money, Banking and Financial Markets 5 edition USA
th
6. Colander,2001. Macreconomics 4 edition Newyork
Module Name: Statistical Tools in Economics
Module Code: Econ-M1041
Module Competency:
Gives the student the necessary statistical understanding for farther economic researching
Description Courses included in the module Remark
Introduction to Statistics Statistics for Economists

Course code Econ-1041 Econ-1042

Cr Hrs 3 3
EtCTS 4 5
Pre-requisite _ Econ -1041
Mode of Delivery Semester Based

Module Description
Throughout our daily lives; we use statistical concepts intuitively and we all think statistically. If not, think how
many times you have decided to take a jacket with you because you have predicted it will be cold after hours;
how many times you have given your blood for medical test in a laboratory; etc. In fact, modern society is driven
by statistics.
This module introduces students to the fundamental knowledge on statistical tools, methods and their
application and is also designed to acquaint students with the basics of probability theory, sampling, and
inferential statistics (estimation and hypothesis testing). It is thus aimed at creating adequate statistical theories
that deals with both descriptive and inferential statistics as applied in economics.
Objectives of the Module

The module aims to:

 Acquaint students with the basic principles of statistics;

 Help students build on the basics to intermediate issues in statistics such as probability distribution,
parameter estimation and hypothesis testing;
 Create exposure to computer softwares used for statistical analyses;
 Provide students with the applications of statistics in economics; and
 Help students work with economic data using simple computer and/or statistical softwares/packages.
Course Name: Introduction to Statistics

Course Code: Econ1041

COURSE DESCRIPTION:
We use statistical concepts intuitively in our daily lives; and believe it or not, we all think statistically. If not,
think how many times you have decided to take a jacket with you because you have predicted it will be cold after
hours; how many times you have given your blood for medical test in a laboratory; etc. In fact, modern society is
driven by statistics. This course is an introductory course which helps students get a preliminary knowledge on
statistical tools, methods and their application. Data and probability related issues will be addressed. On the
progress of the course, emphasis will be given to sampling theory, data collection and presentation, measures of
central tendency and variation, linear regression and elementary probability theory. The rationale for providing
Introduction to Statistics is to equip you with an arsenal of techniques for understanding Statistics for
Economists, which focuses on probability theory, parameter estimation and hypothesis testing.
COURSE OBJECTIVES:
Upon completing this course, you will be able
to:
 Explain the basic concepts of Statistics;
 Collect and organize statistical data;
 Identify the different types of sampling techniques;
 Analyze and conclude based on the collected data; and
 Understand the basics of introductory probability theory.

Course Contents for Lecture:

1. INTRODUCTION (03 hrs)

1.1 Definition of statistics
1.2 Classification statistics
1.3 Applications of Statistics
2. SAMPLING THEORY (06 hrs)
2.1 Basic Concepts
2.2 Reasons for Sampling
2.3 A Review of Methods of Sampling (Probability Vs Non-Probability Sampling
Techniques)

3. DATA COLLECTION AND PRESENTATION 08 DATA COLLECTION AND PRESENTATION (08 hrs)
3.1 Data Collection
3.2 Classification of Data
3.3 Methods of Data Collection
3.4 Data Collection
3.5 Classification of Data
3.6 Methods of Data Collection
3.7 Tabular Methods of Data Presentation
3.8 Frequency Distributions
3.9 Graphic Methods of Data Presentation
4. MEASURES OF CENTRAL TENDENCY (09 hrs)
4.1 The Use of Summation Notation
4.2 The Mean and its Properties
4.3 Arithmetic, Geometric, and Harmonic
4.4 The Median and Other Measures of Location
4.5 Deciles, Quartiles, Percentiles
4.6 Mode and its properties
5. MEASURES OF VARIATION (09 hrs)
5.1 Introduction
5.2 Types of Measures of Variation
5.2.1 Range, Interquartile Range, Mean Deviation
5.2.2 Variance and Standard Deviation
5.2.3 Coefficient of Variation, Standard Scores, Z- scores)
5.3 Moments, Skewness and Kurtosis
6. SIMPLE LINEAR REGRESSION AND CORRELATION (07 hrs)
2
6.1 Simple Linear Regression (The Method of Ordinary Least Square (OLS), R )
6.2 Linear Correlation (Coefficient of Correlation, Rank Correlation Coefficient)
7. ELEMENTARY PROBABILITY (06hrs)
7.1 Definition of Terms and Concepts
7.2 Principles of Counting
7.3 Some Rules of Probability
7.4 Conditional and Independent Probabilities
7.5 Basic Concepts of Probability Distributions
REQUIRED REFERENCES
th
1. Freund, J.E. and G.A. Simon (1992). Modern Elementary Statistics, 8 ed., Prentice-Hall.
rd
2. Hooda, R. P. (2003). Statistics for Business and Economics, 3 ed., New Delhi: Macmillan.
nd
3. Monga, G.S. (2000). Mathematics and Statistics for Economics, 2 ed., Delhi: Vikas Publishing.
4. Freund, E.J. Modern Elementary Statistics, John Wiley.
5. Gupta, C.P. Statistical Methods.
6. Gupta, C.B and Gupta, V. An Introduction to Statistical Methods
7. Leven,J. Elementary Statistics in Social Research.
8. Pine, V.R. Introduction to Social Statistics: Its Elements and Application
Course Name: Statistics for Economists

Course Code: Econ1042

COURSE DESCRIPTION:
This course is largely a mathematical statistics course. It is designed to acquaint students with the basics
of probability theory, parameter estimation and hypothesis testing. A prior knowledge of such mathematical
concepts as differentiation, integration and matrix algebra is mandatory. The rationale for providing Statistics for
Economists is to equip you with an arsenal of techniques for understanding econometrics, a subject that focuses
on empirical analysis of problems arising in social sciences such as economics, politics, etc. Students are thus
advised at the outset to bear in mind the integration between statistics and econometrics, which is offered next
semester.
COURSE OBJECTIVES:
Upon completing this course, make sure that
you:
 Understand the concepts of probability theory and
distributions;
 Know the various types of parameter estimation and hypothesis tests;
and
 Are able to apply statistics in economic analysis and
modeling.
Course Contents for Lecture:

1. OVERVIEW OF BASIC PROBABILITY THEORY (06 hrs)

1.1 Sample Space, Sample Points, Events & Event Space
1.2 Definitions of Probability
1.3 Axioms of Probability
1.4 Counting Procedures
1.5 Conditional Probability and Independence
1.6 Bayes' Theorem
2. RANDOM VARIABLES AND PROBABILITY DISTRIBUTIONS (09 hrs)
2.1 The Concept & Definition of a Random Variable
2.2 Discrete Random Variables and their Probability Distributions
2.3 Continuous Random Variables and their Probability Density Functions
2.4 The Expected Value of a Random Variable
2.5 Moments and Moment Generating Functions
3. SPECIAL PROBABILITY DISTRIBUTIONS AND DENSITIES (09 hrs)
3.1 Bernoulli & Binomial Distributions
3.2 Hyper-Geometric Distribution
3.3 The Poisson Distribution
3.4 Uniform Density & The Normal Distribution
3.5 Gamma & Beta Distribution
 3.6 The Normal Approximation to the Binomial Distribution
4. JOINT AND CONDITIONAL PROBABILITY DISTRIBUTIONS (06 hrs)
4.1 Joint and Marginal Distributions
4.2 Conditional Distributions and Independence
4.3 Expectation
4.3.1 Covariance and Correlation
4.3.2 Conditional Expectation
4.3.3 Independence and Expectation
5. SAMPLING AND SAMPLING DISTRIBUTIONS (06 hrs)
5.1 Random Sample
5.2 Statistic and Sample Moments
5.3 Law of Large Numbers
5.4 Central Limit Theorem
5.5 Sampling from Bernoulli and Poisson Distributions
5.6 Sampling from a Normal Distribution
6. ESTIMATION (06 hrs)
6.1 Basic Concepts
6.2 Methods of Point Estimation
6.3 Desirable Properties of Estimators
6.4 Interval Estimation
7. HYPOTHESIS TESTING (06 hrs)
7.1 Basic Principles in the Design and Evaluation of Hypotheses
7.2 Large Sample Tests
7.3 Small Sample Tests

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including quizzes, test
and final exam. Marks will be allocated according to the following grading schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

REQUIRED REFERENCES:
rd
1. Mood, A.M., F.A. Graybill and D.C. Boes (1988). Introduction to the Theory of Statistics, 3 ed., McGraw-Hill.
th
2. Miller, I. and M. Miller (2002). John E. Freund’s Mathematical Statistics, 6 ed., Delhi: Pearson.
th
3. Freund, J.E. and G.A. Simon (1992). Modern Elementary Statistics, 8 ed., New Jersey: Prentice-Hall.
rd
4. Hooda, R. P. (2003). Statistics for Business and Economics, 3 ed., New Delhi: Macmillan.
th
5. Freund, J.E. and R.E. Walpole (1987). Mathematical Statistics, 5 ed., New Delhi: Prentice-Hall.
th
6. Hays, W.L (1994). Statistics, 5 ed., Florida: Holt, Rinehart and Winston, Inc.
th
7. Hoel, P.G. (1984). Introduction to Mathematical Statistics, 5 ed.
8. Mendenhall, W., R. L. Scheafer and D.D. Wackerly (1981). Mathematical Statistics with
nd
9. Applications, 2 ed.manathan, R. (1993). Statistical Methods in Econometrics, Academic Press.
Module Name: Mathematical application in Economics
Module Category: Core

Module Code: Econ-M2051

Module Competency: The module enables the student to solve the basic economic problems of optimization

Description Courses included in the module Remark

Mathematical Economics Statistics for Economists

Course code Econ-1051

Cr Hrs 3
EtCTS 5
Pre-requisite Econ -1011, Econ 1012
Mode of Delivery Semester Based

Module Description
This module introducesanddiscussesmathematicaltechniquesusedineconomicanalysissuchas constrained and
unconstrained optimization theories applicable in solving consumer and producer optimization problems and
general equilibrium models. It also equip students with the concept of the Kuhn–tucker theorems, production
theory, introduction to difference and differential equation with their respective applicat ions to solve the real and
practical problems in the economy and formulate a sound and appropriate economic policies

Module Objective

 Accustomthestudentswithbasicmathematicaltoolstounderstandthealreadyacquired
knowledgeofeconomictheories empirically
 Introducethestudentsabout thequantitativeanalysisofeconomicandnon-economic variables
sothattheycanusetheminformulating appropriateeconomicpoliciesthatcan solve practical and real
lifeproblems of asociet y
 Helpstudentstounderstandtheeconomictheoriesinquantitativetermsthatenablethem
tounderstandeconomicsthoroughly andconductproblemsolvinganddevelopment- oriented researches
in theeconomy
Course Title: Mathematical Economics
Course Code: Econ1051

SCHEDULE OFLECTURE TOPICS, ACTIVITIESAND READING

Week Lectur Conceptual Focus Reading

e(hrs) (Foralltopics
,references in the guide book
and any other
contemporary related materials
are recommended
1 3 1. Introduction  Chiang(1984)-
1.1 Mathematical economics vs non mathematical economics  Allen(1986)-
1.2 Review on Deferential AndIntegral Calculus  Dowling(198
1.2.1 Basic rules of differential calculus  Kapoor (2002)-
1.2.2 Basic rules of integral calculus Knut

4 12 2. Derivatives in Use  Chiang(1984)-chapters

2.1Elasticities: definition and as logarithmic derivatives 7,8,9&10
2.2Higher-Order Derivatives  Allen(1986)-chapters VII,XII
 Concavity and convexity & XVII
 Linear approximations (the differential of a Dowling(1980)-chapters
function; rules for differentials) 3,4,5 & 9
 Polynomial Approximations (quadratic and higherKapoor (2002)-chapters 5,6 & 7
order approximations)
 Estimation of functions (Maclaurin and Taylor
series)
 Intermediate value theorem, Newton method
2.3Multivariate Calculus
 Partial derivatives
 Second partials and cross partial derivatives
(Young's theorem)
 The multivariate chain rule
 Homogeneous functions and Euler's theorem
 Total differentials and implicit differentiation
2 6 3. UnconstrainedOptimization  Chiang
3.1 Functions of onevariable (1984)-
3.2 Function ofseveral independent variables chapter 11
3.3 Implicit functions and the unconstrained envelope theory.  Allen (1986)-
chapter XIV
3 9 4. ConstrainedOptimization  Chiang
4.1 One variable constrained optimization with Non- (1984)
negative constraint  Kapoor
4.2 Two variablesproblemswith equalit yconstrains (2002)-
4.3 Inequalit y constraints and the theorem of Kuhn-Tucker chapter 8
4.4 The General Case : Mixed constraint

2 6 5. ComparativeStaticAnalysis  Chiang
5.1 The nature ofcomparative static Analysis (1984)-
5.2 Differentiatingsystems of Equations chapters 6,7
5.3 TheJacobeanand independence of non–linear functions &8
5.4 Jacobean andHessianDeterminates
5.5 Comparative Static of General Function Models
5.6 Limitation of Comparative Static Analysis
1 3 6. DYNAMIC OPTIMIZATION  Chiang
6.1 Discrete time Optimization (1984)-
6.2 Continuous Time Optimization chapters 14,
6.3 Optimal control theory 15, 16 & 17
6.4 Economic Applications Allen (1986)-
chapters XVI
1 3 7. Differential Equations - KnutSyda
7.1 Definition and type of differentialequations
ster:Chap
7.2 Solutionofa differential equation
7.3 First order linear differentialequations ter 4(69-
7.4 Exact Different ial equations
7.5 Second order linear differentialequations 87)
7.6 EconomicApplicationsofdifferentialequations
Chiang:Chapter
2 6 8. DifferenceEquation Knut:Chapter
8.1 Definitions and concepts
8(193-198)
8.2 First order difference equation
8.3 Second order difference equations
8.4 EconomicApplications Chiang:Chapter
 The cobweb Model 16(549-569
 the Dynamic stabilit y ofequilibrium
 Market modelwithinventory
 Dynamic Multiplier

-71-
Module Delivery Methods
The delivery method shall be student-centered. Students are highly expected to participate in class
works at the middle and end of each session and in group discussions inside and outside of the
class. Specifically the course will be delivered through the following methods:

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments
including quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

REQUIRED REFERENCES
1. Chiang, Alpha C. (1984), Fundamental Methods of Mathematical Economics, McGraw-Hill.
2. Allen, R.G.D. (1982), Mathematical Analysis for Economists, Macmillan, London
3. Kapoor, V. K. (2002), Introductory Mathematics for Business and Economics, Sultan & Sons.
4. Dowling, E.T., (1980), Mathematics for Economists (Schaum's Outline Series), McGraw-Hill
5. Sydsaeter ,K. andHammond , P. (2002), Essential Mathematics foreconomic analysis,
prentice– Hall.
6. SydsaeterK. StronA,,and BerckP. (2000), Economists‘Mathematical manual ,
third editionSpringer .
7. Yamane, T.( 1978), Mathematics foreconomists: An Elementarysurvey,2nd edition
, Prentice –Hall
rd
8. Henderson, J.M. and R.E. Quandt (1980), Microeconomic Theory: A Mathematical Approach, 3 ed.,
McGraw-Hill.
9. Klein, Michael (1998), Mathematical Methods for Economics, Addison-Wisley.
th
10. Varian, H.T. (1996), Intermediate Microeconomics: A Modern Approach, 4 ed., Norton

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Module Name: Econometrics and Research Methods
Module Category: Core
Module Code: Econ-M2061
Module Competency:
Apply economic models to conduct research at various levels and write economic researches.

Courses in the Module:

Mode of
Course Title Course Code Prerequisite Cr. Hr. EtCTS
delivery

Econometrics I Econ 2061 Econ 1042 3 6

Economics II Econ 2062 Semester- Econ 2061 3 6

based
Research Methods in Econ 2063 3 4
None
Economics

Module Description:
This module is composed of courses in introductory econometrics and research methods. It will
familiarize students with the basic concepts of economic research particularly using econometric models
and software
packages. Students will be acquainted with various types of scientific methods, research designs, principles
and problems of research in economics. The module will help students to learn the key steps in quantitative
research including topic selection, defining a research problem (identifying knowledge gap), reviewing the
literature, preparing research proposal, designing survey instruments, data collection, analysis and
interpretation of economic data. These will also be aided by estimation using statistical packages such as
STATA, EViews, PcGive, etc. In the econometric modelling, students will be introduced to econometrics
and go to introductory topics in simple linear regression, multiple regression, dummy variable regression,
simultaneous equation modelling, time series modelling and panel data modelling. Hypothesis testing,
prediction as well as violations of the classical model such as multicollinearity, heteroscedasticity and
autocorrelation will also be appreciated. Students are encouraged to design a research proposal, conduct the
actual research work, write, and present a research report using computers.

Module Objectives:
After completing this module, students will be able to:
 Acquaint students with the basics of econometrics;
 Acquaint students with various methods of research;
 Identify different types of research;
 Prepare a standard research proposal;
 Understand various methods of data collection and analysis;
 Enable design appropriate methodology of research and evaluate alternative techniques of
data analysis;
 Help students work with economic data using softwares/packages;
 Write standard research reports; and
 Develop presentation skills in addressing theoretical and empirical issues.

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Course Name: Econometrics I

Course Code: Econ 2061

Course Description:

The course aims at introducing the theory (and practice) of cross-sectional econometrics. It first makes an
introduction to the basic concepts in econometrics like economic and econometric modeling as well as types
of data; then proceeds to the simple classical linear regression model and introduces estimation
techniques method of moments, ordinary least squares and maximum likelihood estimation, inference and
analyses of residuals. This is then built into the multiple linear regression. After making tests of
linear restrictions emanating from economic theory, the course will finally try to highlight the problems of
multicollinearity, heteroscedasticity and autocorrelation. The course builds upon your previous course
Statistics for Economists. Hence, familiarity with the material, particularly sampling distributions, estimation
and hypothesis testing will be of much help. These will be applied on Ethiopian/international data using
statistical packages.

Course Objectives:

The main objective of this course is to enable students have a good background knowledge on cross-
sectional econometric models. More specifically, after the completion of the course, students are expected to:
 Distinguish between economic and econometric models;
 Do simple and multiple regression with economic data (both manually and using statistical packages);
 Interpret regression results (like coefficients and R2) and test hypotheses (both manually and
using statistical packages); and
 Detect (in)existence of problems of multicollinearity, heteroscedasticity and autocorrelation as well as
suggest how to rectify such problems (both manually and using statistical packages).

Course Contents for Lecture:

1. Introduction (4 hours)
1.1. Definition and Scope of Econometrics
1.2. Models: Economic models and Econometric models
1.3. Methodology of Econometrics
1.4. The Sources, Types and Nature of Data
2. Simple Linear Regression (17
hours)
2.1. Concept of Regression Function
2.2. Method of Moments & Method of Least Squares
2.3. Residuals and Goodness-of-fit
2.4. Properties of OLS Estimates and Gauss-Markov Theorem
2.5. Maximum Likelihood Estimation
2.6. Confidence Intervals and Hypothesis Testing
2.7. Predictions using Simple Linear Regression Model
3. Multiple Linear Regression (13
hours)
3.1. Method of Ordinary Least Squares revised
3.2. Partial Correlation Coefficients & their Interpretation
3.3. Coefficient of Multiple Determination
3.4. Properties of Least Squares and Gauss-Markov Theorem
-74-
 3.5. Hypothesis Testing in Multiple Linear Regression
3.6. Predictions using Multiple Linear Regression
4. Violations of the Assumptions of the Classical Model (14 hours)
4.1. Multicollinearity
4.2. Heteroscedasticity
4.3. Autocorrelation
4.4. Specification Errors: Omission of Variables
4.5. Tests of Parameter Stability

Contents for Computer Lab.:

1. Introduction to STATA (1 hours)

2. Data Management using STATA (5 hours)
3. Simple Linear Regression using STATA (3 hours)
 Method of least squares
2
 ANOVA and Estimation of R
 Hypothesis testing and confidence intervals
4. Multiple Linear Regression (MLR) using STATA (2 hours)
 Method of ordinary least squares revised to MLR
 Coefficient of multiple determination
 Linear restrictions and hypothesis testing
5. Testing for Violations of the Assumptions of the Classical Model using STATA (5 hours)
 Multicollinearity
 Heteroscedasticity

REFERENCES:
th
1. Gujarati, D. N. (2004). Basic Econometrics, 4 edition, McGraw-Hill.
nd
2. Maddala, G. S. (1992). Introduction to Econometrics, 2 edition, Macmillan.
nd
3. Wooldridge, J. (2004). Introductory Econometrics: A Modern Approach , 2 ed.
4. Enders, W. (2004). Applied Econometric Time Series, John Wiley & Sons: Singapore.
5. Koutsoyiannis, A. (2001). Theory of Econometrics, Palgrave: New York.
rd
6. Johnston, J., Econometric Methods, 3 edition.
nd
7. Kmenta, J. Elements of Econometrics, 2 edition.
8. Intrilligator M.D, R.G. Bodkin, and D. Hsiao (1996). Econometric Models, Techniques and
Applications.

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Course Name: Econometrics II

Course Code: Econ 2062

Prerequisite: Econ 2061

Course Description:

This course is a continuation of Econometrics I. It aims at introducing the theory (and practice) of
regression on qualitative information, time series and panel data econometrics as well as simultaneous
equation modelling. It first makes an introduction to the basic concepts in qualitative information modelling
such as dummy variable regression and binary choice models (LPM, Logit and Probit). Elementary time
series models, estimations and tests for both stationary and non-stationary data will then be discussed.
It also covers introduction to simultaneous equation modelling with alternative estimation methods.
Introductory pooled cross-sectional and panel data models will finally be highlighted. All of these theoretical
concepts will also be complemented by computer lab practicals using statistical packages such as STATA,
EViews, PcGive, etc. applied on available Ethiopian/international data.

Course Objectives:
After the completion of this course, students are expected
to:
 Understand the basic concepts in regression involving dummy independent and dependent variables;
 Know the theory and practice of elementary time series econometrics;
 Understand the motivation and estimation methods of simultaneous equation modelling;
 Get introductory ideas on linear panel data models; and
 Apply those theoretical concepts in estimation using statistical softwares.

Course Contents for Lecture:

1. Regression Analysis with Qualitative Information: Binary (or Dummy Variables) (15
hours)
1.1. Describing Qualitative Information
1.2. Dummy as Independent Variables
1.3. Dummy as Dependent Variable
1.3.1. The Linear Probability Model (LPM)
1.3.2. The Logit and Probit Models
1.3.3. Interpreting the Probit and Logit Model Estimates
2. Introduction to Basic Regression Analysis with Time Series Data (18
hours)
2.1. The nature of Time Series Data
2.2. Stationary and non-stationary stochastic Processes
2.3. Trend Stationary and Difference Stationary Stochastic Processes
2.4. Integrated Stochastic Process
2.5. Tests of Stationarity: The Unit Root Test
3. Introduction to Simultaneous Equation models (8
hours)
3.1. The Nature of Simultaneous Equation Models
3.2. Simultaneity bias
3.3. Order and rank conditions of identification (without proof)
3.4. Indirect squares and 2SLS estimation of structural equations
4. Introduction to Panel Data Regression Models (7
hours)
4.1. Introduction
4.2. Estimation of Panel Data Regression Model: The Fixed Effects Approach
4.3. Estimation of Panel Data Regression Model: The Random Effects Approach
-76-
Contents for Computer Lab.:

1. Regression with Qualitative Information using STATA (6 hours)

 Dummy as Independent Variables
 Dummy as Dependent Variable
- The Linear Probability Model (LPM)
- The Logit and Probit Models
- Interpreting the Probit and Logit Model Estimates
- Marginal Effects of Probit and Logit Model Estimates
2. Introductory Time Series Regression using STATA/EViews/PcGive (5 hours)
 Tests of Stationarity: the Unit Root Test
 Estimation of Stationary time series
 Autocorrelation
 Estimation of Non-stationary time series
3. Introductory Panel Data Regression Models (5 hours)
 Fixed Effects Model
 Random Effects Model

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REFERENCES:
th
1. Gujarati, D. N. (2004). Basic Econometrics, 4 edition, McGraw-Hill.
nd
2. Maddala, G. S. (1992). Introduction to Econometrics, 2 edition, Macmillan.
nd
3. Wooldridge, J. (2004). Introductory Econometrics: A Modern Approach , 2 ed.
4. Koutsoyiannis, A. (2001). Theory of Econometrics, Palgrave: New York.
rd
5. Johnston, J., Econometric Methods, 3 edition.
nd
6. Kmenta, J. Elements of Econometrics, 2 edition.
7. Intrilligator M.D, R.G. Bodkin, and D. Hsiao (1996). Econometric Models, Techniques and
Applications.

-78-
Course Description:

Research in any discipline is a base for its development. Basic knowledge in a discipline is also generated
through research. Economic research is additionally required for nations to grow at all levels and to have a
healthy macroeconomic environment. Research undertakings at household, firm, national and cross-country
levels are relevant. Understanding the basics of research in general and economic research in particular is,
therefore, vital. This course is an introductory course which helps students get a preliminary knowledge on
the various methods in research and their applications. Specific techniques and steps in economic research
will be addressed. Upon the progress of the course, emphasis will be laid on research proposal writing,
sampling techniques, data collection methods, hypothesis testing, data analysis, research report writing,
etc. Note that this course will equip you with an arsenal of techniques in the short-run to effectively write
term papers in various courses and your senior essay before graduation, and in the long-run to research on
various economic issues after your graduation.

Course Objectives:

After the completion of this course, students are expected

to:
 Define the concept of research;
 Distinguish between scientific sources vs. other sources of knowledge;
 Explain the assumptions that underlie research methodologies;
 Discuss the philosophy of research;
 Identify different types of research;
 Understand the steps to be followed to conduct an economic research;
 Be able to prepare a standard research proposal;
 Demonstrate the ability of analytical and critical thinking;
 Understand various methods of data collection and analysis;
 Be able to write standard research reports; and
 Develop presentation skills in addressing theoretical and empirical issues.

Course Name: Research Methods in

Economics
Course Code: Econ 2063
Course Contents:
1. Introduction (5 hours)
1.1. Definition of Research
1.2. Characteristics of Research
1.3. Classification of Research
1.4. Motivation in Research
1.5. Types of Research
2. Formulation of Research Problem and hypothesis (8
hours)
2.1. Research Problem
2.1.1. Source of Research Problem
2.1.2. Criteria of a good Research Problem
2.1.3. Formulating and testing of the problem
2.2. Research Hypothesis
2.2.1. Characteristics of a usable hypothesis
2.2.2. Difficulties in formulating Hypothesis
3. Research Design (9
hours)
-79-
 3.1. Definition
3.2. Components of Research Design
3.3. Related literature review
3.3.1. Characteristics of Related Literature
3.3.2. Recording of Reading for Literature
3.3.3. Note taking: Reviewing the literature
3.3.3.1. Parapharasing
3.3.3.2. Incorporating Direct Quotes
3.3.4. Proper Citation Style
3.4. Conceptualization of the different terms used in investigation
3.4.1. Variables
3.5. Research Proposal
3.5.1. Importance of Research Proposal
3.5.2. Elements of a Research Proposal
4. Census and Sample Investigation (9 hours)
4.1. Over View of Census and Sample Investigation
4.2. Sampling
4.2.1. Types of Sampling Techniques
4.2.1.1. Probability Sampling techniques
4.2.1.2. Non-probability Sampling Technique
4.2.2. Sampling and Non-Sampling Errors
5. Data Collection (6 hours)
5.1. Classification of Data
5.1.1. Primary Data
- Questionnaire Method
- Interview and its sorts
- Observation and its types
5.1.2. Secondary Data and its Classification
5.2. Sources of Information
5.3. Statistical units in collection of Data
- Types of Statistical Units
6. Data Processing and Analysis (6 hours)
6.1. Coding, editing and cleaning the data
6.2. Data analysis
6.3. Testing hypothesis
7. Writing the Research Report (5 hours)
7.1. The writing process
7.2. Types of research reports
7.3. Research report formats for long reports
7.4. Components of a research report
7.5. Presenting the research report

REFERENCES
1. Ranjit Kumar. 2005. Research Methodology: A step-by-step guide for beginners. London. Sage
Publications
2. C.R. Kothari. 2004. Research Methodology: Methods and Techniques. Second Revised Edition.
3. Guajarati, Damodar N. 2001. Basic Econometrics, : McGraw-Hill
4. Leedy, Paul. 1997. Practical Research: Planning and Design. Upper Saddle River: Prentice-Hall.
5. Mukherjee, C., H. White, and M. Wuyts. 1998. Econometrics and Data Analysis in Developing
Countries. London: Routledge.

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6. Newman, W. L. 1997. Social Science Research Methods: Qualitative and Quantitative
Approaches.
Boston: Ally and Bacon
7. Blaug, Mark. 1992. The Methodology of science: How Economists explain, second edition,
1992.

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments
including quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%
NB: the assessment method for laboratory class of each econometrics course will account 25% of the
total.
-81-
Module Name: Development Economics
Module Category: Core

Module Code: Econ-M2o71

Module Competency: Apply economic models to conduct research at various levels and write
economic reports apply developmental models to formulate and advice/consult developmental related
issues.

Description Courses included in the module Remark

Development Economics I Development Economics II

Couse code Econ2071 Econ 2072

Cr Hrs 3 3

EtCTS 5 5

Pre-requisite - Econ 2071

Mode of Delivery Semester Based

Module Description
The module is to provide a brief overview of the development and underdevelopment of nations and
outstanding development theories. It explores the principles, concepts and theories of that have been
developed and applied by economists for the study of the problems of developing nations. In addition, it
examines recent developments in theories of growth and transformation in the context of developing
economies and concentrates on key areas of concern to those responsible for development policy.
Furthermore, it will address the main challenges developing world faces and consider alternative polices and
modern approaches that may contribute to stimulating growth and speeding economic development in less
developed countries. Moreover, it introduces the student to some of the main development issues that have
contributed to the development paths pursued by developing countries like Ethiopia.

Module Objective

Understand how to formulate, test and measure economic models to undertake /conduct research.
Acquire the fundamental developmental concepts to understand contemporary economic problems of
developing
countries.

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Course Title: Development Economics I

Course Code: Econ 2071

SCHEDULE OF LECTURE TOPICS, ACTIVITIES AND READINGS

Lecture Description Readings
hours

1. Economics of Development: Concepts and

Approaches
9 1.1 Basic concepts and definition of M.P. Todaro & S.C. Smith,
th
development economics 9 ed. 2006 pp. 3-27;
1.2 The Scope and Nature of Development Economics
1.3 Interests in and Evolution of Development
Economics
1.4 Economic Growth and Economic Development Todaro, 1994- Chapter 1;
1.5 Three core values of Development Ray, 1998
1.6 Measurement and international comparison of
growth and development. Thirlwall, 2006, Ch.1
1.6.1 Conventional Measures of Development
and their Limitations
1.6.2 Alternative measures of level of development
 Physical Quality of Life Index,
 Human Development Index
 Human poverty Index
1.7 Obstacles to Development
1.8 Basic Requirements for Development
1.9 Development Gap
3 2. Structural features and common characteristics of M.P. Todaro & S.C. Smith,
th
the third world 9 ed. 2006 pp. 41-70
2.1 An over view of the diverse structure of developing
countries Todaro, 1994- chapter 2;
2.2 Common Characteristics of Developing Countries Ray, 1998

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20 3. Growth Models and Theories of development Todaro, 1994 pp. 69-92;
3.1 facts of economic growth and why growth rates Gills et al., 1996; Ray,
differ across countries 1998;
3.2 factors of Economic growth
3.3 Models and theories of economic growth M.P. Todaro & S.C. Smith,
and development 2006 pp (102-136)
3.3.1 Linear stages of growth models
 Rostow’s stage of growth M. Todaro, 1994 pp. 99 -
 Harod Domar growth model 121
 Solow growth model
3.3.2 Structural change models: Lewis theory of
Development
3.3.3 Dualistic Theories Thirwall, 2006, ch. 4
a. Social Dualism
Jones, ch. 1, 2
b. Technological Dualism
c. Financial Dualism

3.3.4 The process of Cumulative Causation

3.3.5 A Model of Low Level Equilibrium Trap
3.3.6 The Big-Push Theory.
3.3.7 The Balanced Growth
3.3.8 Unbalanced growth
3.3.9 The international dependence model
3.3.10 The Neoclassical counterrevolution
3.3.11 The new growth theories
6 4. Historic Growth and contemporary Development: Todaro, 1994;
Lessons and controversies
4.1 The Economics of growth M.P. Todaro & S.C. Smith,
4.1.1 Traditional Approach (Economic Factors) to 2006
Development Thirwall, 2006
a) Natural Resource

b) Capital Accumulation

c) Organization

d) Technological Progress

e) Division of Labor and Scale of Production

4.1.2 Institutional Approach to

Development a) Type of Government

b) Institutions

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 c) Social Structure of Population

d) Social Capital and Cultural Traits

4.2 The Historical record: Kuznets’s six characteristics

of Modern economic Growth
4.3 The limited value of the Historical Growth
Experience: Differing initial conditions

10 5. Income Inequality, Poverty and M.P. Todaro & S.C. Smith,

Development: Interconnections 2006 pp. 193-241
5.1 Overview on Income distribution,
poverty and economic growth Todaro (1994)-Chapter 5.
5.2 Measures of Income Inequalit y and povert y
5.2.1 Approaches to measures of Income Inequalit y Gillis (1992)-Chapter 4
5.2.2 Approaches to Measures of Absolute Poverty
5.3 Income Inequalit y and Economic Growth World Development Report
5.3.1 Kuznets Inverted U-hypothesis 1990, 1997, and 2000
5.4 Poverty Reduction and Economic Growth
5.5 Economic Characteristics of poverty groups
Rural poverty

Women and poverty

5.6 Policies Options for Poverty Reduction and
enhance income Distribution

Required References

1. Todaro, M., (1994) Economic Development, Fifth editions, Longman: New York and
London.

2. Todaro M.P. & Smith S.C. (2006) Development Economics, Ninth edition, Harlow, Pearson &
Addison Wesley: London.
3. Ray, D. (1998) Development Economics, Princeton University Press.
4. Gillis, Dwight H. Perkins, Michael R., Donald R. and Snodgrass, W.W. (1996) Economics of
Development, Malcolm. Norton & Company.
5. Meier, Gerald, M. and James E. Rauch (2000) Leading Issues in Economic Development,
Seventh edition, Oxford University Press: New York and Oxford.
6. Ghatak, S. (1995) Introduction to Development Economics, Third edition, Routledge: London.
7. Basu, Kaushik (1997) Analytical Development Economics: The Less Developed Economy
Revisited, The MIT Press: London.
8. Thirlwall, A.P. (2003) Growth and Development: With special reference to Developing
countries, Seventh edition, Palgrave Macmillan, UK.
9. Jones, introduction to Economic growth
10. Bardhan, Pranab and Christopher Udry (1999) Development Microeconomics, Oxford
University Press:

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11. Deaton, Angus (1997) The Analysis of Household Surveys: A Micro econometric Approach to
Development Policy, the World Bank, the John Hopkins University Press: Baltimore.
12. Dasgupta, Partha (1993) An Enquiry into Well-Being and Destitution, Clarendon Press: London.
13. World Bank, (1990, 1997, 2001) World development report.

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 Course Title: Development Economics I I

Course Code: Econ 2072

LECTURE TOPICS, ACTIVITIES AND READING

Week Lecture(hrs) Conceptual Focus Reading

3 9 1.1: The Basic Issue: Population Growth and the Quality of Life Todaro & Smith, pp

1.2 Trends of population growth and age structure 262-311

1.3: The Hidden Momentum of Population Growth Ray (1998),Ch. 9 and

1.4: The Demographic Transition 13

1.5: The Causes of High Fertility in Developing Countries: The Todaro(1997),Ch.6 and
Malthusian and Household Models
11
1.5.1: The Malthusian Population Trap
Jhingan(2007), ch 43
1.5.1.1: Criticisms of the Malthusian Model and
44, Meier
1.5.2: The Microeconomic Household Theory of Fertility and Rauch
1.5.2.1: The Demand for Children in Developing Countries (2000) Ch. 5. A,
B, C and C
1.5.2.2: Implications of Women’s Education for Development and
Fertility

1.6. The Consequences of High fertility: Some Conflicting Thirwall(2006),

Opinions ch6 and

1.6.1: Population Growth is Not a Real Problem ch.8

1.6.2: Population Growth is a Rea l Problem

1.7: The Empirical Argument: Seven Negative Consequences of

Population Growth

1.8: Some Policy Approaches

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 2. Human Capital: Education and Health in Economic Development Todaro & Smith, pp
2.1 Education and health in developing countries
2.2 Investing in Education and Health: The Human Capital Approach 262-311
2.3 Improving Health and Education: Why Increasing Income Is Not Ray (1998),Ch. 9 and
Sufficient?
2.4 Educational Systems and Development 1
 Educational Supply and Demand: The Relationship between 3
Employment Opportunities and Educational Demands
 Social versus Private Benefits and Costs
 Education, Inequality, and Poverty
2.5 Health Systems and Development Todaro(1997),Ch.6 and
2.6 The Gender Gap: Women and Education
2.7 Consequences of Gender Bias in Health and Education 1
2.8 Policies for Health, Education, and Income Generation 1

2 3. Rural-urban interaction, migration, and unemployment

6 3.1 Migration and urbanization dilemma
3.2 The Role of Cities and urban Giantism
3.3 Urban informal sector and urban unemployment
3.4 Economic model of Rural- Urban Migration: Ray (1998), ch. 10
 The Lewis model

 The Harris-Todaro model of Migration

Todaro & Smith, 9th
3.5 Comprehensive strategies for employment and migration ed. 2006, pp. 41-70

Todaro (1994), ch. 8

Meier and Rauch

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2 6 4. Agriculture and Economic Development Todaro
4.1 Agricultural Progress and Rural Development
4.2 The Structure of Agrarian systems in the Developing World &Smith(pp,422-469) Ray(1998)Ch 11,
4.3 The Important Role of Women in Agriculture
12, 13, 14, 15
4.4 The Economics of Agricultural Development
 Special features of agriculture
Todaro (1994) Ch. 9
 The contribution of agriculture to development

 Constraints of agricultural productivity Jhingan(2007), Ch. 38

 Agricultural strategies and the role of the

government in the agricultural sector
Thirwall(2006), ch 5

2 5. International trade and economic development: the Todaro &Smith(pp,

trade policy debate and Industrialization
577-665), ch 12, 13, 14
5.1 Role of foreign trade in development
5.2 Terms of trade Todaro(pp, 405-
6
5.3 The trade policy debate: Export
promotion industrialization versus Import 446&483-525),
substitution Industrialization Ray (1998) ,Ch. 16, 17, 18
5.4 Balance of Payments and Macroeconomic Stabilization
Thirwall(2006), ch 16

Meier and Rauch (200) Ch. 4

3 9 6. Foreign aid, debt, financial reform and development Todaro & Smith(pp,
6.1 Motivations for foreign aid
6.2 Foreign debt 706-788), Todaro(pp,
6.3 Foreign direct investment and MNCs
526-562), Meier(pp,
6.4 Financial reform
213-264)

Ray (1998) Ch. Thirwall(2006) , ch. 15

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
  Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%
Required References

14. Todaro, M., (1994) Economic Development, Fifth editions, Longman: New York and
London.

15. Todaro M.P. & Smith S.C. (2006) Development Economics, Ninth edition, Harlow, Pearson
& Addison Wesley: London.
16. Ray, D. (1998) Development Economics, Princeton University Press.
17. Gillis, Dwight H. Perkins, Michael R., Donald R. and Snodgrass, W.W. (1996)
Economics of Development, Malcolm. Norton & Company.
18. Meier, Gerald, M. and James E. Rauch (2000) Leading Issues in Economic Development,
Seventh edition, Oxford University Press: New York and Oxford.
19. Ghatak, S. (1995) Introduction to Development Economics, Third edition, Routledge: London.
20. Basu, Kaushik (1997) Analytical Development Economics: The Less Developed Economy
Revisited, The MIT Press: London.
21. Thirlwall, A.P. (2003) Growth and Development: With special reference to
Developing countries, Seventh edition, Palgrave Macmillan, UK.
22. Jones, introduction to Economic growth
23. Bardhan, Pranab and Christopher Udry (1999) Development Microeconomics, Oxford
University Press:
24. Deaton, Angus (1997) The Analysis of Household Surveys: A Micro econometric Approach to
Development Policy, the World Bank, the John Hopkins University Press: Baltimore.
25. Dasgupta, Partha (1993) An Enquiry into Well-Being and Destitution, Clarendon Press:
London.
26. World Bank, (1990, 1997, 2001) World development report
Module Name: International Economics
Module Category: Core
Module Code: Econ-M2081
Module Competency: conduct field and empirical investigations to solve practical problems in the area
of international trade and finance.

Description Courses included in the module Remark

International Economics I International Economics II

Couse code Econ Econ

Cr Hrs 3 3

EtCTS 5 5

Pre-requisite Econ 1022 Econ1031

Mode of Delivery Semester Based

Module Description

This module contains two courses; International Economics I and International Economics II.
These courses deal with international trade theories and policy issues and how international
trade is financed. The module aims to provide a highly focused discussion of topics in
international economics in two separate subject areas of International trade and international
finance in the context of developing countries. Issues covered in the module are conventional
and nonconventional trade theories which include the classical model (Smith and
Ricardo), the modern and neoclassical theory of trade (the H-O-S model, the Stolper-
Samuelson Theorem, and The Leontief Paradox), The New Trade Theories and the African
context (Imperfect competition and scale economies), Economic Integration and Theories of
Customs Union, Trade Policies and Developing countries (Import Substitution and Export
Promotion, Trade and Development, the World Trade Organization and Developing Countries,
etc). Besides, the issues of the Balance of Payments (and different approaches to balance of
payments), Exchange rate economics, Open- Economy macroeconomics (IS-LM-BP
framework, the Mundel-Fleming Model), the Evolution of International Financial Institutions
(the IMF, the World Bank etc…), impact of capital flows and the debt crisis in African context
will be covered.
Module Objective
The objective of this module is to:
 Demonstrate understanding of the various effects of trade policy interventions
 Be able to identify those groups that benefit and lose from a move from free to
restricted trade
 Demonstrate how to apply economic reasoning to global policy issues in a critical manner
 Demonstrate knowledge of the current issues in economics, an appreciation of
how economists address international economic issues and be familiar with current
research issues in international economics
 Understand the economic basis behind current policy debates in international economics
 Critically address different policy proposals in addressing issues arising in international
economics
 Deliver coherent argument in written work, including coherent arguments for assessing
complex policy issues in the global economy
 Develop presentation skills in addressing theoretical and empirical issues in international
economics
 Lay a foundation of open Macro International Economics
 Discuss and analyze nation’s international interaction through trade and finance to the
rest of the world.
 Explain approaches and techniques of analyzing trade and finance internationally.

Course Name: International Economics I

Course Code: Econ2081
1. Introduction (3hrs)
1.1. What international Trade?
1.2. Basis of International Trade
1.3. International Trade versus Domestic Trade
2. International trade theories (15 Hrs)
2.1. The Mercantilists’ View on Trade
2.2. The Classical Trade Theories
2.2.1. Trade based on absolute advantage; Adam Smith
2.2.2. Trade based on comparative advantage; David Ricardo
2.2.3. Comparative advantage and opportunity cost
2.2.4. The basis for and gains from trade under constant costs
2.2.5. Misconceptions about comparative advantage
2.2.6. International Equilibrium in Trade: Extension of the Classical Theory
2.2.7. Law of Reciprocal Demand Offer Curve Analysis
2.3. The Neoclassical Trade Theory
2.3.1. The H-O Theorem [Factor-Endowment Theory]
2.3.1.1. Factor -Price Ratio Criterion
2.3.1.2. Factor -Ratio Criterion
 2.3.1.3. General Equilibrium in Trade
2.3.1.4. Criticism of the H-O Theory
2.3.1.5. Empirical Validity of the H-O Theory
2.3.2. The Factor-Price Equalization Theorem
2.3.2.1. Factor Prices Without Foreign Trade
2.3.2.2. Factor Prices With Foreign Trade
2.3.2.3. The Process of Factor Equalization
2.3.2.4. Critical Evaluation of the Factor Price Equalization Theorem
2.4. The New Trade Theories
2.4.1. Tastes as a basis for trade
2.4.2. Product differentiation as a basis for trade
2.4.3. Inter vs Intra-Industry Trade
2.4.4. Imperfect competition as a basis for trade
2.4.5. Trade based on Economies of Scale
2.4.6. Trade based on dynamic technological differences (Posner’s technology
gap model)
2.4.7. Vernon’s product cycle model
3. International Trade and Commercial Policy (12 Hrs)
3.1. Free Trade: Cases For and Against
3.1.1. Cases For Free Trade
3.1.2. Cases Against Free Trade
3.2. Tariffs and Non - Tariff Barriers
3.3. The Infant - Industry Argument for Protection
3.4. Trade Policy and Economic Welfare
3.5. Optimal Trade Policy Intervention
3.6. Trade Liberalization and Issues of Openness
3.7. Import Substitution versus Export Promotion
3.8. Intellectual Property Rights
4. Trade, Growth and Development (6 Hrs)
4.1. Defining Trade Strategy
4.2. Inward - and Outward - Looking strategies
4.3. Trade Strategy and Industrialization
4.4. Trade Strategy and Economic performance
4.5. Country Experiences
5. International Trade Institutions (12 Hrs)
5.1. The General Agreement on Tariffs and Trade (GATT)
5.2. GATT Principles and Exceptions
5.3. Regional Economic Integration (REI)
5.4. The Rationale for REI
5.5. The Forms of Integration
5.6. The Theory of Customs Unions
5.7. Static and Dynamic Effects of REI
5.8. The Experiences of: EAC, ECOWAS, SADC, and COMESA
5.9. The Problems and prospects of the African Union (AU)
5.10. Issues on Globalization: Benefits and Risks
 References
1. Appleyard, D. R. and Field, A. J. (2001), International Economics, 4th ed., Mcgraw-Hill/Irwin,
Boston.
2. Dwivedi, D.N.International Economics (1999), Delhi: Konark Publishers
3. International Economics: Theory and Policy, Fourth Edition, by Paul R. Krugman and Maurice
4. International Trade: Theory and Evidence by Markusen James R. et al (1995), McGrow-Hill Inc.—
covers aspects of international trade only - M&MKM
5. Krugman, Paul. & Obstfeld, Maurice. (2003), International Economics: Theory &Policy. New
York: Addison-Wesley.
6. Mannur, H.G, (1998), International Economics, Vikas publishing house pvt.ltd
Obstfeld, Addison Wesley Longman
7. Pilbeam, K. (1992), International Finance, London: Macmillan.
8. Salvatore, Dominic (1995), International Economics, Prentice Hall International, Inc.
9. Salvatore,D. (1998), International Economics, 6 ed., Printice
10. Salvatore,D. (2001), International Economics, India: republika pvt.ltd
11. Sawer, Charles W. & Sprinkle (2006), International Economics
12. Sodersten, B. & Reed, Geoffrey (1994), International Economics, 3rd edition. London: Macmillan.
13. Sodersten, B. and G. Reed (1994), International Economics, New York: St. Martin's Press.

Course Name: International Economics II

Course code: Econ2082
1. Exchange Rate and The Foreign Exchange Market (5 Hrs)
1.1. The foreign exchange market
1.2. Different concepts of the exchange rate
1.3. Exchange rate regimes, spot versus forward foreign exchange markets
1.4. Hedging , Speculation and arbitraging
1.5. The foreign exchange market versus financial markets.
2. Money, Interest Rate and The Exchange Rate (6 Hrs)
2.1. Brief review of the money market
- (money demand, money supply and interest rates)
2.2. Money and exchange rate in the short run
2.3. Price Levels and Exchange Rates in the Long Run
2.3.1. The law of one price
2.3.2. The absolute purchasing power parity
2.3.3. The relative purchasing power parity
2.3.4. Flexible-price monetary model of exchange rate
3. Balance of Payments and National Income Accounting (8 Hrs)
3.1. National Income Accounting for an open economy
3.2. Term of trade, balance of trade and balance of payments
3.3. Components of balance of payment
3.4. Balance of payment disequilibrium (deficit and surplus in the BOP)
3.5. Correction of disequilibrium
3.6. The links between saving, investment and the current account
4. Theories of The Balance of Payments (5 Hrs)
 4.1. The elasticity approach
4.2. The absorption approach
4.3. The monetary approach
5. Economic Policy in an Open Economy (12 Hrs)
5.1. Brief review of equilibrium in the goods market
5.2. The money market and the balance of payments
5.3. Fiscal and monetary policies under fixed exchange rate regime
5.4. Fiscal and monetary policies under flexible exchange rate regime
6. Prices and Output in an Open Economy (6Hrs)
6.1. Aggregate demand and aggregate supply under fixed exchange rate regime
6.2. Aggregate demand and aggregate supply under flexible exchange rate regime
7. The International Monetary System (IMS)
(6Hrs)
7.1. Evolution of the IMS
7.2. Exchange rate regimes
7.3. The Bretton Woods System
7.4. The current IMS and developing countries
7.5. The external debt problem of developing countries,
7.6. The African Debt Crisis

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment
Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

References
1. Appleyard, D. R. and Field, A. J. (2001), International Economics, 4th ed., Mcgraw-Hill/Irwin,
Boston.
2. Dwivedi, D.N.International Economics (1999), Delhi: Konark Publishers
3. International Economics: Theory and Policy, Fourth Edition, by Paul R. Krugman and Maurice
4. International Trade: Theory and Evidence by Markusen James R. et al (1995), McGrow-Hill Inc.—
covers aspects of international trade only - M&MKM
5. Krugman, Paul. & Obstfeld, Maurice. (2003), International Economics: Theory &Policy. New
York: Addison-Wesley.
6. Mannur, H.G, (1998), International Economics, Vikas publishing house pvt.ltd
Obstfeld, Addison Wesley Longman
7. Pilbeam, K. (1992), International Finance, London: Macmillan.
8. Salvatore, Dominic (1995), International Economics, Prentice Hall International, Inc.
9. Salvatore,D. (1998), International Economics, 6 ed., Printice
10. Salvatore,D. (2001), International Economics, India: republika pvt.ltd
11. Sawer, Charles W. & Sprinkle (2006), International Economics
12. Sodersten, B. & Reed, Geoffrey (1994), International Economics, 3rd edition. London: Macmillan.
13. Sodersten, B. and G. Reed (1994), International Economics, New York: St. Martin's Press.
Module Name: Natural Resource and Environmental Economics
Module Category: Core

Module Code: Econ-M 2091

Module Competency: Give advisory services on labor market and firm related issues.

Description Courses included in the module Remark

Natural Resource and Environmental Economics

Couse code Econ 2091

Cr Hrs 3

EtCTS 5

Pre-requisite Econ1022

Mode of Delivery Semester Based

MODULE DESCRIPTION
The module requires students’ background knowledge of introductory economics, and more of
microeconomics. The theoretical foundations try to elaborate how environment affects (and is affected
by) human activities. The subject is concerned on the relationship between environment and economic
activities; the issue and role of property rights; optimal and sustainable utilization of depletable (non
renewable) and renewable resources; and on the optimal pollution control issues. Since every rational
individual and the society as a whole is concerned on the balance between human activities and
preservation of safe environment for the existing and future generations; the basic question is how to
use those resources in an optimal and sustainable manner. The module aims at enabling the students to
understand such circumstances and be aware of the effects of economic activities on the environment
in policy making processes.

MODULE OBJECTIVES

The broad objective of this module is to introduce students with natural resource and environmental
economics. At the end of the module students are expected to know the following main elements: the
subject matter of resource and environmental economics, market failure and the environment, natural
resource economics, the links between development and environment, environmental policy
instruments to control pollution, and environmental valuation techniques.
More specifically, students will be able to:

 Understand the general relationships between human activities and the environment
 Describe the role of property rights in the resource use and allocation decisions
 Identify the resource categories and their optimal and sustainable use
 Know the optimal pollution control decisions and policy instruments
 Identify the different environmental valuation techniques
 Apply environmental valuation methods on the socioeconomic activities that will have an influence
on the environment (and resources)
 Make rational decisions in utilization of environmental resources and as such, they could take their
part in the activities of solving environmental problems

Course Name: Natural Resource and Environmental Economics

Course Code: Econ-M 2091

Prerequisite: Econ1022

Contents

week Course contents References

Chapter one: Introduction

1 Week 3hours 1.1 Introduction to the subject matter

1.2 Interlinkage between the environment and the economy  Prato T. (pp
55-65 and 73-
1.3 The two views for the prospects in the environment 79)
 Tietenberg T.
(pp 1-20)
Unit Two: some issues on the environment and development

3 9hours 2.1 The environment and emerging development issues

Weeks 2.2 Population growth and the environment  Prato T. (pp
80-87)
2.3 Economic growth and the environment
 Tietenberg T. (
pp 102-125)
2.4 Sustainability and economic policies

Unit Three: Efficiency, property rights, market failure and the environment

3 week 9 hours 3.1. Efficiency, discounting & intergenerational equity  Tietenberg T.

3.2. Property rights (pp 88-100)
3.3. Externalities  Prato T. (pp
3.4. Public goods 91-108)
 3.5. Common property resources  Grafton et al.
3.6. Correcting market failure (pp 36-60)
Unit Four: Natural resources

3 Week 9 hours 4.1 Classification of natural resources  Tietenberg T.

(pp 127-150
4.2 Non renewable resources and 281-305)

4.2-1 Theory of optimal depletion

 Grafton et al.
(pp 93-160
4.2-2 Energy resources and 193-216)

4.2-3 Minerals

4.3 Renewable resources

4.3-1 Biological dimension of fisheries

4.3-2 Theory of optimal use

4.3-3 Forest resources

Unit Five: Economics of pollution control and environmental policy

2 Week 6 hours 5.1 Pollutant taxonomy  Tietenberg T.

(pp 336-363)
5.2 Efficient allocation of pollution
 Grafton et al.
(pp 61-88)
5.3 Environmental policy instruments

5.3-1 Command and control (emission standards)

5.3-2 Emission charges

5.3-3 Transferable emission permits

5.3-4 Liability rules

Unit Six: Valuation and cost-benefit analysis of the environmental resources

2Week 6 hours 6.1 Valuation of the environment  Prato T. (pp

301-328)
6.1-1 Welfare foundations Grafton et al.
(pp 219-273)
6.1-2 Dimensions of value

6.1-3 Valuation methods

6.2 Environmental analysis

 Chapter Seven: International Environmental Issues And Economics Of Climate Changes

2 week 3 hours 7.1. International Environmental Externalities

7.2. International Agreements

7.3. Payments for Ecosystem services (PES)

**NB: This course needs practical observation in a field so that the theoretical concepts verified
through
practical observation. The load for the course is indicated in the load distribution of the
course.

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

REFERENCES:
Grafton R.Q., Adamowicz W., Dupont D., Nelson H., Hill R.J., and Renzetti S., 2004: Economics of the
environment and natural resources; Blackwell Publishing, United Kingdom.
Prato T., 1998: Natural resource and environmental economics, Iowa State University
Press/Ames, United States of America
th
Tietenberg T., 1992: Environmental and natural resource economics, 6 edition; Harper Collins
Publishers
Convery F.J, 1995: Applying environmental economics in Africa; World Bank Technical Paper, No
277, Africa technical series, World Bank , Washington DC.
Hanley N., and Clive L.S., 1993: Cost-benefit analysis and the environment, Edward Elgar.
Leser J.A., Daniel E.D., and Richard Z.J., 1997: Environmental economics and policy, New York, Addison-
Wesley.
Module Name: Labor and Industrial Economics
Module Category: Core

Module Code: Econ-M 3101

Module Competency: give advisory services on labor market and firm related issues.

Description Courses included in the module Remark

Labor economics Economics of Industry

Couse code Econ3101 Econ 3102

Cr Hrs 3 3

EtCTS 4 4

Pre-requisite Econ1022 Econ1022

Mode of Delivery Semester Based

MODULE DESCRIPTION

This module contains two courses; Labour Economics and Economics of Industry. A good
grasp of manpower economics is vital for designing and understanding manpower policies and
more generally for appreciating how a modern economy functions. Industrial Economics is the
study of firms, industries and markets. It looks at firms of all sizes - from local corner shops to
multinational giants and` it considers a whole range of industries, such as textile, electricity
generation, car production and restaurants etc...When analyzing decision making at the levels
of the individual firm and industry, Industrial Economics helps us understand such issues as:

 the levels at which capacity, output and prices are set;

 the extent that products are differentiated from each other;
 how much firms invest in research and development (R&D)
 how and why firms advertise

MODULE OBJECTIVE

At the end of this module, the student will be able to:

 understand the working of labor markets and theories of firms, and their
applications
 Acquainted with basic facts and terminologies about labour market,
 Understand the factors that shape the labour supply and demand,
 Appreciate why the labour market does not function perfectly,
  Able to know how wage is determined in the labour market with different approaches;
 Familiar with the role of government in developing different policies and manpower
planning system.
 Familiar with different theories of firms, and how the firm grows according to different
theories.
 Develop skills to measures of market power/ market performance/ with
empirical work.
 Distinguish different pricing strategies and its effects on the structure
and performance of firms.
 Understand patent protection, research and the rate of technological
advance
 Appreciate and be able to explain industrial policy which comprises the
need for industrialization, state or private control, monopoly and mergers
policy and promoting small industries.

Course Name: Labor economics

COURSE CODE: ECON3101

COURSE CONTENT

Lecture
Week Topic of the lecture Reference materials
(hours)

Chapter One: Introduction

1.1. Labour economics and issues discussed in o Borjas G. (2000), Ch.

labour economics 1, pp 2-7
1Week 3hours 1.2. Labour market and the economy
1.3. Labor economics and it’s evolution
1.4. Labor and its peculiarities as factor
Chapter Two: Labour Supply Theory

2.1. Measurement and the labour force o Borjas G. (2000), Ch.

participation 2, pp 21-60 and 69-98
3Weeks 9 hours 2.2. The Work-Leisure Decision Model o McConnel and Brue
2.3. The Labour Supply Curve (1989), pp. 14-76
2.3.1. Elasticity of Labour Supply o Ehrenberg and Smith
2.4. Extensions of Neoclassical Labour-Leisure (1994), Chs. 6 and 7
Choice Model
2.5. Policy Applications
 Chapter Three: Labour Demand Theory

3.1. The production function o McConnel and Brue

3.2. The Demand for Labour in the Short-Run (1989), Ch. 5 pp. 118-
2Weeks 6hours 3.3. The Demand for Labour in the Long-Run 155
3.4. Elasticity of Labour Demand o Borjas G. (2000), Ch.
3.5. Elasticity of Factor Substitution 4, pp 104-155
3.6. Employment Policy o Ehrenberg and Smith
(1994), Chs. 3
Chapter Four: Wage Determination

4.1. Wage Determination and Resource Allocation o McConnel and Brue

4.1.1. A perfectly Competitive Labour Market (1989), Ch. 6, pp. 155-
3Weeks 9hours 4.1.2. Monopoly in the Product Market 183, Ch. 7, pp 192-
212, Ch. 13, pp 374-
4.1.3. Monopsony
382
4.2. Alternative Pay Package o Borjas G. (2000), Ch.
4.3. Critiques of Conventional Wage Theories 5, pp 159-166 and
4.4. Minimum Wage Theory 185-198
o Ehrenberg and Smith
4.4.1. The Competitive Model
(1994), Chs. 8,12,15
4.4.2. The Monopsony Model
4.5. Labour Union and Labour Market
4.5.1. Constraints in the achievement of
union’s objectives
4.5.2. The effect of unions on wages and
unemployment
Chapter Five: Labour Markets

6hours 5.1. Basic Concepts of Labour Markets o McConnel and Brue

5.2. Theory of Labour Markets (1989), Ch. 16, pp.
2Weeks 5.3. Internal and External Labour Markets 449-460
5.4. Segmentation Theory o Ehrenberg and Smith
5.5. The Workings of Urban Labour Markets in (1994), Chs. 1
Developing Economies
Chapter Six: Manpower planning

6.1. The Basic Model of Human Capital o Borjas G. (2000), Ch.

6.2. The Wage-Gap among Workers 5, pp 227-271
2Weeks 6hours 6.3. On the Job Training
6.4. Manpower Planning Techniques
Chapter Seven: Labour Policy
 7.1. The Role of Government in the Labour Market o Bellante and Jackson
7.2. Job Security (1983), Ch. 15
2Weeks 6hours 7.3. Occupational Licensing
7.4. Income Policy
7.5. Labour Market Legislation
Chapter Eight: Employment Problems of LDCs

8.1. The Employment Challenges in LDCs o Galenson (ed.) (1971)

8.2. Employment Policy and Strategy of
2Weeks 6 hours
Developing Countries with Particular
Reference to Ethiopia

REQUIRED REFERENCES:
1. *George J. Borjas (2000), Labor Economics, Second Edi tion, McGraw-Hill.
2. *Ronald G. Ehrenberg and Robert S. Smith (1994), Modern Labor Economics: Theory and Public
Policy, Fifth Edition, Harper Collins.
3. *Campbell R. McConnel and Stanly L. Brue (1989), Contemporary Labor Economics, McGraw-
Hill.
4. G.W. Taylor and F.C. Pierson (1981), New Concepts in Wage Determination.
As an additional material, lecture note and problems will be given during class; some copies,
handouts, and review question will be distributed additionally as required.

5. P.Bairoch (1973), Urban Unemployment in Developing Countries, ILO

6. Richard Jolly and C. Coclough (1972), “African Manpower Plans: an Evaluation”. International
Labor Review, Vol. 106
7. S. Kannapan (1977), Studies of Urban Labor Market Behavior in Developing Countries, ILO
8. Bruce E. Kaufman and Julie L. Hotchkiss (2003), The Economics of Labor Markets, Sixth
Edition, Thomson South-Western.
9. OECD (undated), Manpower Planning Approach, memo.
10. Lioyd G. Reynolds, Stanley H, Masters, and Colletta H. Moser (1991), Labor Economics and Labor
Relations, Tenth Edition, Prentice-Hall.
11. Guy Standing and Victor Tokmna (1989), Towards Soci al Adjustment: Labor Market Issues in
Structural Adjustment, ILO.
12. Tesfaye Teklu (1976), “The Implication of Manpower Approaches to Educational Planning in
Ethiopia”
COURSE NAME: ECONOMICS OF INDUSTRY
COURSE CODE: ECON3102
PREREQUISITE: ECON 1022

Lecture (hrs) Topics of the title Reference material

Week
Chapter One: Introduction

1.1. Definition Barthwal , Chapters.

1Week 1.2. Approaches to Industrial Economics 1, page 2-6, chapter 4
3Hours 1.2.1.The structure –conduct-performance paradigm page 49-70
1.2.2. The Chicago school of Thought Barthwal , chapter 4,
page 49-70, and
1.2.3. Institutional Economics
Carlton, D.W. and J.M.
Perloff, Chapters. 1§
9 page 2 -10, 331-369

Chapter Two: The Theory of the Firms

2.1. The Life Cycle of Firm Barthwal , Chapters.

3Week 3, page 27-47
9 Hours 2.2. Modern Theories of Firm

2.2.1. Managerial Theory of Firm

2.2.2. Principal Agent Theory

2.2.3. Transaction Cost Theory

2.3. The Growth of Firm Barthwal , Chapters.

15, page 343-359
2.3.1. Downie’s Theory

2.3.2. Penrose’s Theory

2.3.3. Mari’s Theory

Chapter Three: Market Concentration

 9hours 3.1. Nature of Concentration
3weeks
3.2. Theory of Concentration

3.3. Measures of Concentration

3.3.1. Concentration Ratio

3.3.2. The Hirschman-Herfindahi Index

3.3.3. The Entropy Index

3.3.4. The Dispersion method

3.3.5 The Learner Index

3.3.6. The determinants of concentration

Chapter Four: Industrial Location Analysis

4.1. Determinants of Industrial Location R.R.Barthwal

1 week 4.2. Approaches to Industrial Location Analysis Page.No.361-380
3 hours

Chapter Five: Analysis of Firm Structure

6 hours 5.1. Organization, Structure, Ownership and control of R.stead,P.Curwen

2 week Firm and K.Lawler
5.2. Goal and Objective of Firm Page No.64-81
5.3. Legal Forms of Business
5.4. Structure conduct performance
5.5. Measurement of Market Performance and Market
Structure.
Chapter Six: Diversification, Integration and Merger

6.1. Vertical Integration and Vertical Restrictions R.R.Barthwal

3 week 6.2. Vertical Relationship as a solution to Economic Page.No.169-187
9 hours Problems
6.3. The reasons for and against vertical Integration
6.4. Merger and Takeover (Motives for Merger)
6.5. The effects of Merger on Competition and Welfare
Chapter Seven: Advertisement

7.1. Information and Advertisement Dr.

1 week 7.2. The Social benefit and cost of Advertising. K.G.GUPTA(Business
3 hours Economics)
Page.No.B51-B64
 Chapter Eight: Technological Progress

8.1. Stages of Technological change R.R.Barthwal

1 week 8.2. Invention, Innovation and Diffusion Page.No188-210
3 hours

Chapter Nine: Industrial policy

9.1. Government Intervention

1 week 9.2. Review of Focuses of the Ethiopian Industrial Policy
3 hours

**NB: This course needs practical observation in a field so that the theoretical concepts verified through
practical observation. The load for the course is indicated in the load distribution of the course.

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%
REFERENCES

Core Text

 Barthwal, R.R Industrial Economics: An Introductory Text book, Wiley Eastern Limited, New Delhi
1984
 Carlton, D.W. and J.M. Perloff, Modern Industrial Organization. 1990.
Additional Reading Materials

1. Barthwal, R.R Industrial Economics: An Introductory Text book, Wiley Eastern Limited, New Delhi
1984.
2. Clarke, R. Industrial Economics, Basil Blackwell, 1985.
3. Carlton, D.W. and J.M. Perloff, Modern Industrial Organization. 1990.
4. Ferguson, P.R. and G.J. Ferguson. Industrial economics: Issues and perspectives, 1994.
5. Hay, A. Donald and Derek, K. Morris; Industrial Economics and Organisation; Theory and
Evidence (2nd ed); Oxford University press. 1991
6. Jacobson, D. and B. Andreosso-o  Collaghan. Industrial Economics and Organization: A European
Perspective. Mc Graw-Hill. 1996.
7. Kreps, D.M. Game Theory and Economic Modeling, Clarendon Press, 1990.
8. Martin, S. Industrial economics: Economic Analysis and Public Policy, Macmillan Publishing
Company, 1988.
9. Scherer, F.M. and D. Rosss, Industrial Market Structure and Economic Performance, 1990.
10. Shughar, William F. The organization of Industry, BPI/IR WIN, 1990.
11. Stead, R;P. Curwen and K. Lawler; Industrial Economics: Theory, Applications and Policy;
McGraw-Hill; 1996.
12. Stigler, GJ. The Organization of Industry, University of Chicago, 1968.
13. Stiglitz J.E. Principles of Microeconomics, Norton and company, 1997.
14. Tirole, J. The Theory of Industrial Organisation, MIT Press, 1997.
Module Name: Economics of Agriculture & Rural Development
Module Category: Core
Module Code: Econ-M3111
Module Competency: Formulate agricultural policies based on theories and evaluate the effectiveness
of these policies

Description Courses included in the module Remark

Economics of Agriculture Rural development

Couse code Econ Econ

Cr Hrs 3 3

EtCTS 4 4

Pre-requisite Econ1021 Econ3111

Mode of Delivery Semester Based

Module Description
This module contains two courses: Economics of Agriculture and Agriculture & Rural
development. The first part of the module, Economics of Agriculture, deals with basic concepts
underlying peasant characteristics, peasant production economics, theories of optimization and
individual and household decision-making process, agricultural marketing and financing,
models of agricultural development, and policies for solving the problems of agricultural and
rural development in poor countries of the world. The second part of the module,
Agriculture and Rural development will consider the process of rural development from both
theoretical and practical point of view. Theories related to definition of rural development, to
measurement of rural development and to new institutional economics approach to rural
development will be covered in this course. Moreover the application of such theories will be
analyzed from the perspective of Indian and Ethiopian experience. Finally, the rural
development policy and strategy of Ethiopia will be examined from both theoretical and
practical point of view.

Module Objective
The objective the module is
to
 Provide students with an exposure to the major problems, theories, models and policies
of agricultural development.
 Acquaint students with preliminary knowledge of economic principles of
agricultural production in developing countries.
 Enable students to clearly examine the rural development policy of the country and
propose
possible and innovative solutions to challenges that could be faced in the process.
 Introduce students with peasant risk aversion and mitigation mechanisms under
conditions of uncertainty
 Acquaint students with agricultural optimization techniques and decision making
 Enable students acquire the knowledge and practices of agricultural marketing,
financing and production programing and forecasting approaches.
 Acquaint students with theories and models of rural development
 help students understand the role and contributions of rural institutions

Course Name: Economics of Agriculture

Course Code: Econ3111
Introduction (3 Hrs)
1.1 Definition and scope of economics of agriculture
1.2 Historical development of agriculture
1.2 Role of agriculture in economic development
1.3 Interdependence of agriculture and industry
1. Economics of Agricultural Development (10 Hrs)
2.1 Structure of Agricultural System in Developing and Developed World
2.2. Stages of agricultural transformation
 The need for agricultural transformation
 Peasant characteristics: Subsistence farming: risk, uncertainty and survival
 Mixed farming
 Modern commercial farming
2.3. Conditions for agricultural development
 Technology and innovation
 Conducive institutional and pricing policies
 Education
3. Producer Decision making (9 Hrs)
3.1 Production with single variable input
 The production function
 Physical Input-output relationship
 Value input-output relationship
3.2 Production with two variable inputs
 The production function
 Input-input relationship
 Least cost combination of inputs
 Product-product relationship and enterprise selection
4. Agricultural marketing (6 Hrs)
 4.1.marketing characteristics
4.2.Functions of agricultural marketing
4.3. marketing agents and enterprises
4.4.Integration and diversification of marketing
4.5.Transaction costs and marketing efficiency
5. Agricultural Finance (6 Hrs)
5.1.Sources of agricultural finance
5.2.Credit Worthiness Analysis
5.3.Loan repayment Plans
5.4.The old and new agricultural credit policies
6. Uncertainty and farm Decision making (5 Hrs)
6.1. Sources of Uncertainty
6.2. Decision Making under Uncertainty
6.3. Mechanisms of Mitigating risk and uncertainty
 Risk-averse peasant
 Drudgery-averse peasant
 The Sharecropping peasant
7. Farm Decision Making Methods (9 Hrs)
7.1 Farm Budgeting
7.2 Linear Programming
7.3. Farm Management Simulation
7.4. Farm Strategy Decisions
 Planning Stages
 Cropping and Livestock Decisions
 Farm Size

REFERENCES:
1. Gail L.C, C.W. Jensen and Douglas D. 1997. Agricultural Economics and Agribusiness.
th
7 Edition
2. Harold G. Halcrow. 1984. Agricultural Policy Analysis.
3. Holmberg, J. 1992. Making Development Sustainable. International Institute for
Environment and Development
4. Rao, P.K. 2000. Sustainable Development. Economics and Policy. Black well publishers
Inc.
5. Reports on the Ethiopian Economy. Ethiopian Economic Association (Different
Volumes)
6. Thirlwall, A. P. 2003. Growth and Development: With special Reference to Developing
th
Countries, 7 Ed. Pal grave: McMillan.
th
7. Todaro, M.P. and S.C. Smith 2003. Economic Development, 8 Edition.
Pearson: Addison Wesley.
 8. Todaro, P.T. 1992. Economics for Development world: An Introduction to Principles,
Problems and Policies for Development, Long man.
9. Workneh Negatu, Legese Dadi and Abebe Haile Gebriel (eds) 2003. Agricultural Policy
in Ethiopia's Economic Development: Scope, Issues and Prospects. Proceedings of the
th
6 Annual Conference of the Agricultural Economics Society of Ethiopia, 30-31
August,
2002, Addis Ababa, Ethiopia.

Course Name: Rural development

Course Code: Econ3112

1. Introduction (6 Hrs)
1.1. Concept of rural development.
1.2. Socio-economic and Cultural Factors in Rural Development
1.2.1. Population and Development
1.2.2. Gender and Development
1.3. Elements of rural development
1.3.1. From basic need dimension
1.3.2. From economic welfare dimension
1.3.3. From capability dimension
1.4. The Role of Agricultural Research and Extension in Rural Development
2. Institutions for Rural Development (12 Hrs)
2.1. Definition and concepts of institution
2.2. Demand and supply of institutions
2.3. Market as institution and rural development
2.4. Review of market outcome under its restricted assumptions
2.5. Institutions to deal with market failure
2.5.1. The need for government intervention in agriculture and rural development
2.6. Market and State failures
2.6.1. Traditional market failures
2.6.2. Market failures related to imperfect information and missing markets
2.7. State as complementary institution to market
2.8. The role of state in rural and agricultural development
2.9. State failure to coordinate rural development
2.10. Institutional innovation to deal with market and state failure in rural development
2.10.1. Institutions to deal with market failure in rural development
2.10.2. Institutions to deal with state failure in rural development
2.10.3. Local institutional capital and community development
2.11. The institution of property right
3. Theories, models and approaches to rural development (14 Hrs)
3.1. Lewis’s model of development with unlimited supply of labor
 3.2. Human capital centered development theories
3.3. Uni modal theory (approach)
3.4. Bi modal theory (approach)
3.5. Integrated rural development
3.6. Models of Agricultural Development
3.6.1. The frontier model
3.6.2. The conservation model
3.6.3. The urban industrial impact model
3.6.4. The diffusion model
3.6.5. The high pay off input model
3.6.6. The Indian green revolution experience
4. Strategies and polices of agricultural and rural development (9 Hrs)
4.1. Strategies of agricultural and rural development
4.1.1. Growth oriented
4.1.2. Welfare Oriented
4.1.3. Responsive strategies
4.1.4. Holistic
4.1.5. Integrated strategies
4.2. Polices of agricultural and rural development
4.2.1. Agricultural price policy
4.2.2. Input policy
4.2.3. Marketing policy
4.2.4. Credit policy
4.2.5. Land tenure policy
4.2.6. Food security policy
5. The Rural Development policies and strategy of Ethiopia (7 Hrs)
5.1. Goals of the rural development policy
5.2. ADLI within uni modal approach and reflection on it
5.3. Policy with in agriculture
5.3.1. Land policy
5.3.2. Labor policy
5.3.3. Policy on technology
5.3.4. Settlement policy
5.3.5. Integrated approach to rural development
5.3.6. Reflection on agricultural policy
5.3.7. Marketing policy and reflection on it
5.3.8. Policies on NGO’s and community development, and reflection on it
Module Delivery Methods
The delivery method shall be student-centered. Students are highly expected to participate
in class works at the middle and end of each session and in group discussions inside and
outside of the class. Specifically the course will be delivered through the following methods:

 Lecture Method
 In-class problem solving
 Group Work
 Assignment
Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

References:

Text Books (there are no specific text book for this course. So these are books which are
used often in the course):

1 Katar Singh (1999), Rural Development: Principles, Policies and Management , 2nd Ed. Saga
Publications, New Delhi
2 Frank Ellis (1992) agricultural po licies in developing countries, Cambridge University
Press, Cambridge
3 Yujiro Hayami, (1997) Development econo mics: From poverty to wealth of
nations, Clarendon Press, Oxford
4 Hendrik Van Den Berg (2001), Economic Growth and Development, McGraw – Hill Higher
Education
5 Michael P.Todaro (2000), Economic Development , Addison-Wesley, Amsterdam.
6 Meier, Gerald (1995), Leading issues in Economic development, Sixth edition, Oxford
Univeristy press Oxford - New York
Additional readings

All development books are your additional reference but the following books will be very
use full in specific chapters

1 Gopal Lal Jain (1997), Rural Development, Mangal Deep Publications Jaipur India.
th
2 Tom Tietenberg (2003), Environmental and natural resource econo mics, 6 ed., Pearson
Education Inc.
3 Joseph E. Stiglitz (2001) “information and change in paradigm in economics”, Nobel
prize lecture, December 8, 2001
4 Addisalem Belema (2003), Economic development and demo cracy in Ethiopia,
Dissertation in Erasmus University, Rotterdam
5 Todaro, Chaelp (2000), Economic Development, fifth edition, Pearson education Limited
Edinburgh Gate, Harlow –England
6 Hayami, Yujiro (1997), Development Economics, Oxford University press, Oxford - New
York
Module Name: Monetary Economics and public finance
Module Category: Core
Module Code: Econ-M3121
Module Competency: Engage in analysis of monetary and fiscal policy issues
Description Courses included in the module Remark
Monetary Economics Public finance
Couse code Econ 3121 Econ 3122
Cr Hrs 3 3
EtCTS 5 5
Pre-requisite Econ 1032
Mode of Delivery Semester Based

Module Description: Monetary and public finance module deals with the financial aspects
of the government and the possible role of the state in a market economy. This module has two
courses i.e monetary economics and public finance economics. The module acquaints students
with various concepts, theories and realities of public finance and monetary economics.
Module Objective
 To understand evolution of money in the historical context
 To explain the existence and economic role of Bank and non-Bank Financial institutions
 To demonstrate the money supply process, monetary base, the determinants of money
supply, how the behaviour of the general public and the banking affect the
money creation process
 To demonstrate theories of Money, money demand and its determinants,
 To enable students to understand and assess policy issues in public finance.
 To make students aware of the different schools of thought in public finance.
 To enable students to understand and to assess 'cost benefit' analyses of public
expenditure programmes.
Chapter 1: Money and Monetary Theory (5hrs)

1.1. Meaning and functions of

money

1.2. Measurement of money

1.3. Evolution of the payment

system

1.4. Monetary theory

Chapter 2: An overview of the Financial System and Interest Rates (7Hrs)

2.1. Functions and structures of Financial Markets

2.2 Financial Instruments

2.3. Financial intermediaries

2.4. Interest rates and their measurement

Chapter 3: The demand for Money and other assets (9hrs)

3.1. Quantity theory of money

3.2. Liquidity preference theory

3.3. Post Keynesians developments in monetary theory

3.4. Friedman’s modern quantity theory of money

3.5. Empirical evidence on demand for money

Chapter 4: the Money supply Process (12hrs)

4.1. Players in the Money Supply Process

4.2. Central Bank Balance Sheet and Control of the Monetary base
4.3. Multiple Deposit Creation
4.4. Monetary Supply Model and Money Multiplier
5.5. Over view of the Money Supply Process
Chapter 5: Central Banking and Monetary Policy (9hrs)

5.1. Functions, Structure and Independence of Central Banks

5.2. Tools of Monetary Policy

5.3. Conduct of Monetary Policy

5.4. Goals of Monetary Policy

5.5 Central Bank Strategy

5.6 Monetary targeting and Empirical Evidence

5.7. Transmission Mechanism of Monetary Policy

Chapter 6: Monetary Policy in Ethiopia (6hrs)

6.1 Powers and Functions of the National Bank of
Ethiopia
6.2 Conduct of Monetary Policy in
Ethiopia

public finance deals with the financial aspects of the government and the possible role of
the state in a market economy through the use of lecture, directed reading and term paper
(seminar) preparation and presentation. The general objective of the course is to acquaint
students with various concepts, theories and realities of public finance such as the rationale for
state in the economy, the sources and types of revenue for the public, taxing system and types
of taxes, characteristics of an efficient taxing system, criteria for evaluating public expenditure,
theories of public expenditure and its impact on the economy, significance , objective and
types of public budget, deficit financing and its various means, and some relevant public
finance issues in the Ethiopian context.

Course Title: Public Finance

Course Code: Econ3122

Contents

1. Nature and Scope of Public Finance (3Hrs)

1.1. Definition of Public Finance

1.2. Scope of Public Finance

1.3. Public Finance and Private Finance

1.4. Significance of Public Finance

1.4.1. Economic Significance

1.4.2. Social Significance

1.5. Economic Rationale of a Modern State

Chapter Two

2. Welfare Economics and Public Finance (5Hrs)

2.1. The Efficiency of Competitive Markets

2.2. A Brief Review of Welfare Economics

2.3. Perfect Competition and Pareto Optimality

 2.4. Perfect Competition and General Economic Efficiency

2.5. Market Failure, Externalities and Public Goods

2.5.1. Externalities and market failure

2.5.2. Public goods and market failure

Chapter Three

3. Public Revenue (10Hrs)

3.1. Sources of Public Income

3.1.1. Income based on compulsion

3.1.2. Income by way of voluntary payment

3.1.3. Income: partly compulsory, partly voluntary

3.2. The Ratio, Bouncy and Elasticity of Taxation

3.2.1. Tax ratio

3.2.2. The base of a tax

3.2.3. Bouncy and elasticity of a tax

3.3. Adam Smith’s Canon of Taxation

3.4. Features of Sound Taxation

3.4.1. Equity in the distribution of tax burden

3.4.2. Productivity

3.4.3. Rights of taxpayers

3.4.4. The tax system and the economy

3.5. The Benefit Principle of Taxation

3.5.1. Merits of benefit principle

3.5.2. Demerits of benefit principle

3.6. Ability Principle of Taxation

3.6.1. Justification of ability approach

 3.6.2. Index of ability to pay

3.6.3. Ability to pay and equality of sacrifice

3.7. Rate Schedules of Taxation

3.8. Direct and Indirect Taxes

3.8.1. Direct and indirect taxes: a comparison

3.8.2. The case of direct taxes

3.8.3. The case of indirect taxes

3.9. Superiority of Indirect Taxes Over Direct Taxes

3.10. Impact, Shifting and Incidence of Tax

3.10.1 Theories of tax shifting

3.10.2. Forward and backward shifting

3.10.3. Factors influencing shifting and incidence

Chapter Four

4. Public Expenditure (9Hrs)

4.1. Causes of Growth in Public expenditure

4.2. Public expenditure: Canons, Theories and Accountability

4.2.1. Canon of public expenditure

4.2.2. Theories of public expenditure

4.2.3. Control and Accountability of Public Expenditure

4.3. Effects of Public Expenditure of Production and Distribution

4.3.1. Effects on production and employment

4.3.2. Effects on distribution and income

4.4. Public Expenditure and Control of Inflation

4.5. Content of Development Expenditure

Chapter Five
5. Public Budget (9Hrs)

5.1. Meaning of Public Budget

5.2. Importance of Public Budget

5.3. Principles of Budgeting

5.4. Objectives of Budgeting

5.5. Types of Budgeting

5.6. Procedures of Budgeting

5.7. Theories of Government Budgeting

5.8. Performance and Program Budgeting system (PPBS)

5.9. Zero-Base Budgeting

5.10. Budget as an Instrument of Economic Policy

5.11. Economic Role of the government (Ethiopian Case)

5.12. Structure of government Budget

5.13. Government Expenditure Budget

5.14. Budgetary Deficit Financing

6. PUBLIC DEBT(5Hrs)
6.1 Nature and Kinds of Public Debt
6.2 Effects of Public Debt
6.3 Burden of Public Debt
6.4 Redemption of Public Debt
6.5 Public Debt in a Developing Economy

7. DEFICIT FINANCING (5Hrs)

7.1 Meaning of Deficit Financing

7.2 Objectives of Deficit Financing
7.3 Effects of Deficit Financing
7.4 Limits to Deficit Financing

*8. FISCAL POLICY(2Hrs)

8.1 Meaning of Fiscal Policy
8.2 Objectives of Fiscal Policy
8.3 Compensatory Fiscal
Policy
8.4 Discretionary Fiscal
Policy

*9. FEDERAL-STATE FINANCIAL RELATIONS IN ETHIOPIA (3Hrs)

9.1 Provisions under the Constitution of
Ethiopia
9.2 Federal Power of Taxation in
Ethiopia
9.3 State Power of Taxation in
Ethiopia
9.4 Concurrent Power of Taxation in
Ethiopia

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

References
Atkinson, Anthony B. and Joseph E.Stiglitz.1980. Lecture on public econo mics McGraw-Hill
books Co-.;
Bailey, Stephen J. 1995. Public sector Economics: Theory, policy and practice
Macmillan Press Ltd.’London.
Baker,Samuel & Catherine Elliot (eds.) 1990. Readings in public sector Economics
. D.C.Health and Co: Lexington.
Boadway.Robin W. 1979.Public sector Economics. Wintrop Publisher: Cambridge.
Brown .C.V. and P.M. Jackson, 1990.Pulic sector Economics, 4th edition.
Blackwell:
Oxford.
Browning ,E.K. and J.M. Browning ,1987 Public finance and the price system 3red
 Edition . Macmillan publishing Co.: New York.
nd
Cullis John ,& Philip Jones 1998. Public finance and public cho ice .2
edition. Oxford University Press;Oxford.
Easterly ,William , et al (eds.),1994. Public sector Deficits and macroeconomic
performance, Oxford University Press : Oxford. Jha Raghbendra ,1998 Modern Public
economics Rout ledge : London
Musgrave ,R.A and Peggy Musgrave ,1982. Public Finance in theory and pract ice, 3rd edition
McGraw-Hill: London.
rd
Stiglitz,J.E. 2000.Economics of the public sector ,3 edition .W.W. Norton & co.: New
York .
Any other relevant books on the course may serve the purpose.

Areas for term paper**

1. Arguments for and against state intervention in the economy

2. Fiscal federalism
3. Powers of state and federal governments on tax
4. Types of tax in Ethiopia
5. Means of deficit financing in Ethiopia
6. Fiscal policy:
7. Value added tax(VAT):
8. A brief review of government budget in Ethiopia(19..
9. Domestic versus external sources of revenue of the government of Ethiopia
10. Impacts of deficit financing on key macroeconomic variables: inflation,
unemployment, private investment, economic growth
11. Capital versus recurrent expenditures in Ethiopia
12. Theories of public expenditure
13. Theories of public budgeting
14. Federal versus state power of taxation in Ethiopia
15. Fiscal policy and its implementation in Ethiopia
16. Structure of public debt in Ethiopia
17. Effects of public debt on the economy

** In each chapter students are expected to prepare and present a term paper on the above
selected issues.
Module Name: Economics of Planning and Project Analysis
Module Category: Core
Module Code: Econ-M3131
Module Competency: Plan, monitor and evaluate development projects
Description Courses included in the module Remark
Development planning Development planning and
and project analysis I project analysis II
Couse code Econ 3131 Econ 3132
Cr Hrs 3 3
EtCTS 4 5
Pre-requisite Econ2072 Econ 3131
Mode of Delivery Semester Based

Course Description
The course is organized into four Chapters. The first chapter is devoted to the introductory
parts of planning while the second chapter deals with the meaning, characteristics and types of
planning. The third chapter builds on quantitative development planning techniques. The last
chapter deals with planning in practice by taking experiences from Ethiopia and other
countries.

Course Objective
Planning is seen as an essential ingredient for rapid development in developing countries like
Ethiopia. It is an integral part of their economic systems. Despite, its world wide popularity, it
is a much debated and controversial subject. The purpose of this course is to create an
understanding of the concept of planning and the tools that are used in practice. The substance
of planning would be taken up in different parts focusing on principles, techniques and
practice. The following are the main topics to be covered in this course.

Course Title: Development planning and project analysis I

Course Code: Econ-M3131
Week Lecture Topic of the Lecture Reference
Hours Materials

Chapter-1 Development Planning: An introduction

Week 12 1.1 Historical Background of economic Planning, - Shahidur R.,
1&2 Projection, plans, and forecasting, Gayatri b.,
1.2 The meaning of economic plan, and Hussain
 1.3 The Need for economic plan, A
1.4 Shortcomings of planning, - UNIDO,
1.5 Problems of Planning, (1972)
1.6 Implications of various economic controls in - Lecture
planned economy Notes
Chapter- 2 Classification of Planning: Meaning, Characteristics of different types
of planning and their relative merits and demerits
Week 12 2.1 Planning by Direction and planning by - Shahidur R.,
3&4 Inducement. Gayatri b.,
2.2 Short term, Medium term and Long and Hussain
term planning, A
2.3 Fixed and rolling Planning, - Lecture
2.4 Democratic and Totalitarian (Authoritarian) Notes
planning,
2.5 Anti-cyclical and Development Planning,
2.6 Physical planning V/s financial planning,
2.7 Centralized and Decentralized planning.
Chapter – 3 Quantitative development planning techniques:
Week 18 3.1.Choice of planning techniques – pro and cones - Shahidur R.,
5&6 of labor and capital Intensive techniques Gayatri b.,
3.2.Appropriate technique for developing countries. and Hussain
3.3.An overview of the characteristics of A
development planning Models. - Lecture
3.4.Growth Models - Review of Models in Notes
Development Economics
3.5.Planning Models – Two-Gap Model, Social
Accounting Matrix {SAM} and Linear Planning
Model
Chapter-4 Planning in Practice: Experiences from Ethiopian and other countries.
4 Planning in Practice: Experiences from Ethiopian and -
other countries.
Course Title: Development planning and project analysis
I
Course Code: Econ-M3132

Course Description
This course focuses on project implementation, monitoring and evaluation. The subject matter
of project analysis is outreaching beyond the Cost-Benefit analysis. This time government and
non- government organization are highly demanding experts with a knowledge of monitoring
and impact evaluations. The course is organized into five major chapters. The first chapter is
devoted to the basic concepts and cycles of a project. The second chapter deals with financial
analysis and appraisal of projects. The third chapter builds on the economic analysis of the
project. Chapters four and five discuss the concepts of project monitoring and evaluation.

Course Objective
The purpose of the course is to outline and present the general framework and the basic
methodology for monitoring and impact evaluations for different interventions. The course is
intended to introduce basic monitoring and impact evaluation theories and methodologies.
Once students have a good grasp of the theory and methodologies, they will be in a position to
monitor and evaluate intervention made by government and non-government organizations.

Week Lecture Topic of the Lecture Reference Materials

Hours

Chapter I: Basic Concepts

Week 12 1. Introduction - Gittenger
1 &2 1.1 The Project concept - Chandra
- Definition of Project - Lecture Notes
- Basic characteristics of a project
- Classification of project
1.2 The project Cycle
- Identification
- Preparation and Analysis
- Aspects of project analysis
- Appraisal
 - Implementation
- Evaluation
Chapter II: Financial Analysis and Appraisal of Projects

Week 16 2.1. Scope and Rationale - Gittenger

3&4 2.2. Identification of Costs and Benefits - Chandra
2.3. Classification of Costs and Benefits - Lecture Notes
2.4. The valuation of financial costs and benefits
2.5. Investment Profitability Analysis
- Non-discounted measures of project worth
- Discounted measures of project worth
2.6 Sensitivity analysis

Chapter III: ECONOMIC ANALYSIS OF PROJECTS

Week 20 3.1. An overview of economic analysis - Gittenger

5 to 7 3.2. Identification costs and benefits of - Chandra
economic analysis - Lecture
3.2.1. Sunk cost Notes
3.2.2. Transfer payments, externalities and others
3.3. Determining economic values
3.3.1. Adjustment for transfer payments
3.3.2. Shadow pricing
3.3.3. Traded and Non-traded commodities
3.3.4. Valuation of Traded and Non-traded
commodities
3.3.5. Border parity pricing
3.3.6. National parameters and standard conversion
factor
3.4. Social cost benefit analysis
3.5. Cost effectiveness
3.5.1. Cost effectiveness measures
 3.5.2. Weighted cost effectiveness measures

Chapter-IV Project Implementation, Monitoring and Evaluation

Week 8 Introduction: Monitoring and Evaluation Some - Shahidur R.,
1&2 Basics Gayatri b.,
1.1 What is Monitoring and Evaluation and Hussain
1.2 Why monitoring and Evaluation A
1.3 Kinds of Monitoring and Evaluation - UNIDO,
1.4 Procedures in Monitoring and Evaluation (1972)
- Lecture
Notes
Chapter- V Evaluation: Some Basics of impact evaluation

Week 14 2.1. Impact assessment basics - Shahidur R.,

3&4 - Qualitative versus quantitative impact Assessments Gayatri b.,
- Quantitative Impact Assessment: Ex post versus and Hussain
Ex ante Impact Evaluation A
2.2 Methodologies in impact evaluation - Lecture
- Randomized evaluations Notes
- Matching Methods- Propensity score matching
(PSM)
- Impact Evaluation with STATA

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment
Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%

Module Name: History of Economic Thought

Module Category: Core
Module Code: Econ-M3141
Module Competency: Fostering the advancement of the economics disciplines through
different economic views.

Description Courses included in the module Remark

History of Economic History of Economic

Thought I Thought II

Couse code Econ Econ

Cr Hrs 3 3

EtCTS 5 5

Pre-requisite Econ3141

Mode of Delivery Semester Based

Module Description
The module, History of Economic Thought is organized in to two parts: History of
Economic
Thought I and History of Economic Thought II. The course History of Economic Thought I
provide students with a general picture of the development of economics until the emergence
of classical economics, socialism and marginal revolution. The course demonstrates the
contributions of pre-classical thinking, classical thinkers and deviant thinkers from classicism
in shaping contemporary economic thought. Critical analysis of preceding schools of
thought,
beginning from economic ideas of the ancient philosophers up to more recent ones, which help
students in developing broader understanding of contemporary economic theories, which is the
focus of the second part of the module. That is, as a continuation of the first, History
of Economic Thought II mainly deals with economic theories and School of thoughts that have
developed after Classical School of thought. Hence, this course is mainly about the
major families of thought namely Neoclassical, Institutional school and the other non-Marxian
heterodox economic thoughts, Keynesian school, their ramifications and their most recent
reformulations, and reinterpretations.

Module Objective

The main objective of this module is to provide students with a broader understanding
of contemporary economic theories through a critical analysis of the main succeeding schools
of thought beginning with the economic ideas of the ancient philosophers to those of
recent economic thinkers. The specific objectives are:

 To acquaint students with the creation and evolution of alternative school of economic
thought
 To investigate the technological, ideological, and social forces that has influenced
these schools of thought and the associated theories that were used to explain and
analyzed particular choices.
 To encourage the discussion and study of how the rapidly changing events will alter
society's (and the student's) perspective about economic relationships. What new
economic theories will these altered perspectives encourage?

 To consider the impacts that alternative schools of thought have had on" main stream"
economics
 To Encourage the discussion and create brain storming environmental for students to
forward their reflection freely
 To encourage students to question them selves, to pose economic issues and be able to
examine, synthesis them.
 To encourage students to ask themselves the questions:
o "What do I know?"
o "How do I know?"
o "What do I believe?” and
o "Why do I believe it?"
o "Why did economic philosophers develop different economic theories
and principles?" What were the pushing factors behind?"
Course Name: History of Economic Thought I

Course Code: Econ3141

1. Introduction
1.1. Defining history of Economic thought
1.2. The interaction between Economic history and History of economic thought
1.3. Scope and Significance of History of thought
1.4. The five major questions that we need to beat in mind in considering the
various schools of thought. these are
1.4.1. What was the historical background of the school? Or the pushing
factors behind
1.4.2. What were the basic tenets of the school? Who were the forerunners?
1.4.3. Whom did the school benefit? Or seek to benefit?
1.4.4. How was the school valid, useful, or correct in its time?
1.4.5. Which tenet of the school becomes long lasting contribution?
1.5. What was the historical situation in Ethiopia when these ideas were
developed elsewhere?
2. Methodological Issues of Economic
2.1. Methodological Controversies in Economic and Evolution of Various
Methodologies
2.1.1. Economics as an Art and as a Science
2.1.2. The importance of Empirical Verification and
2.1.3. The Rise of Logical positivism
2.1.4. From Logical positivism to falsificationism
2.1.5. Falsificationism to paradigm
a. K. Popper and its Critics
b. Thomas Kuhn
2.1.6. Recent developments in the Methodology of
Economics a. The Scientific revolution paradigm
b. Lakatos Research Program

3. Ancient Ideas of Economic Thought or Pre Classical Economics

3.1. Hebrewa, Greeck, Plato, Aristotle, Xeno Phone
3.2. Synicism, Stoicism, Epicurism, The Romance
3.3. Medieval Economics and Feudalism– St. Thomas Acquinas, Nicholas
Oresme, Grasham
3.3.1. Just price, Manor, Guild, usury
3.3.2. Economic functions of the State
3.4. Mercantilism
3.5. The Physiocratic school of Economic thought
4. The Classical School
4.1. Over view of the classical school
4.2. Factors for the Emergence of the Physiocratic school
4.3. The forerunners: Adam Smith, David Ricardo, Thomas Robert Malthus and J.S.
Mill, Jeremy Bentham, Jean Baptise Say, Conderect and Godwin
4.4. Adam smith: Adam Smith and Industrial revolution, Decision of labor,
the measure and values of labor, Cost of production theory, supply-determined
prices etc
4.5. Thomas Robert Malthus's population theory, The theory of general Gults, The
LDR, differential Rent, The alternative cost of land, Land as a factor of production
4.6. David Ricardo's system's : The labor theory value, Capital costs and Labor
values, The Ricardo effect, the Invariable Measure of value, the fundamental
theorem of value, the effect of capital accumulation, the trend of relative shares,
the theory of Comparative costs etc
4.7. Jean Baptist Say: Say; Say’s Law and classical monetary theory, say's identigy
4.8. Other contributions to the classical school: Jremy Bentham, Nassau William
Senior, John Stuart Mill
4.9. German Historical School: Frederic List
5. The rise of Socialist thought
5.1. Pre Marxian Socialist thinkers: Robert Owen, Sismonde de Sismondi, Pierre Joseph
Proudhon, Proudhan, Lassale, Louis Bllance, Max Webber etc
5.2.Marxian Economics: Marx’s Methodology, Value and Surplus Value, The
transformation Problem, Solutions of the Transformation Problem, Historical
transformation, Profits as Unearned income, etc
6. The Marginal Revolution:
6.1 Overview of the Marginalist School, The Maximization Principle
6.2 Forerunners of Marginalism: Antoine Augustin Cournot and Herman Heinrich Gossen,
6.3 First - Generation Marginalists: Jevons, Walras, and The Austrian School
6.4 Second - Generation Marginalists: Edgeworth, Wicksteed, Clark, Wicksell,

Reference Book:

 Spigle: (1991) the Growth of Economic thought

 I. Hahane Rimma: (1986) Development of Economic thought
 Boden, V. Elbert, Economic Evolution: Principles, Issues, Ideas, South Western
Publishing Co., Chicago, USA
 Gray, Alxander, the Development of Economic doctrin: An Introductory Survey
(revised By Alan Thomposon, 2nd ed. Longman group Limited
 Oser, Jacob, The Evolution of Economic Thought, 2nde.
  Jajela, H.L., history of Economic thought, 4th ed., Vikas publishing House Pvt.LTd, New
Delhi, India
 Roll, Eric, A History of Economic thoughts, Prentice-Hall, New York, USA
 Schurnpeter, Joseph A., History of Economic Analysis
 Paul, R.R., History Economic thought
 Newman, P. Charles the Development of Economic thought

Course Name: History of Economic Thought II

Course Code: Econ3142

1. The Neoclassical School

1.1 The Neoclassical School- Pure competition: Alfred Marshall (Marshallian
Economics, Marshall and the Cambridge school): Utility and Demand, Cost and
Supply; Irving Fischer
1.2 The Neoclassical School – Departure from pure Competition: Piero – Sraffa, Edward
Hastings Chamberlin, Jean Robinson
1.3 Sidge wick , Nicolson and the Cambridge school
1.4 Wick sell and the Stockholm school
2. Heterodox Economic Thought
2.1 Early Critics of Neoclassical Economics
2.1.1 The Historical School
2.1.2 The Old Institutional School
2.2 The development of Modern Heterodox school
2.2.1 The New Institutionalist School
2.2.2 Quasi- Institutionalists: Joseph Schumpeter, Gunnar Myrdal, John Kenneth
Galbraith
2.2.3 Post-Keynesians
3. General Equilibrium and Welfare Economics
3.1 Walrasian General Equilibrium
3.2 Approaches to welfare economics
3.2.1 Early neoclassical approach to welfare economics
3.2.2 New trends in welfare economics approach
3.3 Pareto efficiency in welfare and pre conditions of Pareto efficient conditions
3.4 Caldor and Hicks criterion of efficiency condition
3.5 For runners of the school
4. THE KEYNESIAN ECONOMICS
4.1 J.M Keynes
 4.2 The general theory of employment
4.3 Interest and money
4.4 The concept of the multiplier
4.5 Theory of employment &price
4.6 classical economics Vs Keynesian economics
4.7 The policy implications of classical Vs the policy implications of Keynesians
4.8 Keynesian economics and underdeveloped countries
5. THE POST KEYNESIAN DEVELOPMENT IN ECONOMIC THOUGHT
5.1 Emergence of macro economics
5.2 The emergence of econometrics as the sister discipline of economics
5.3 Keynesians, neo-Walrasians, and monetarists
5.4 Can capitalism survive? The radical view
6. The Development of Modern Microeconomic Theory
6.1 The Movement Away from Marshallian Economics
6.2 The Monopolist Competition Revolution
6.3 Milton Friedman and the Chicago approach to Microeconomics
6.4 Topics in Modern Microeconomics
7. The Development of Modern Macroeconomic Thought
7.1 Historical Forerunners of Modern Macroeconomics: Quantity Theory of Money, BC
Theory, Neoclassical Macroeconomics
7.2 Keynesian System: The Keynesian Revolution, ........................
7.3 Topics in Modern Macroeconomics: Monetarists, Problems with IS-LM Analysis,
The Micro foundations of Macroeconomics, The Rise of New Classical Economics,
Keynesian Responses to the New Classicals
8. The Development of Econometrics and Empirical Methods in Economics

Recommended Text Books

rd
Colander, David C. and Landreth, Harry (1994) History of Economic Thought, 3
th
ed. (Boston: Houghton Mifflin.) or (2002) 4 edition
th
Rima, Ingrid Hahne (1986) Development of Economic Analysis, 4 ed. (Irwin:
Homewood, Illinois)
th
Blaug, Mark (1996) Economic Theory in Retrospect 5 edition (Cambridge University
th
Press) Roll, Eric (1973) A History of Economic Thought, 4 ed. (London: Faber and Faber,
Ltd.) Bhatia H L (1989) History of Economic Thought, Vikas Publishing House Pvt. Ltd
rd
Spiegle, H.W. (1991) The Growth of Economic Thought, 3 ed. Duke University Press, London.
Hajela, T.N. (1967) History of Economic Thought

Heilbroner, Robert L., The Worldly Philosophers: the lives, times, & ideas of the great
th
economics thinkers, 7 Edition, published by NY Simon & Schuster, 1999 or by Penguin Books,
2000.
Schumpeter, Joseph A., History of Economic Analysis, New York, Oxford University Press,
1954.

Students may refer to any other decent history of Economic thought

books.

Module Delivery Methods

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

 Lecture Method
 In-class problem solving
 Group Work
 Assignment

Assessment Methods
Student evaluation in this module consist both formative and summative assessments including
quizzes, test and final exam. Marks will be allocated according to the following grading
schedule.

Assessment method Weight

Assignment (Indiv/group) 20%
Quizzes/Tests(Max of 10 % each) 30%
Final Exam 50 %
Total 100%