Issues in Development Economics

ECO-A-DSE-6-B(2)
1. Demography and Development 10 lecture hours
• Demographic concepts; birth and death rates, age structure, fertility and mortality
• Demographic transitions during the process of development; gender bias in preferences and
outcomes and evidence on unequal treatment within households
• Connections between income, mortality, fertility choices and human capital accumulation
• Migration.
2. Land, Labor and Credit Markets 20 lecture hours
• The distribution of land ownership; land reform and its effects on productivity
• Contractual relationships between tenants and landlords
• Land acquisition; nutrition and labour productivity
• Iinformational problems and credit contracts
Page 51 of 75
• Microfinance
• Inter- linkages between rural factor markets.
3. Individuals, Communities and Collective Outcomes 15 lecture hours
• Individual behaviour in social environments
• Multiple social equilibria;
• Governance in organizations and in communities;
• Individual responses to organizational inefficiency.
4. Environment and Sustainable Development 15 lecture hours
• Defining sustainability for renewable resources
• A brief history of environmental change;
• Common-pool resources;
• Environmental externalities and state regulation of the environment;
• Market based instruments, economic activity and climate change.
5. Globalization 15 lecture hours: NEW
• Globalization in historical perspective
• the economics and politics of multilateral agreements;
• Trade, production patterns and world inequality
• Financial instability in a globalized world.
• India in the context of global economy
ECO-A-DSE-6-B(2)-TU
Tutorial contact hours: 15
Text
• Debraj Ray, Development Economics, Oxford University Press, 2009.
References
• Partha Dasgupta, Economics, a Very Short Introduction, Oxford University Press, 2007.
• Abhijit Banerjee, Roland Benabou and Dilip Mookerjee, Understanding Poverty, Oxford
University Press, 2006.
• Thomas Schelling, Micromotives and Macrobehavior, W. W. Norton, 1978.
• Albert O. Hirschman, Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations
and States, Harvard University Press, 1970.
• Raghuram Rajan, Fault Lines: How Hidden Fractures Still Threaten the World Economy,
2010.
• Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action,
Cambridge University Press, 1990.
• Dani Rodrik, The Globalization Paradox: Why Global Markets, States and Democracy Can‘t
Coexist, Oxford University Press, 2011.
• Michael D. Bordo, Alan M. Taylor and Jeffrey G. Williamson (ed.), Globalization in
Historical Perspective, University of Chicago Press, 2003
 Environmental Economics
ECO-A-DSE-6-B(2)
Unit 1. Introduction 7 lecture hours
1.1 What is environmental economics;
1.2 Review of microeconomics and welfare economics.
1.3 Interlinkages between the economy and environment
Reference for unit 1:
Hanley N, Shogren J.F. &White B. Environmental Economics in Theory and Practice,
Macmillan
Unit 2. Efficiency and Market Failure 18 lecture hours
2.1 Pareto optimality and market failure in the presence of externalities
2.2 Property rights and the Coase theorem
2.3 Public goods/ bads and market failure
Reference for unit 2:
Kolstad C, Environmental Economics, OUP
Unit 3. The Design and Implementation of Environmental Policy 20 lecture hours
3.1 Pigouvian Fees – Single Polluter, Multiple Polluters, Fees vs Subsidies
3.2 Regulating Pollution : Command and Control, Economic Incentives
3.3 The Basic Theory of Tradeable Pollution Permits
Reference for unit 3:
Kolstad C, Environmental Economics, OUP
Hanley N, Shogren J.F. & White B. Environmental Economics in Theory and Practice,
Macmillan
Unit 4. International Environmental Problems 13 lecture hours
4.1 Transboundary Pollution – Transboundary Pollution as a problem of international
externalities
4.2 International Trade and Environment – Pollution Havens
4.3 International Environmental Agreements – Basic idea about Montereal and Kyoto Protocol
and
Talks on Climate Change
Reference for unit 4:
Hanley N, Shogren J.F. &White B. Environmental Economics in Theory and Practice,
Macmillan
Kolstad C, Environmental Economics, OUP
Internet on Recent Environmental Agreements
Unit 5. Measuring the values of Environmental Costs and Benefits 17 lecture hours
5.1 Concepts of Willingness to pay (WTP) and Willingness to accept compensation (WTAC),
Difference between the two concepts
5.2 Direct and Indirect Methods of Valuation – Contingent valuation, Travel Cost, hedonic
Pricing –
basic concepts only (no econometric techniques) – when they should be used, what are the
advantages and disadvantages of these methods.
Reference for unit 5:
Hanley N, Shogren J.F. & White B. Environmental Economics in Theory and Practice,
Macmillan.
 Issues in Indian Economy
ECO-A-DSE-6-A(2)
1. Growth and structural changes
• Trends in national income and per capita income- Analysis with official statistics [2 lecture
hours]
• Structural Composition of national income and employment with NAS and NSSO data
[2 lecture hours]
2. Macroeconomic Policies and Their Impact
• Fiscal Policy [3 lecture hours]
• Trade and investment policy [3 lecture hours]
• Financial and monetary policies [3 lecture hours]
• Inflation and measures to control inflation [3 lecture hours]
• Labour laws and regulation [3 lecture hours]
3. Policies and Performance in Agriculture
• Growth; productivity; agrarian structure and technology, capital formation [3 lecture hours]
• Agricultural marketing [3 lecture hours]
• Food security and food policy [3 lecture hours]
• Pricing and procurement [3 lecture hours]
• WTO and Indian agriculture [3 lecture hours]
4. Policies and Performance in Industry
• Output, employment and productivity growth [2 lecture hours]
• Regional variation of industrial growth [2 lecture hours]
• Small scale industries- problems and prospects [2 lecture hours]
• Public sector; competition policy [2 lecture hours]
• Foreign direct investment in industry [2 lecture hours]
• Economic reforms and industry [2 lecture hours]
5. Trends and Performance in Services
• Formal and informal sectors [5 lecture hours]
• Banking and insurance [5 lecture hours]
• Trade in services [4 lecture hours]
ECO-A-DSE-6-A(2)-P
Total Practical Hours: 60, Number of Practical classes: 30
Students will have to take help of primary or secondary data and will have to make
statistical/econometric analysis of any problem on Indian economy as mentioned in this
course (i.e. the topic will not be outside the course) on the basis of the use of statistical
softwares like SPSS/STATA/R/E-VIEWS .A project report is to be prepared by the
candidate analysing the results obtained from the use of any one of the above-mentioned
statistical softwares. Though there is a project report, basically it is a computer
laboratory
based practical on the basis of which the project report will be constructed. Use of
computer
laboratory is essential for running the above-mentioned statistical softwares and also for
handling the data. In this sense the project work is to be interpreted as a Practical (it is
not a
separate project paper).The project should be supervised by a full time teacher of the
subject
belonging to the institution. All total 60 hours (30 Practical classes) have been allotted for
the
practical part of the course. The norm of the examination will be similar to that of a
practical
examination. To be more specific, the practical examination of the project is to be
conducted
jointly by the supervisor and an external examiner on the basis of the content of the
project
report, use of the above-mentioned statistical softwares in the computer laboratory (in
the
form of running the regressions used in the project or by determining the various
measures
of descriptive statistics used in the project in front of the examiners just like that of a
practical examination) and also on the basis of a viva-voce based on the candidate‟s
knowledge about the data set (especially data sources in case of secondary data) along
with
economic interpretation of the regression results. In case the student uses primary data
it
should be related to one of the topics covered in the course and why primary data is used
instead of secondary data is to be justified by the student. In case of use of primary data
students should have good knowledge about the sampling procedure used in collecting
data.
On the day of the practical examination students should carry with them soft copy of the
data set
used in the project.

References
• Shankar Acharya, 2010, ―Macroeconomic Performance and Policies 2000-8,ǁ in Shankar
Acharya and Rakesh Mohan, editors, India‘s Economy: Performances and Challenges:
Development and Participation, Oxford University Press.
• Rakesh Mohan, 2010, ―India‗s Financial Sector and Monetary Policy Reforms in Shankar
Acharya and Rakesh Mohan, editors, India‘s Economy: Performances and Challenges:
Development and Participation, Oxford University Press.
• Pulapre Balakrishnan, Ramesh Golait and Pankaj Kumar, 2008, ―Agricultural Growth in
India Since 1991, RBI DEAP Study no. 27.
• B.N. Goldar and S.C. Aggarwal, 2005, ―Trade Liberalisation and Price-Cost Margin in
Indian Industries, The Developing Economics, September.
• P. Goldberg, A. Khandelwal, N. Pavcnik and P. Topalova, 2009, ―Trade Liberalisation and
New Imported Inputs, American Economic Review, Papers and Proceedings, May.
• Kunal Sen, 2010, ―Trade, Foreign Direct Investment and Industrial Transformation in India,
ïn Premachandra Athukorala, editor, The Rise of Asia, Routledge.
• A. Ahsan, C. Pages and T. Roy, 2008, ―Legislation, Enforcement and Adjudication in Indian
Labour Markets: Origins, Consequences and the Way Forward, in D. Mazumdar and S. Sarkar,
editors, Globalization, Labour Markets and Inequality in India, Routledge.
• Dipak Mazumdar and Sandeep Sarkar, 2009, ―The Employment Problem in India and the
Phenomenon of the Missing Middleǁ, Indian Journal of Labour Economics.
• J. Dennis Rajakumar, 2011, ―Size and Growth of Private Corporate Sector in Indian
Manufacturing, Economic and Political Weekly, April.
• Ramesh Chand, 2010,- ―Understanding the Nature and Causes of Food Inflation,ǁ Economic
and Political Weekly, February.
• Bishwanath Goldar, 2011, ―Organised Manufacturing Employment: Continuing the
Debateǁ, Economic and Political Weekly, April.
• Panchanan Das. (2007), Economic Reform, Output and Employment Growth in Registered
Manufacturing Industries in India: Testing Kaldor‘s Hypotheses, Economic and Political
Weekly, 42 (39), pp. 3978-3985.
• Kauhik Basu and A. Maertens, eds, 2013, The New Oxford Companion to Economics in
India, Oxford University Press.
• A. Raychaudhury and P De, International Trade in Services in India: Implications for Growth
and
Inequality in a Globalizing World, OUP, 2012.
• India Development Reports, IGIDR
 Money and Financial Markets
ECO-A-DSE-6-A(2)
1. Introduction to money and Money and Banking 5 lecture hours
• Concept, functions, measurement; theories of money supply determination.
2. Financial Institutions, Markets, Instruments and Financial Innovations
• Role of financial markets and institutions; problem of asymmetric information – adverse
selection and moral hazard; financial crises.
• Money and capital markets: organization, structure and reforms in India; role of financial
derivatives and other innovations.
• Why banks are special Institutions? How banks act as a leveraging mechanism?
3. Financial Markets and Interest Rates Behaviour
• Determination; sources of interest rate differentials;
• Theories of term structure of interest rates; interest rates in India.
4. Banking System
• Balance sheet and portfolio management;
• Multiple Deposit Creation,
• Determinants of the Money Supply.
• Indian banking system- Changing role and structure- banking sector reforms
5. Central Banking and Monetary Policy
• Functions, balance sheet; goals, targets, indicators and instruments of monetary control;
• Monetary management in an open economy; current monetary policy of India.
ECO-A-DSE-6-A(2)- TU
Tutorial Contact hours: 15
Text
• F. S. Mishkin and S. G. Eakins, Financial Markets and Institutions, Pearson Education, 6th
edition, 2009.
References
• F. J. Fabozzi, F. Modigliani, F. J. Jones, M. G. Ferri, Foundations of Financial Markets and
Institutions, Pearson Education, 3rd edition, 2009.
• M. R. Baye and D. W. Jansen, Money, Banking and Financial Markets, AITBS, 1996.
• Rakesh Mohan, Growth with Financial Stability- Central Banking in an Emerging Market,
Oxford University Press, 2011.
• L. M. Bhole and J. Mahukud, Financial Institutions and Markets, Tata McGraw Hill, 5th
edition, 2011.
• M. Y. Khan, Indian Financial System, Tata McGraw Hill, 7th edition, 2011.
• N. Jadhav, Monetary Policy, Financial Stability and Central Banking in India, Macmillan,
2006.
• R.B.I. – Report of the Working Group: Money Supply Analytics and Methodology of
Compilation, 1998.
• R.B.I. Bulletin, Annual Report and Report on Currency and Finance (latest).
 Development Economics
ECO-A-CC-6
1. Meaning of Economic Development 10 lecture hours
• Income Approach and Capability Approach,
• Construction and interpretation of HDI; international variations in development measures;
comparing development trajectories across nations and within them.
• Dependency school of development.
2. Poverty and Inequality 15 lecture hours
• Inequality axioms; a comparison of commonly used inequality measures.
• Gender Inequality, connections between inequality and development.
• Poverty measurement, HPI; poverty traps and path dependence of growth processes.
• Vicious Circle of Poverty Hypothesis
3. Dual Economy Models 20 lecture hours
• The concept of surplus labour and disguised unemployment
• Peasants and Dualism with and without surplus labour
• Interdependence of agriculture and Industry (Lewis model, Ranis-Fei model)
• Rural-Urban Migration (Harris- Todaro model)
4. Population Growth and Economic Development 10 lecture hours
• Basic concepts (Birth and Death Rates, mortality, fertility)
• Demographic transition theory
• Cost of children, externalities
• Low Level Equilibrium Trap models and their criticism-critical minimum effort theory
(Nelson and Leibenstein).
5. Development Strategies 10 lecture hours
• Balanced vs. Unbalanced Growth Theories
• Choice of Techniques
6. Political Institutions and the State 10 lecture hours (New)
• Definition of institutions, Evolution of Political and Economic Institutions.
• The determinants of democracy.
• Alternative institutional trajectories and their relationship with economic performance.
• Within-country differences in the functioning of state institutions. State ownership and
regulation.
Government failures and corruption.
ECO-A-CC-6-14-TU
Tutorial Contact hours: 15
Texts
1. Todaro and Smith: Economic Development, Pearson Education, 2009
2. Debraj Ray, Development Economics, Oxford University Press, 2009.
3. Kaushik Basu, Analytical Development Economics, OUP
References
• Partha Dasgupta, Economics, a Very Short Introduction, Oxford University Press, 2007.
• Abhijit Banerjee, Roland Benabou and Dilip Mookerjee, Understanding Poverty, Oxford
University Press, 2006.
• KaushikBasu, The Oxford Companion to Economics in India, OUP, 2007.
• AmartyaSen, Development as Freedom, OUP, 2000.
• Daron Acemoglu and James Robinson, Economic Origins of Dictatorship and Democracy,
Cambridge University Press, 2006.
• Robert Putnam, Making Democracy Work: Civic Traditions in Modern Italy, Princeton
University Press, 1994
• Meier and Rauch (ed)- Leading Issues in Development Economics, OUP
• Hayami and Godo, Development Economics, OUP
• Thirlwall; Growth and Development. 5th Edition
 Public Economics
ECO-A-CC-6
Unit 1. Government in a Market Economy
• Market failure and externalities; public and merit goods;
• Government intervention;
• Public Expenditure for financing development
Unit 2. Choice and Public Economics
• Characteristics of Pure Public Good; Distinction between Pure Public Good and Private
Good;
• Market Failure in case of Pure Public Good Optimal provision of Public Goods - Private
Provision and Public Provision of Public Goods,
• Lindahl Equilibrium,
• Voting Equilibrium.
Unit 3. The Revenue and Expenditure of the Government
• Classification of Taxes; Canons of Taxation;
• Principles of Taxation - Benefit Principle, Equal Sacrifice Principle, Ability to Pay Principle;
• Incidence and Burden of Taxes;
• Effects of taxation on income distribution, work efforts, and on savings,
• The Laffer curve;
• Comparison between direct and indirect taxes – income and substitution effects;
• Optimal Taxation
Unit 4. Public Finance
• Meaning and Classification of Public Expenditure - government budget and its types,
government expenditure and tax multipliers, balanced budget multiplier;
• Meaning of Public Debt; Sources of Public Borrowings: internal and external borrowing;
Effects of Public Debt.
• Indian Public Finance – Fiscal Federalism in India
ECO-A-CC-6-13-TU
Tutorial contact hours: 15
References:
• J. F. Due and A. F. Friedlander. Government Finance-Economics of Public Sector, AITBS
Publishers and Distributors, 1994
• J. Hindriks and G. D. Myles. Intermediate Public Economics, The MIT Press; Annotated
Edition, 2006.
• R.A. Musgrave and P.B. Musgrave, Public Finance in Theory & Practice, McGraw Hill
Publications, 5th edition, 1989.
• Amaresh Bagchi (ed), Readings in Public Finance, OUP
• 5. J. E. Stiglitz. Economics of Public Sector,W. W Norton and Company, 3rd Edition, 2000.
• A Ghosh and C. Ghosh, Economics of the Public Sector, Prentice Hall India Learning Private
Limited; 2nd Revised edition (2014)