Unit I
Microeconomic Theory
and Applications
Module 1) Theory of Consumer Bahaviour
> Theory of consumer behavior – utility
functions –demand analysis – price, income
and substitution effects - theory and
applications of indifference curves – Hicks
and Slutsky effects – revealed preference
theory - choice under uncertainty – recent
developments in the theory of demand - LES,
CES demand functions - dynamic versions
of demand – duality and indirect utility
functions – Bandwagon, Snob and Veblen
effects
Module 2) Theory of Costs and Production
> Traditional and modern theories of costs –
production function – Cobb- Douglas, CES,
VES and translog production functions
> Producer’s equilibrium using Isoquants -
Isocost analysis - technical progress – Harrod
and Hicks versions
Module 3) Market Structure and Equilibrium
Price and Output Determination
> Classification of markets – short- run and
long-run equilibrium under perfect
competition, monopoly and monopolistic
competition – shut down and break-even
analysis – monopoly power – different
oligopoly markets – Cournot, Bertrand,
Stackelberg, Chamberlin, Kinked demand
curve – Cartels – price leadership – price
discrimination – game theory and it’s
applications – prisoner’s dilemma
Module 4) Theory of Distribution, General
Equilibrium, Welfare Economics and
Uncertainty
> Micro and macro theories of distribution -
marginal productivity – Euler’s theorem and
adding up problem – contributions of
Ricardo, Marx, Kalecky - partial and general
equilibrium – contributions of Walras, Hicks
– Kaldor – theory of Second-Best – Arrow’s
Impossibility theorem – theory of risk and
uncertainty – moral hazard, adverse selection
and externalities
Unit II
Macroeconomic Theory
and Applications
Module 1) Macroeconomic Framework
> National income accounting - classical and
Keynesian analysis of macro aggregates – IS-
LM model – policy analysis in the closed and
open systems – Mundell -Fleming Model –
monetary approach to balance of payment –
labour market analysis – search theories
Module 2) Behavioural Foundations of
Macroeconomics
> Consumption functions and puzzle –
absolute, relative, permanent and life cycle
hypotheses of consumption
> Investment functions – role of interest rate
and expectations – neo-classical, Keynesian
and accelerator theories of investment – user
cost of capital – Tobin’s ‘q’ ratio
Module 3) Theory of Business Cycle, Inflation
and Unemployment
> Business cycle facts - direction and timing of
variables – aggregate demand and supply
analysis of business cycles - theoretical
contributions of Samuelson, Hicks and
Kaldor – multiplier and accelerator – great
depression and financial crisis – alternative
views
> Classical, Keynesian and monetarist
approaches to inflation and unemployment
– Philip’s curve – sacrifice ratio and Okun’s
law
Module 4) Macroeconomic Schools and
Policies
> Schools in macroeconomics – classical,
Keynesian, Monetarists, new classicals,
supply side - rational expectations – new
Keynesian and new political macro
economics
> Objectives of macroeconomic policy –
monetary policy – instruments- rules vs
discretion - Taylor’s rule – dynamic time
inconsistency models – fiscal policy –
instruments- Barro Ricardo equivalence
theorem – income policy
Unit III
Quantitative Methods
for Economic Analysis
Module 1) Statistical Methods
> Measures of central tendency – mean,
median, mode, geometric and harmonic
mean – measures of dispersion – range,
quartile deviation, mean deviation, variance
and standard deviation- skewness and
kurtosis – correlation – types and
measurement – partial and multiple
regression analysis - probability – various
types of events – laws of addition and
multiplication – Bayes’ theorem –
distribution – binomial, poisson, and normal
distributions and their properties
Module 2) Mathematical Methods
> Matrix operation – determinants –
Crammer’s rule – static and dynamic input-
output models – linear programming –
graphical and simplex methods – duality and
shadow prices
> Functions – rules of differentiation and
integration – uses in economics –
interpretation of revenue, cost, demand,
supply functions, elasticities – market
equilibrium – consumer’s and producer’s
surplus
Module 3) Econometric Methods
> Methodology of econometric research –
simple and general linear econometric
models – assumptions – estimation of
parameters – co-efficient of determination
(R2) – Gauss Markov theorem – concepts of
autocorrelation, multicollinearity and
heteroscedasticity and their tests
Module 4) Research Methodology
> Sampling - types and techniques –
hypothesis testing – null and alternative
hypotheses – type I and type II error –
theories of estimation – point and interval
estimation – t, F, and chi-square tests
> Research design – collection, organization
and analysis of data – presentation of
research report
Unit IV
Development Experiences of
India and Kerala
Module 1) Growth and structural changes of
Indian Economy
> Growth and sector-wise contribution to GDP
and employment - demographic features –
Distribution of National Income among four
factors of production - Regional disparity in
growth and development - HDI related
indicators in India - poverty and
unemployment in India
Module 2. Development Strategies in India
> Economic Planning in India - objectives and
achievements - development strategies in
India - Mixed Economic Framework -
Economic Reforms - recent developments
Module 3) Economic Policy and Development
in India
> Issues and policies in Agriculture, Industry,
Trade, Infrastructure - price movements and
India’s monetary, fiscal and financial sector
policies and reforms - recent developments
Module 4) Kerala’s Economic Development
> Kerala model of development - Sustainability
issues- Poverty and Unemployment in
Kerala - Structural changes in Kerala’s
economy- performance of agriculture,
industry, infrastructure and services – Issues
of Migration, Urbanisation and
Demographic features - Fiscal scenario in
Kerala - Decentralisation and achievements
– recent developments
Unit V
Economic Development and
Environmental Economics
Module 1) Concept and Measurement of
Economic Development
> Meaning of development – growth vs
development - indicators of development –
per capita income - PQLI - HDI - HPI -
perpetuation of under development - vicious
circle of poverty - circular causation -
structural view of under development -
inequalities in income distribution - Lorenz
curve and Gini coefficient – Kuznet’s
Inverted U-hypothesis.
Module 2. Theories of Economic Growth
> Classical theories - Marx - Schumpeter -
Harrod-Domar model - Neo-classical growth
theories - Solow - Meade - Mrs. Joan
Robbinson - Kaldor-Mirrlees Model -
Technical progress function of Kaldor -
Convergence Hypothesis - Endogenous
theories of growth – Education - Research
and Human Capital.
Module 3) Partial Theories of Growth
> Dual Economies - Social dualism -
Technological dualism - Geographical and
financial dualism - Lewis theory of
development with unlimited supply of
labour - Fei-Ranis theory - Balanced growth
- Rosenstein Rodan, Nurkse and Lewis -
Unbalanced Growth - Low level equilibrium
trap - Critical minimum effort thesis -
Dependency theories of development.
Module 4) Measurement of Environmental
Values
> Use values; Option values and non-use
values; Valuation methods — Methods based
on observed market behavior - Hedonic
property values and household production
models (travel cost method and household
health production function) - Methods based
on response to hypothetical markets -
contingent valuation andcontingent ranking
methods.
Module 5. Environmental and Natural
Resource Problems in India
> Mechanism for environment regulation in
India - Environmental laws and their
implementation - Policy instruments for
controlling water and air pollution and
forestry policy - People’s participation in the
management of common and forest lands -
The institutions of joint forest management
and the joint protected area management -
Social forestry — rationale and benefits -
Solid waste management - causes, effects and
control measures (E-waste, Plastic waste,
Industrial waste) - Pollution analysis and
policy -causes, effects and control measures
of pollution (air, water, noise and soil).
Unit VI
Money, Banking, Public Finance
and International Trade
Module 1) Money and Banking
> Money and finance – demand for money –
contributions of Irving Fisher, J M Keynes,
Milton Friedman, Baumol and Tobin –supply of money – mechanistic model –
behavioural model and H-theory – money
multiplier
> Commercial banking – functions - credit
creation – central banking –functions –
financial markets – structure, composition
and instruments of capital markets – capital
market reforms
Module 2) Public Finance
> Difference between private goods, public
goods and merit goods – public expenditure
- Wagner’s law of increasing state activities
- principles of public expenditure – public
revenue – sources – kinds and canons of
taxation – taxable capacity – impact and
incidence – public debt – classification and
effects – Centre-State financial relations –
Finance Commissions - recent developments
Module 3) Theories of International Trade
> Theories of international trade - Smith,
Ricardo, Heckscher-Ohlin – Leontief paradox
– factor price equalization theorem – models
based on imperfect competitions – free trade
and protection – types and effects of tariffs
and quotas – Stopler - Samuelson theorem –
Metzler paradox
Module 4. Balance of Payments / Economic
Integration
> Balance of payment accounting – elasticity
and absorption approaches – foreign
exchange markets – flexible and floating
exchange rates – IMF – IBRD – ADB
> Forms of economic integration – PTA – FTA
– customs union – economic union – progress
of SAARC / SAPTA / ASEAN – regionalism
vs multilateralism –recent developments
 - Economics (Paper 2) Complete Syllabus 2020){kind=link}
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