There are three core papers each semester as follows:
- Semester III
- Intermediate Microeconomics - I
- Intermediate Macroeconomics - I
- Statistical Methods for Economics
- Semester IV
- Intermediate Microeconomics - II
- Intermediate Macroeconomics - II
- Introductory Econometrics
Intermediate Microeconomics - I
Description:
The course is designed to provide a sound training in microeconomic theory to formally analyse the behaviour of individual agents. Since students are already familiar with the quantitative techniques in the previous semesters, mathematical tools are used to facilitate understanding of the basic concepts. This course looks at the behaviour of the consumer and the producer and also covers the behaviour of a competitive firm.
Outline:
Readings:
The course is designed to provide a sound training in microeconomic theory to formally analyse the behaviour of individual agents. Since students are already familiar with the quantitative techniques in the previous semesters, mathematical tools are used to facilitate understanding of the basic concepts. This course looks at the behaviour of the consumer and the producer and also covers the behaviour of a competitive firm.
Outline:
- Consumer Theory: Preference; utility; budget constraint; choice; demand; Slutsky equation; buying and selling; choice under risk and inter-temporal choice; revealed preference.
- Production, Costs and Perfect Competition: Technology; isoquants; production with one and more variable inputs; returns to scale; short run and long run costs; cost curves in the short run and long run; review of perfect competition.
Readings:
- Hal R Varian, Intermediate Microeconomics, a Modern Approach, W.W. Norton and Company / Affiliated East-West Press (India), 8th edition, 2010; The workbook by Varian and Bergstrom may be used for problems.
- C Snyder and W Nicholson, Fundamentals of Microeconomics, Cengage Learning (India), 2010
- B Douglas Bernheim and Michael D Whinston, Microeconomics, Tata McGraw- Hill (India), 2009
Intermediate Macroeconomics - I
Description:
This course introduces the students to formal modeling of a macro-economy in terms of analytical tools. It discusses various alternative theories of output and employment determination in a closed economy in the short run as well as medium run, and the role of policy in this context. It also introduces the students to various theoretical issues related to an open economy.
Outline:
Readings:
This course introduces the students to formal modeling of a macro-economy in terms of analytical tools. It discusses various alternative theories of output and employment determination in a closed economy in the short run as well as medium run, and the role of policy in this context. It also introduces the students to various theoretical issues related to an open economy.
Outline:
- Aggregate Demand and Aggregate Supply Curves: Derivation of aggregate demand and aggregate and supply curves; interaction of aggregate demand and supply.
- Inflation, Unemployment and Expectations: Phillips curve; adaptive and rational expectations; policy ineffectiveness debate.
- Open Economy Models: Short-run open economy models; Mundell-Fleming model; exchange rate determination; purchasing power parity; asset market approach; Dornbusch's overshooting model; monetary approach to balance of payments; international financial markets.
Readings:
- Dornbusch, Fischer and Startz, Macroeconomics, McGraw Hill, 11th edition, 2010
- N Gregory Mankiw, Macroeconomics, Worth Publishers, 7th edition, 2010
- Olivier Blanchard, Macroeconomics, Pearson Education, Inc., 5th edition, 2009
- Steven M Sheffrin, Rational Expectations, Cambridge University Press, 2nd edition, 1996
- Andrew B Abel and Ben S Bernanke, Macroeconomics, Pearson Education, Inc., 7th edition, 2011
- Errol D'Souza, Macroeconomics, Pearson Education, 2009
- Paul R Krugman, Maurice Obstfeld and Marc Melitz, International Economics, Pearson Education Asia, 9th edition, 2012
Statistical Methods for Economics
Description:
This course begins with some basic concepts and terminology that are fundamental to statistical analysis and inference. It then develops the notion of probability, followed by probability distributions of discrete and continuous random variables and of joint distributions. This is followed by a discussion on sampling techniques used to collect survey data.
The course introduces the notion of sampling distributions that act as a bridge between probability theory and statistical inference. The semester concludes with some topics in statistical inference that include point and interval estimation.
Outline:
Readings:
This course begins with some basic concepts and terminology that are fundamental to statistical analysis and inference. It then develops the notion of probability, followed by probability distributions of discrete and continuous random variables and of joint distributions. This is followed by a discussion on sampling techniques used to collect survey data.
The course introduces the notion of sampling distributions that act as a bridge between probability theory and statistical inference. The semester concludes with some topics in statistical inference that include point and interval estimation.
Outline:
- Introduction and Overview: The distinction between populations and samples and between population parameters and sample statistics; the use of measures of location and variation to describe and summarize data; population moments and their sample counterparts.
- Elementary Probability Theory: Sample spaces and events; probability axioms and properties; counting techniques; conditional probability and Bayes’ rule; independence.
- Random Variables and Probability Distributions: Defining random variables; probability distributions; expected values of random variables and of functions of random variables; properties of commonly used discrete and continuous distributions (uniform, binomial, normal, poisson and exponential random variables).
- Random Sampling and Jointly Distributed Random Variables: Density and distribution functions for jointly distributed random variables; computing expected values; covariance and correlation coefficients.
- Sampling: Principal steps in a sample survey; methods of sampling; the role of sampling theory; properties of random samples.
- Point and Interval Estimation: Estimation of population parameters using methods of moments and maximum likelihood
procedures; properties of estimators; confidence intervals for population parameters.
Readings:
- Jay L Devore, Probability and Statistics for Engineers, Cengage Learning, 2010
- John E Freund, Mathematical Statistics, Prentice Hall, 1992
- Richard J Larsen and Morris L Marx, An Introduction to Mathematical Statistics and its Applications, Prentice Hall, 2011
- William G Cochran, Sampling Techniques, John Wiley, 2007
Intermediate Microeconomics - II
Description:
The emphasis will be on giving conceptual clarity to the student coupled with the use of mathematical tools and reasoning. It covers general equilibrium and welfare, imperfect markets and topics under information economics.
Outline:
Readings:
The emphasis will be on giving conceptual clarity to the student coupled with the use of mathematical tools and reasoning. It covers general equilibrium and welfare, imperfect markets and topics under information economics.
Outline:
- General Equilibrium, Efficiency and Welfare: Equilibrium and efficiency under pure exchange and production; overall efficiency and welfare economics.
- Market Structure and Game Theory: Monopoly; pricing with market power; price discrimination; peak-load pricing; two-part
tariff; monopolistic competition and oligopoly; game theory and competitive strategy. - Market Failure: Externalities; public goods and markets with asymmetric information.
Readings:
- Hal R Varian, Intermediate Microeconomics, a Modern Approach, 8th edition, W.W. Norton and Company / Affiliated East-West Press (India), 2010; The workbook by Varian and Bergstrom could be used for problems.
- C Snyder and W Nicholson, Fundamentals of Microeconomics, Cengage Learning (India), 2010
Intermediate Macroeconomics - II
Description:
In this course, the students are introduced to the long run dynamic issues like growth and technical progress. It also provides the micro-foundations to the various aggregative concepts used in the previous course.
Outline:
Readings:
In this course, the students are introduced to the long run dynamic issues like growth and technical progress. It also provides the micro-foundations to the various aggregative concepts used in the previous course.
Outline:
- Economic Growth: Harrod-Domar model; Solow model; golden rule; technological progress and elements
of endogenous growth. - Microeconomic Foundations:
a. Consumption: Keynesian consumption function; Fisher‘s theory of optimal intertemporal choice; life-cycle and permanent income hypotheses; rational expectations and random-walk of consumption expenditure.
b. Investment: determinants of business fixed investment; residential investment and inventory investment.
c. Demand for money - Fiscal and Monetary Policy: Active or passive; monetary policy objectives and targets; rules versus discretion: time consistency; the government budget constraint; government debt and Ricardian equivalence.
- Schools of Macroeconomic Thoughts: Classicals; Keynesians; New-Classicals and New-Keynesians.
Readings:
- Dornbusch, Fischer and Startz, Macroeconomics, McGraw Hill, 11th edition, 2010
- N Gregory Mankiw, Macroeconomics, Worth Publishers, 7th edition, 2010
- Olivier Blanchard, Macroeconomics, Pearson Education, Inc., 5th edition, 2009
- Charles I Jones, Introduction to Economic Growth, W.W. Norton & Company, 2nd edition, 2002
- Andrew B Abel and Ben S Bernanke, Macroeconomics, Pearson Education, Inc., 7th edition, 2011
- Errol D'Souza, Macroeconomics, Pearson Education, 2009
- Robert J Gordon, Macroeconomics, Prentice-Hall India Limited, 2011
Introductory Econometrics
Description:
This course provides a comprehensive introduction to basic econometric concepts and techniques. It covers statistical concepts of hypothesis testing, estimation and diagnostic testing of simple and multiple regression models. The course also covers the consequences of and tests for misspecification of regression models.
Outline:
Readings:
This course provides a comprehensive introduction to basic econometric concepts and techniques. It covers statistical concepts of hypothesis testing, estimation and diagnostic testing of simple and multiple regression models. The course also covers the consequences of and tests for misspecification of regression models.
Outline:
- Nature and Scope of Econometrics
- Statistical Concepts: Normal distribution; chi-sq, t- and F-distributions; estimation of parameters; properties of estimators; testing of hypotheses: defining statistical hypotheses; distributions of test statistics; testing hypotheses related to population parameters; Type I and Type II errors; power of a test; tests for comparing parameters from two samples.
- Simple Linear Regression Model: Two Variable Case: Estimation of model by method of ordinary least squares; properties of estimators; goodness of fit; tests of hypotheses; scaling and units of measurement; confidence intervals; Gauss-Markov theorem; forecasting.
- Multiple Linear Regression Model: Estimation of parameters; properties of OLS estimators; goodness of fit - R2 and adjusted R2; partial regression coefficients; testing hypotheses – individual and joint; functional forms of regression models; qualitative (dummy) independent variables.
- Violations of Classical Assumptions: Consequences, Detection and Remedies: Multicollinearity; heteroscedasticity; serial correlation.
- Specification Analysis: Omission of a relevant variable; inclusion of irrelevant variable; tests of specification errors.
Readings:
- Jay L Devore, Probability and Statistics for Engineers, Cengage Learning, 2010
- John E Freund, Mathematical Statistics, Prentice Hall, 1992
- Richard J Larsen and Morris L Marx, An Introduction to Mathematical Statistics and its Applications, Prentice Hall, 2011
- D N Gujarati and D C Porter, Essentials of Econometrics, McGraw Hill, 4th edition, International Edition, 2009
- Christopher Dougherty, Introduction to Econometrics, Oxford University Press, 3rd edition, Indian edition, 2007
- Jan Kmenta, Elements of Econometrics, Indian Reprint, Khosla Publishing House, 2nd edition, 2008