UPSC Main Examination - Optional Subject
Economics
Optional Subject
Advanced Economic Theory, International Trade, and Indian Economic Development
Syllabus
Paper I - Economic Theory & International Economics
1. Advanced Micro Economics
(a) Price Determination Approaches
Marshallian and Walrasian Approaches to Price determination.
(b) Alternative Distribution Theories
Ricardo, Kaldor, Kalecki.
(c) Market Structures
Monopolistic Competition, Duopoly, Oligopoly.
(d) Modern Welfare Criteria
Pareto Hicks and Scitovsky, Arrow's Impossibility Theorem, A. K. Sen's Social Welfare Function.
2. Advanced Macro Economics
Approaches to Employment Income and Interest Rate determination: Classical, Keynes (IS-LM) curve, Neo-classical synthesis and New classical, Theories of Interest Rate determination and Interest Rate Structure.
3. Money-Banking and Finance
(a) Monetary Economics
Demand for and Supply of Money: Money Multiplier Quantity Theory of Money (Fisher, Pigou and Friedman) and Keynes' Theory on Demand for Money, Goals and Instruments of Monetary Management in Closed and Open Economies. Relation between the Central Bank and the Treasury. Proposal for ceiling on growth rate of money.
(b) Public Finance
Public Finance and its Role in market economy: in stabilization of supply, allocation of resources and in distribution and development. Sources of Government revenue, forms of Taxes and Subsidies, their incidence and effects. Limits to taxation, loans, crowding-out effects and limits to borrowings. Public expenditure and its effects.
4. International Economics
(a) Trade Theories
- (i) Comparative advantage
- (ii) Terms of Trade and offer curve
- (iii) Product cycle and Strategic trade theories
- (iv) Trade as an engine of growth and theories of underdevelopment in an open economy
(b) Forms of Protection
Tariff and quota.
(c) Balance of Payments Adjustments
- (i) Price versus income, income adjustments under fixed exchange rates
- (ii) Theories of Policy mix
- (iii) Exchange rate adjustments under capital mobility
- (iv) Floating Rates and their implications for developing Countries: Currency Boards
- (v) Trade Policy and Developing Countries
- (vi) BOP, adjustments and Policy Coordination in open economy macro-model
- (vii) Speculative attacks
- (viii) Trade Blocks and Monetary Unions
- (ix) WTO: Trims, TRIPS, Domestic Measures, Different Rounds of WTO talks
5. Growth and Development
(a) Growth Theories
- (i) Theories of growth: Harrod's model
- (ii) Lewis model of development with surplus labour
- (iii) Balanced Unbalanced Growth
- (iv) Human capitals and Economic Growth
- (v) Research and Development and Economic Growth
(c) Trade & Investment
Economic Development and International Trade and Investment, Role of Multinationals.
(e) Welfare Indicators
Welfare indicators and measures of growth—Human development indices. The basic needs approach.
(b) Development Process
Process of Economic Development of less developed countries: Myrdal and Kuznets on economic development and structural change: Role of Agriculture in Economic Development of less developed countries.
(d) Planning & Development
Planning and economic Development: changing role of Markets and Planning, Private-Public Partnership.
(f) Environmental Sustainability
Development and Environmental Sustainability—Renewable and Non Renewable Resources, Environmental Degradation, Intergenerational equity development.
Paper II - Indian Economy
Indian Economy in Pre-Independence Era
Land System and its changes, Commercialization of agriculture Drain theory, Laissez faire theory and critique. Manufacture and Transport: Jute, Cotton, Railways, Money and Credit.
Indian Economy after Independence
A. The Pre-Liberalization Era
(i) Economic Thinkers
Contribution of Vakil, Gadgil and V.K.R.V. Rao.
(ii) Agriculture
Land Reforms and land tenure system, Green Revolution and capital formation in agriculture.
(iii) Industry
Trends in composition and growth, Role of public and private sector, Small scale and cottage industries.
(iv) National Income
National and Per capita income: patterns, trends, aggregate and Sectoral composition and changes therein.
(v) Income Distribution
Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.
B. The Post Liberalization Era
(i) New Economic Reform and Agriculture
Agriculture and WTO, Food processing, subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth.
(ii) New Economic Policy and Industry
Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals.
(iii) New Economic Policy and Trade
Intellectual property rights: Implications of TRIPS, TRIMS, GATS and new EXIM policy.
(iv) New Exchange Rate Regime
Partial and full convertibility, Capital account convertibility.
(v) New Economic Policy and Public Finance
Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation.
(vi) New Economic Policy and Monetary system
Role of RBI under the new regime.
(vii) Planning
From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments.
(viii) New Economic Policy and Employment
Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural Employment Guarantee Scheme.