CHRIST (Deemed to University), Bangalore

DEPARTMENT OF ECONOMICS

School of Social Sciences

Syllabus for
Master of Arts (Applied Economics)
Academic Year  (2022)

 
1 Semester - 2022 - Batch
Course Code
Course
Type
Hours Per
Week
Credits
Marks
MEC131 MICROECONOMIC THEORY AND APPLICATIONS-I Core Courses 4 4 100
MEC132 MACROECONOMIC THEORY AND POLICY - I Core Courses 4 4 100
MEC133 RESEARCH METHODOLOGY FOR APPLIED ECONOMICS Core Courses 4 4 100
MEC134 STATISTICS FOR ECONOMICS Core Courses 4 4 100
MEC135 HISTORY OF ECONOMIC THOUGHT Core Courses 4 4 100
MEC141 APPLIED FINANCIAL ECONOMICS Discipline Specific Elective 4 4 100
MEC142 COMPARATIVE ECONOMICS OF SOUTH AND EAST ASIA Discipline Specific Elective 4 4 100
MEC143 AGRICULTURAL ECONOMICS Discipline Specific Elective 4 4 100
MEC151 MS EXCEL FOR DATA ANALYSIS Skill Enhancement Course 2 2 50
2 Semester - 2022 - Batch
Course Code
Course
Type
Hours Per
Week
Credits
Marks
MEC231 MICROECONOMIC THEORY AND APPLICATIONS-II - 4 4 100
MEC232 MACROECONOMIC THEORY AND POLICY - II - 4 4 100
MEC233 ADVANCED MATHEMATICAL ECONOMICS - 4 4 100
MEC234 ECONOMETRIC METHODS - 4 4 100
MEC241 ECONOMICS OF BANKING AND INSURANCE - 4 4 100
MEC242 ECONOMICS OF INDUSTRIAL ORGANIZATION - 4 4 100
MEC243 ECONOMICS OF GENDER - 4 4 100
MEC244 POLITICAL ECONOMY OF INDIA - 4 4 100
MEC251 BUSINESS ANALYTICS USING R - 2 2 50
3 Semester - 2021 - Batch
Course Code
Course
Type
Hours Per
Week
Credits
Marks
MEC301 BUSINESS ANALYTICS USING PYTHON Skill Enhancement Course 2 2 50
MEC331 INDIAN ECONOMY Core Courses 4 4 100
MEC332 ECONOMICS OF GROWTH AND DEVELOPMENT Core Courses 4 4 100
MEC333 BEHAVIOURAL ECONOMICS Core Courses 4 4 100
MEC334 APPLIED ECONOMETRICS Core Courses 4 4 100
MEC341 OPERATIONS RESEARCH Discipline Specific Elective 4 4 100
MEC342 ETHICS AND ECONOMICS Discipline Specific Elective 4 4 100
MEC343 ECONOMICS OF HEALTH AND EDUCATION Discipline Specific Elective 4 4 100
MEC381 INTERNSHIP Core Courses 0 2 50
4 Semester - 2021 - Batch
Course Code
Course
Type
Hours Per
Week
Credits
Marks
MEC431 ECONOMICS OF LABOUR MARKETS - 4 4 100
MEC432 PUBLIC FINANCE AND POLICY - 4 4 100
MEC433 ENVIRONMENT AND RESOURCE ECONOMICS - 4 4 100
MEC434 INTERNATIONAL TRADE AND FINANCE - 4 4 100
MEC481 DISSERTATION - 0 4 100
      

    

Department Overview:

Established in 1969, the Department of Economics has progressed into one of the most vibrant centres of learning economics in the country. The Department of Economics at the Central Campus offers four undergraduate Triple Major programmes and two post-graduate programmes. The Department functions under the School of Social Sciences, under the leadership of Dr. Tony Sam George, the Dean and Dr. Joshy K J, the Head of the Department. The Department has eighteen full time, permanent faculty members at the Central Campus who are highly specialised in different areas of the discipline. One of the highlights of the academic programmes is the emphasis on research based curriculum and experiential learning. To ensure the holistic development of the students and to sustain the academic inventiveness of the faculty the department engages in numerous workshops, seminars, industry interfaces, faculty development programmes and student activities.

Mission Statement:

Vision- Achieving excellence, broadening horizons, building competencies and developing a sustainable education model through critical thinking, ethical groundedness and commitment to society. Mission- Preparing students to understand and resolve the multitude of challenges in the economy through relevant research based education. We aim to educate our students to become successful professionals and socially responsible citizens who contribute positively to the socio-economic well-being.

Introduction to Program:

The MA Applied Economics programme of the Department of Economics in CHRIST (Deemed to be University) aims to form ethically well-grounded students with the ability for incisive reasoning, deep knowledge of economic theory and skill in empirical methodology. One of the highlights of the academic programmes is the emphasis on research based curriculum and experiential learning. The Programme seeks to strike a sound balance between theory and application along with an interdisciplinary dimension without diminishing the focus on economics. This approach is meant to help students face the dynamic challenges in terms of the market and academics. In line with this approach the programme has a combination of papers related to economic theory, methodology and three streams of specialisations which, on the one hand meet the needs of corporate employment and on the other create the ability of applying economic theory to development problems of the world. More specifically students will be equipped to take up careers in academics, teaching, research, business consulting and analytics, civil society and activist organisations, the public sector, government services and international civil services.

Program Objective:
PO1: Demonstrate in-depth knowledge of the discipline of Economics and use its principles and theories to evaluate aspects of economic and social reality;

PO2: Recognise social problems and phenomena beyond the discipline specific lens by acknowledging plurality of concepts, theories and methods.

PO3: Identify and critically examine the issues concerning economic, institutional and social structures by problematising and raising reflective questions for academic inquiry.

PO4: Exhibit ability to independently carry out a research project using tools and skills acquired through research methodology, statistics, and econometrics

PO5: Demonstrate expertise in soft skills that will enable them to communicate effectively and engage with their peers, work spaces and community at large.

PO6: Engage with societal problems through informed and active citizenry by undertaking field assignments and projects.

PO7: Recognise and accept plurality of values and understand how individual choices have ethical and wellbeing implications for oneself and others.

PO8: Work with environmental consciousness and gender sensitive values by critically engaging with theories and policy debates in the areas of environmental and gender concerns.

PO9: Demonstrate employability skills acquired through skill based courses like Applied Econometrics, Financial Economics Business Analytics, SPSS and STATA, Advanced Excel and Field Internships.

PO10: Exhibit leadership and interpersonal communication skills developed through curricular and co-curricular activities and programs in group settings.

Assesment Pattern

At least two components for CIAs as decided by the concerned faculty.

Examination And Assesments

CIAs are composed of three components and carry 50% weightage CIA 1 and 3 are faculty initiated ones, CIA 2 is the Mid-semester examination. End Semester Exam carries 50% weightage.

MEC131 - MICROECONOMIC THEORY AND APPLICATIONS-I (2022 Batch)

Total Teaching Hours for Semester:60
No of Lecture Hours/Week:4
Max Marks:100
Credits:4

Course Objectives/Course Description

 

The course is intended to provide a good understanding and base for the students to apply the concepts and methods of microeconomics in the practical field.  A good grasp of microeconomics is vital for managerial decision-making, designing and understanding public policy. The objective of the course is to provide the students with a thorough knowledge and understanding of the foundations of modern economic analysis. This course will equip the students to understand the various aspects of the traditional Microeconomic theory as well as the latest developments in this field and the applications of theories in analysing current economic problems and to develop the ability to synthesize knowledge.

Course Outcome

CO1: Demonstrate an in-depth knowledge of the decision-making process of the economic agents in terms of choice behaviour, production and price determination and their application in real-life situations.

CO2: Solve and interpret economic problems by using the analytical tools of microeconomics

CO3: Critically evaluate the changing market conditions on the behaviour of the consumers and producers.

CO4: Analyze the performance of the firms under different market structures and evaluate the economic outcomes from the social welfare perspective

Unit-1
Teaching Hours:5
Methodology
 

Construction of theories: Deduction and induction; Empirical verification; Theories and tautologies.

 

Unit-2
Teaching Hours:15
Utility and Demand
 

Consumer preferences; Axioms of preference ordering; Utility function: existence and characteristics; concavity and quasiconcavity; Budget sets; Demand functions: Zero homogeneity; Income and substitution effects; Slutzky theorem: Indirect utility functions; Hicksian compensated demand functions; Expenditure functions; Substitutes and complements: gross and pure; Revealed preference.

Unit-3
Teaching Hours:20
Production and Supply
 

Production functions; Concavity and quasiconcavity; Returns to a factor and to scale; Total, marginal and average cost function; Long-run cost curves: envelopes; Factor demand functions, Conditional factor demands; Profit maximization; Supply functions, cost minimization – first and second-order conditions; Linear homogeneous production functions and their properties; Cobb-Douglas, CES, VES, and Translog production functions and their properties;Leontief’s production functions, Elasticity of substitution, its derivation for C-D and CES functions; the impact of tax/subsidy.

 

 

Unit-4
Teaching Hours:20
Markets
 

Characterizing perfect competition; Pricing and output under perfectly competitive markets; Monopoly markets: Pricing, discrimination; welfare costs; Monopolistic competition: Characteristics; Long run and short run behavior; Oligopoly: Cournot’s model; Stackelberg framework: Instability; Dominant firm; Compensating variation; Price and output determination under monopsony and bilateral monopoly;

Text Books And Reference Books:

Henderson, J. M., & Quandt R. E., (2003). Microeconomic Theory: A Mathematical Approach,New Delhi: McGraw Hill.

Koutsoyiannis, A., (1979). Modern Microeconomics. London: Macmillan Press.

Kreps, David M., (1990). A Course in Microeconomic Theory. Princeton: Princeton University Press.

Mas-Colell, A., Whinston, M. D., & Green, J. R. (1995). Microeconomic theory (Vol. 1). New York: Oxford university press.

Sen, Anindya., (2007). Microeconomics: Theory and Applications. New Delhi: Oxford University Press.

Varian, Hal R., (2000). Microeconomic Analysis. New York: W.W. Norton & Company.

Varian, Hal R., (2010). Intermediate microeconomics: a modern approach. Vol. 6. New York: W.W. Norton & Company.

Essential Reading / Recommended Reading

Ferguson, C. E. (1969), The Neoclassical Theory of Production and Distribution, Cambridge: Cambridge University Press.

Fuss, M., and McFadden, D., eds. Production Economics: A Dual Approach to Theory and Applications. Amsterdam: North-Holland Publishing Co., 1978.

G.S. Maddala and E. Miller (1989), Microeconomics: Theory and Applications, McGrow-Hill, New Delhi.

H L Ahuja (2012), Advanced Economic Theory – Microeconomic Analysis, S. Chand Ltd.

J. Henderson & Richard E. Quandt (2003), Microeconomic Theory: Mathematical Approach, Tata McGraw-Hill Publishing Company Limited, New Delhi.

J. De. V. Graff, Theoretical Welfare Economics, Cambridge University Press, 1963.

John A. Edgren (1995), On the Relevance of John Rawls theory of Justice to Welfare Economics, Review of Social Economy, Vol. 53.

Meunier, Valerie (2005). Lecture notes from Chapter 6: Moral Hazard, Strategic Behavior, Information and Contractual Relationships, available in Internet site, www.econ.au.dklfag/701O/F2005/default.ht

Pindyck, Robert & Rubinfeld, Daniel (2013), Micro Economics, 8th Edition, Pearson Education, USA

Paul A. Samuelson (1947), Foundations of Economic Analysis. 1983 edition, Cambridge, Mass: Haward University Press.

S. K. Nath (1969), A Reappraisal of Welfare Economics, London: Routledge and Kegan Paul Ltd.

Richard A. Musgrave and Peggy B. Musgrave, (1989), Public Finance in Theory and Practice, Singapore: McGraw-Hill International

W. J. Baumol, (1952), Welfare Economics and the Theory of the State, Harvard University Press.

Evaluation Pattern

CIA I   : 20 Marks

CIA II  : 50 Marks (Mid Semester Examination)

CIA III : 20 Marks

 

MEC132 - MACROECONOMIC THEORY AND POLICY - I (2022 Batch)

Total Teaching Hours for Semester:60
No of Lecture Hours/Week:4
Max Marks:100
Credits:4

Course Objectives/Course Description

 

This paper aims at strengthening the knowledge of important macroeconomic variables and their role in determining the equilibrium level of output and employment and provides insights into the factors influencing the capital inflows and outflows in an open economy model. It helps the students to understand the theoretical foundation of macroeconomics and the contribution of different schools of thought to the further development of macroeconomics. The students will be able to critically evaluate the consequences of basic macroeconomic policy options under differing economic conditions.

Course Outcome

CO1: Students will be able to identify the nature of various macroeconomic variables such as output, unemployment, inflation, productivity, and the major challenges associated with the measurement of these aggregates.

CO2: Students will be able to find the linkages between financial markets and the real economy, and how these linkages influence the impact of economic policies over different time horizons.

CO3: Students will be able to describe the main macroeconomic theories of short-term fluctuations and long-term growth in the economy.

CO4: Students will be able to critically evaluate the consequences of basic macroeconomic policy options under differing economic conditions within a business cycle.

Unit-1
Teaching Hours:10
Income and Output determination
 

The development of macroeconomics- Actual and potential output-GNP identity on the product, income and disposition side-The government sector and foreign sector-Classical theory of income and employment- The saving investment balance- The labour market equilibrium-  Aggregate demand and supply, money and prices in classical model- Keynes’ theory of employment- Consumption function, investment demand- Effective demand- Determination of equilibrium income- Theory of multiplier-Derivation of the expenditure multiplier.

Unit-2
Teaching Hours:14
Demand side and Supply side Equilibrium
 

Equilibrium income and the interest rate determination in the product market- Equilibrium income and the interest rate determination in the money market- Derivation of IS and LM curves-Shift in IS and LM curves-Simultaneous equilibrium- Fiscal and monetary policy effects on demand-Interaction of monetary and fiscal policies- -Aggregate supply in the short run and long run-Supply side disturbances and reactions-Demand side disturbances and reactions-Determination of equilibrium income, employment, rate of interest and price level.

Unit-3
Teaching Hours:10
Consumption, Saving and Investment
 

Theories of aggregate consumption- Absolute income hypothesis- Relative income hypothesis- Life cycle hypothesis-Permanent income hypothesis- Robert Hall and Random Walk Hypothesis- Non-income factors affecting consumption-The MPS model-The wealth effect in the static model-The present value criterion for investment-The marginal efficiency of investment-Investment demand and output growth-The accelerator principle and stabilization policy-The rental cost of capital and investment-Tobin’s q theory of investment.

Unit-4
Teaching Hours:16
Monetary and Fiscal polocy
 

The instruments of monetary policy-The mechanism of monetary expansion- money growth targeting and inflation targeting -The effects of fiscal policy changes-Three ranges of LM curve-The effectiveness of monetary and fiscal policy: Monetarists and Fiscalists-Tax rate changes and the budget deficit-Fiscal stimulus and deficit financing- crowding out and crowding in controversy- Quantitative easing policies- macroeconomic policies in advanced and emerging economies.  

Unit-5
Teaching Hours:10
The External Sector equilibrium
 

The current account and product market equilibrium-The capital account and balance of payments equilibrium-Balance of payment adjustment and the LM curve- The Classical approach: The automatic adjustment method- Balance of payment adjustment by policy measures: Mundell-Fleming model- The expenditure changing policies- The expenditure switching policy: Devaluation- Monetary approach to Balance of payment adjustments.

Text Books And Reference Books:
  1. William.H.Branson (2005). Macroeconomic Theory and Policy, Third Edition, All India Traveller Book Seller Publishers, New Delhi.
  2. D.N. Dwivedi. (2005). Macroeconomics:Theory and Policy. 2nd Edition, Tata Mc Graw Hill Education.
  3. Levacic and Rebman.  (1982). Macro Economics: An Introduction to Keynesian and Neo-Classical Controversies. 2nd Edition, Macmillan Publishers.
Essential Reading / Recommended Reading
  1. William.H.Branson (2005). Macroeconomic Theory and Policy, Third Edition, All India Traveller Book Seller Publishers, New Delhi.
  2. D.N. Dwivedi. (2005). Macroeconomics:Theory and Policy. 2nd Edition, Tata Mc Graw Hill Education.
Evaluation Pattern

CIA 1- 20 marks based on the criteria specified in the course plan

CIA 2- 50 marks based on the midsemester examination

CIA 3- 20 marks based on the criteria specified in the course plan

End semester examination-100 marks

MEC133 - RESEARCH METHODOLOGY FOR APPLIED ECONOMICS (2022 Batch)

Total Teaching Hours for Semester:60
No of Lecture Hours/Week:4
Max Marks:100
Credits:4

Course Objectives/Course Description

 

This course aims to provide basic ideas on how to think as a researcher, the various considerations involved in the practice of social research and how these relate to the strategy and design of research.

Course Outcome

CO1: Gain skills to work independently, to plan and to carry out a small-scale research project in the discipline of Economics

CO2: Identify the research strategies best suited for particular types of research questions and analysis

CO3: Critically reflect upon issues of ethics and role of the researcher Mapping of Course Outcomes (COs) to Programme Outcomes (POs) Mapping

Unit-1
Teaching Hours:15
Introduction to research & research methods
 

Ways of knowing and understanding the world and the research process - The nature of knowledge and theory - Philosophy of Social Science Research - Relevance of Social Science Research - Objectivity and Values in Social Sciences.

Unit-2
Teaching Hours:5
Logic of Scientific Investigation
 

Theory Construction in Social Science Research - Approaches to Social Science and Managerial Research, Theoretical, Applied and Action Research - Ethical Issues in Research on Human or Social Subjects - Non-sexist approach in Social Sciences.

Unit-3
Teaching Hours:5
Research Design
 

Review of Literature - Identification of Research Gaps and Research Needs - Identification, selection and formulation of research problem - Formulating Hypotheses/Propositions/Issues, conceptualizing research problem.

Unit-4
Teaching Hours:15
Overview of Social Science Methodology
 

Uni-disciplinary, inter-disciplinary, multi-disciplinary methodologies - Quantitative Research Methods: An Overview - Qualitative Research Methods: An Overview - Historical Method - Case Study Method - Action Research - Monitoring and Evaluation - Triangulation (including/mixing Qualitative and Quantitative) Methods.

Unit-5
Teaching Hours:10
Information needs and use in social sciences
 

Secondary Sources of Information: Using and Integrating secondary and primary information - Quantitative Data: Kinds and quality of Data, demography, labour force, agriculture, industry - Quantitative Data: Human resources, education, health, housing, employment, banking, rural data bas - Quantitative Data: Survey Reports, Research Studies, Historical Data Tools - Statistical Systems – International, National and Local: Objectivity, Reliability and Validity of Data - Surveys and Questionnaires: Questionnaire, Schedule Design and Construction, Sample Surveys, Survey Administration - Observation – Structured and unstructured, Recording and Interpretation of Observations, Ethnography -Interviews: Nature of the Interview Process - Structured and Unstructured Interviews, Focus Groups, Group Discussions.

Unit-6
Teaching Hours:10
Analysis of Qualitative and Quantitative Data
 

Choice of Statistical and Processing Techniques - Interpretative Narrative Methods - Theory of the Testing of Hypotheses - Presentation of Research Findings, Products of Research, Thesis Writing - Factors conducive to research utilization.

Text Books And Reference Books:

Alan Bryman (2012). Social Research Methods, Oxford University Press.

 

Essential Reading / Recommended Reading
  1. Lawrence Neuman (2010). Social Research Methods: Qualitative and Quantitative Approaches. Pearson Publishers.
  2. Foddy, W (1993). Constructing Questions for Interviews and Questionnaires: Theory and Practice in Social Research, Cambridge: Cambridge University Press
  3. Fitz-Gibbon, C. T. and L. L. Morris (1987). How to Analyse Data, Newbury Park: Sage Publications, Inc.
Evaluation Pattern

CIA 1 and CIA 3 for 20 marks each; Mid- semester exam for 50 marks and End semester exams for 100 marks.

MEC134 - STATISTICS FOR ECONOMICS (2022 Batch)

Total Teaching Hours for Semester:60
No of Lecture Hours/Week:4
Max Marks:100
Credits:4

Course Objectives/Course Description

 

The objective of the paper is to make students familiar with theory and application of statistical methods.  This course covers the statistical foundations of data analysis including the statistical theory and its applications in Economics. In particular, this module broadly covers the descriptive statistics, theory of probability, statistical distributions, estimation and hypothesis testing, and non-parametric tests.

Course Outcome

CO1: Possess a sound apprehension of the statistical concepts and theories

CO2: Solve problems in Statistics described in the course.

CO3: Have a sound understanding of the applicability of statistical concepts in economic analysis.

CO4: Apply statistical tools in analysing economic data and interpreting results.

Unit-1
Teaching Hours:10
Probability Theory
 

 Concept of probability, conditional probability and Bayes’ theorem, random variables – discrete and continuous, density and distribution functions, joint, marginal and conditional distribution, moment generating function, law of large numbers and Central Limit theorem

 

 

 

Unit-2
Teaching Hours:10
Theory of Probability Distribution
 

Discrete versus continuous distribution, uniform, binomial, negative binomial, Poisson, geometric and hyper-geometric, normal, log-normal, exponential, gamma and beta distribution, characteristic function and moment generating function

Unit-3
Teaching Hours:10
Methods and Sampling distributions
 

 

Simple random sampling: with and without replacement, stratified random sampling, probability and non-probability sampling, statistic and sample moments, sampling distributions: Student’s-t, Chi square and F-distribution, determinants of sample size

 

Unit-4
Teaching Hours:15
Theory of Estimation
 

Point and interval estimation, properties of good estimators: unbiasedness, consistency, efficiency, different methods of estimation, maximum likelihood and method of moment estimation, properties of maximum likelihood and method of moment estimators, confidence interval for unknown parameters

Unit-5
Teaching Hours:15
Hypothesis Testing
 

 

Statistical hypothesis, simple versus composite hypothesis, critical region, types and size of error – type-I and type-II error, power of a test, Neyman-Pearson lemma, trinity of classical tests (Wald test, Lagrange multiplier, likelihood ratio), application of hypothesis testing with known and unknown variances, Chi-square test for testing independence of two-classification criteria, test for correlation

 

Text Books And Reference Books:

 

  1. Anderson, Sweeny & Williams, Statistics for Business and Economics
Essential Reading / Recommended Reading

  1. Nabendu Pal & Sahadeb Sarkar, Statistics Concepts and applications
  2. Speigal. M.R.(1992), Theory and Problems of Statistics, McGraw Hill, London
  3. Monga,G.S.(1972), Mathematics and Statistics for Economists,Vikas Publications, New Delhi.
  4. Yamane, Taro (1975), Mathematics for Economists, PHI, New Delhi.
  5. Murray S. Speigel, Statistics, Schaum Series
  6. Nabendu Pal & Sahadeb Sarkar, Statistics Concepts and applications
Evaluation Pattern

CIA 1 - 20 MArks

Mid Sem Exam - 50 Marks

CIA 3 - 20 Marks

End Sem Exam - 100 Marks

MEC135 - HISTORY OF ECONOMIC THOUGHT (2022 Batch)

Total Teaching Hours for Semester:60
No of Lecture Hours/Week:4
Max Marks:100
Credits:4

Course Objectives/Course Description

 

This course aims to make students familiar with the famous thinkers and their thoughts that form the basis for current practices and policies; to demonstrate that knowledge is created by the successive building of ideas on earlier ones, and to show how most of the theoretical concepts in economics and policy today have their roots in ideas born centuries before.

Course Outcome

CO 1: Trace the evolution of ideas in economic thought.

CO 2: Connect the ideas in economic thought to current policy and practice.

Unit-1
Teaching Hours:12
Introduction and Economic thought upto Physiocracy
 

Introduction to the study of History of Economic Thought. Introductory Indian and Chinese economic thought - Chanakya on tax administration, Chinese on civil administration and agriculture. Mercantilist thinking - factors responsible for the growth of mercantilist thought, major ideas. Physiocracy - factors responsible for the growth of Physiocracy, major economic ideas, with special reference to Quesnay (origin of the circular flow and microeconomic identity - economic table)

Unit-2
Teaching Hours:12
Classical Economic Thought and its Critique
 

Classical thought - influence of Hutchinson on Smith’s thinking, Smith on value, rent, public finance, institutionalism. Malthus on population and theory of gluts. Ricardo on rent, value, comparative advantage. JS Mill - introduction through Senior, fundamental doctrines, including static state. Frederick List - German criticism of Classicism

 

Unit-3
Teaching Hours:12
Socialist Thought
 

Marx (historical materialism, dialectics, surplus value, capitalist appropriation), post Marxists.Fabian socialists - Robert Owen

Unit-4
Teaching Hours:12
Neo Classical Thought
 

Marginalist school - Bohm Bawerk - origins of marginalism, Walras (general equilibrium), Marshall (economic statics and notion of equilibrium), Edgeworth (2x2 model).

 

Unit-5
Teaching Hours:12
Modern Economic Thinkers
 

Keynes - Monetary equation, General Theory and liquidity preference.  Schumpeter - creative destruction and business cycles.  Rawls – theory of justice.  Amartya Sen - capability approach.

Text Books And Reference Books:

1)      Haney, Lewis H. (1977). History of Economic Thought. New Delhi: Surjeet Publications.

2)      Gide, Charles and Rist, Charles, (2007, Indian Reprint). A History of Economic Doctrines. New Delhi: Surjeet Publications

3)      Screpanti, Ernesto & Zamagni, Stefano. (2006). An Outline of the History of Economic Thought. First Indian Edition, Oxford University Press. 

4)      Heilbroner, Robert L. (1999). The Worldly Philosophers - The Lives, Times, and Idea of the Great Economic Thinkers. Simon and Shuster.

5)      Clarke, J. B. The History of Economic Thought.

6)      Taylor, Overton H.A, (1960) A History of Economic Thought, Mc Graw- Hill.

7)      Roll, Eric, (1940) A History  of Economic Thought, Feber and Feber.

Essential Reading / Recommended Reading

Haney, Lewis H. (1977). History of Economic Thought. New Delhi: Surjeet Publications.

2)      Gide, Charles and Rist, Charles, (2007, Indian Reprint). A History of Economic Doctrines. New Delhi: Surjeet Publications

Evaluation Pattern

CIA - 1 - 20 Marks

CIA - 2: Mid semester examination - 50 hours; Max. Time: 2 hours.

CIA - 3 - 20 Marks

End Semester Exam - 100 marks

MEC141 - APPLIED FINANCIAL ECONOMICS (2022 Batch)

Total Teaching Hours for Semester:60
No of Lecture Hours/Week:4
Max Marks:100
Credits:4

Course Objectives/Course Description

 

Financial economics is the branch of economics concerned with the working of financial markets, such as the stock market and the finances of companies. The course focuses equally on the theoretical framework as well as the practical aspects of the functioning of financial markets. The course is intended to provide an in-depth understanding of the operational issues of the capital and debt market network along with its regulatory framework.

 

Course Outcome

CO1: Compare investment alternatives on key investment attributes.

CO2: Apply compounding and discounting formulae to various situations in finance.

CO3: Deliberate the implications of the efficient market hypothesis for investment analysis.

CO4: Discuss the return generating process and the equilibrium risk-return relationship according to the capital asset pricing model and arbitrage pricing theory.

CO5: Calculate the intrinsic value of a stock using the zero-growth model, the constant growth model, the two-stage growth model, and the H model.

CO6: Estimate the price of a bond and calculate various measures of bond yield.

CO7: Distinguish technical analysis from fundamental analysis.

Unit-1
Teaching Hours:10
Introduction
 

Return and Risk: Historical and Expected; Time Value of Money: Future and Present Value Methods; Newman – Morgenstern Utility Index and Application; Buying and Selling Securities: Oder Size, Time Limit, Types of Orders, Margin Accounts; Financial Markets: Equity Market, Debt Market, Money Market and Derivative Market; Mutual Funds: Open-ended Schemes Versus Closed-ended Schemes; Regulations of Financial Markets in India.

Unit-2
Teaching Hours:5
Efficient Markets, Investment Value and Market Price
 

Fama’s Formulation of Efficient Market Model; Security Price and Random Walk; Testing for Market Efficiency: Event Studies, Looking for Pattern, Examining the Performance; Criticisms and Empirics; Introduction to Behavioral Finance.

Unit-3
Teaching Hours:10
Portfolio Analysis
 

Efficient Set Theorem: Feasible Set, Selection of Optimal Portfolio; Concavity of Efficient Set; The Market Model: Random Error Terms, Graphical Representation, Beta, Actual Returns; Diversification; Markowitz’s Portfolio Approach; New Portfolio Theory; Capital Asset Pricing Model; Arbitrage Pricing Theory; Multi-factor Model; Equity Premium Puzzle; Portfolio Revision.

Unit-4
Teaching Hours:10
The Valuation of Fixed Income Securities
 

Bond Attributes; Bond Prices; Bond Pricing Theorems; Bond Yields: Current Yield, Yield to Maturity, Yield to Call, Realized Yield to Maturity; Risks in Bonds; The Yield Curve; Determinants of Yield Spreads; Bond Portfolio Management: The Passive and Active Strategies. 

Unit-5
Teaching Hours:10
The Valuation of Equity
 

Types of Equity Shares; Free Float Market Capitalization: Sensex and Nifty; Valuation of Preference Shares; Balance Sheet Valuation: Book Value, Liquidation Value, Tobin’s q; Dividend Discount Model: Single and Multi-Period Valuation Models, Zero Growth Model, Constant Growth Model, Two-Stage Growth Model, H-Model; Free Cash Flow Model; Earnings Multiplier Approach; Earnings-Price Ratio, Expected Return and Growth; Forecasting the Aggregate Stock Market Returns.

Unit-6
Teaching Hours:8
Fundamental and Technical Analysis
 

Fundamental Analysis - Top-Down versus Bottom-up Forecasting; Probabilistic Forecasting; Econometric Models; Company Background; Review of Accounts Statements; Ratio Analysis.

Technical Analysis - Dow Theory and its Tenets; Charts: Point and Figure Chart, Line Chart, Candlestick Chart, Bar Chart; Chart Patterns; Trend Analysis; Moving Averages; Limitations of Technical Analysis.  

Unit-7
Teaching Hours:7
Financial Derivative Market
 

Options and Futures; Pricing of Options: Black-Scholes Model and Binomial Option, Pricing Model; Pricing of Futures. 

Text Books And Reference Books:

Donald E. Fischer and Ronald J. Jordan, Security Analysis and Portfolio Management, Prentice Hall India, latest edition.

Prasanna Chandra (2017), Investment Analysis and Portfolio Management,  Tata McGraw Hill Education Private Limited, New Delhi, 5th Edition.

William Sharpe, Gordon Alexander and Jeffery Bailey (2003), Investments, Prentice Hall of India, 6th Edition.

 

Essential Reading / Recommended Reading