Benefits of Choosing Economics Optional 

Challenges of Choosing Economics Optional

1. Economics has a good overlap with General Studies paper III syllabus.

1. Economics requires good conceptual knowledge and numerical ability.

1. It helps in generating good analytical & logical skills. 

2.  It requires extensive reading and  revision of theories, development and trends. 

1. It has a well defined and concise syllabus. 

3. It demands a high level of accuracy and precision in answer writing.

1. It has a clear objective marking scheme reducing subjectivity and bias. 

4. Candidates have to give proper terminologies, diagrams, and should be detail oriented and analytical. 

Economics Optional Syllabus For Paper-1

Subject Title

Sub Topic

Advanced Microeconomics

Marshallian and Walrasian Approach to Price determination.

Alternative Distribution Theories; Ricardo, Kaldor, Kaleeki.

Markets Structure: Monopolistic Competition, Duopoly, Oligopoly.

Modern Welfare Criteria: Pareto Hicks and Scitovsky, Arrow’s Impossibility Theorem, A. K. Sen’s Social Welfare Function.

Advanced Macroeconomics

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.

Money-Banking and Finance

Demand for and Supply of Money

Money Multiplier Quantity Theory of Money (Fisher, Pique, and Friedman)

Keynes’s Theory on Demand for Money,

Goals and Instruments of Monetary Management in Closed and Open Economies.

The relation between the Central Bank and the Treasury.

Proposal for ceiling on the growth rate of money.

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.

International Economics

Old and New theories of International Trade.

Comparative advantage,

Terms of Trade and Offer Curve.

Product Cycle and Strategic Trade Theories.

Trade as an engine of growth and theories of underdevelopment in an open economy.

Forms of Protection:

Tariff and quota.

Balance of Payments Adjustment: Alternative Approaches.

Price versus income, income adjustments under fixed exchange rates.

Theories of Policy Mix.

Exchange rate adjustments under capital mobility.

Floating Rates and their Implications for Developing Countries: Currency Boards.

Trade Policy and Developing Countries.

BOP, adjustments and Policy Coordination in open economy macro-model.

Speculative attacks.

Trade Blocs and Monetary Unions.

WTO: TRIMS, TRIPS, Domestic Measures, Different Rounds of WTO talks.

Growth and Development

Theories of growth

Harrod’s model;

Lewis model of development with surplus labour.

Balanced Unbalanced Growth.

Human Capitals and Economic Growth.

Research and Development and Economic Growth.

Process of Economic Development of less developed countries

Myrdal and Kuzments on economic development and structural change:

Role of Agriculture in Economic Development of less developed countries.

Economic Development and International Trade and Investment, Role of Multinationals.

Planning and Economic Development

Changing role of Markets and Planning,

Private-Public Partnership

Welfare indicators and measures of growth

Human Development Indices.

The basic needs approach.

Development and Environmental Sustainability

Renewable and Non-renewable Resources,

Environmental Degradation,

Intergenerational equity development.

Economics Optional Syllabus For Paper-2

Topic

Sub-Topics

The Pre-Liberalization Era 

• 
  Contribution of Vakil, Gadgil and V.K.R.V. Rao.
• Agriculture : Land Reforms and land tenure system, Green Revolution and capital formation in agriculture.
• Industry Trends in composition and growth, Role of public and private sector, small scale and cottage industries.
• National and Per capita income : Patterns, trends, aggregate and sectoral composition and changes therein.
• Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.

The Post-Liberalization Era 

New Economic Reform and Agriculture 

Agriculture and WTO, 

Food processing, 

Subsidies, 

Agricultural prices and public distribution system, 

Impact of public expenditure on agricultural growth.

New Economic Policy and Industry: 

The strategy of industrialization, 

Privatization, 

Disinvestments, 

Role of foreign direct investment and multinationals.

New Economic Policy and Trade: 

Intellectual property rights: 

Implications of TRIPS, TRIMS, GATS and new EXIM policy.

New Exchange Rate Regime: 

Partial and full convertibility, 

Capital account convertibility.

New Economic Policy and Public Finance: 

Fiscal Responsibility Act, 

the Twelfth Finance Commission and 

Fiscal Federalism and 

Fiscal Consolidation.

New Economic Policy and Monetary System. 

Role of RBI under the new regime.

Planning

From central Planning to indicative planning, 

Relation between planning and markets for growth and decentralized planning : 

73rd and 74th Constitutional amendments.

New Economic Policy and Employment: 

Employment and poverty, 

Rural wages, 

Employment Generation, 

Poverty alleviation schemes, 

New Rural Employment Guarantee Scheme.