Economics- Paper I
- Advanced MicroEconomics:
(a) Marshallian and Walrasian Approaches to Price determination. (b) Alternative Distribution Theories: Ricardo, Kaldor, Kaleeki. (c) Markets Structure: Monopolistic Competition, Duopoly, Oligopoly. (d) Modern Welfare Criteria: Pareto Hicks & Scitovsky, Arrow’s Impossibility Theorem, A.K. Sen’s Social Welfare Function.
- Advanced Macro Economics:
Approaches to Employment Income and Interest Rate determination: Classical, Keynes (IS-LM) curve, Neoclassical synthesis and New classical, Theories of Interest Rate determination and Interest Rate Structure.
- Money – Banking and Finance:
(a) Demand for and Supply of Money: Money Multiplier Quantity Theory of Money (Fisher, Pique, and Friedman) and Keynes 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 a ceiling on the growth rate of money.
(b) Public Finance and its Role in Market Economy: In stabilization of supply, allocation of resources and in distribution and development. Sources of Govt. 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:
(a) Old and New Theories of International Trade
(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 under development in an open economy.
(b) Forms of Protection: Tariff and quota.
(c) The balance of Payments Adjustments: Alternative Approaches.
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:
i) Theories of growth: Harrod’s model,
ii) Lewis model of development with surplus labor,
iii) Balanced and Unbalanced growth,
iv) Human Capital and Economic Growth.
v) Research and Development and Economic Growth
(b) 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.
(c) Economic development and International Trade and Investment, Role of Multinationals.
(d) Planning and Economic Development: changing role of Markets and Planning, Private- Public Partnership.
(e) Welfare indicators and measures of growth – Human Development Indices. The basic needs approach.
(f) Development and Environmental Sustainability – Renewable and Non-Renewable Resources, Environmental Degradation, Intergenerational equity development.
Economics Syllabus Paper- II
- 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) The 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 the public and private sector, Small scale, and cottage industries.
(iv) National and Per capita income: patterns, trends, aggregate and Sectoral composition and changes there in.
(v) 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.
- Microeconomics – Hal r Varian
- Macroeconomics – Dornbusch and Fischer
- Public economics – Musgrave.
- International economics – Paul Krugman
- Growth and development – Debraj ray (it’s explains the theories in a lucid manner).
- Money – Delhi University reading.
- For paper 1, Book for UGC Net examination which covers master level course very briefly for revision
- Paper 2 – Basics – Mishra and Puri
- Pre independence – TK Roy and other articles from Delhi University reading on Indian Economic history.
- Post liberalisation – apart from above books, recent years largely from EPW articles, newspapers and lots of internet surfing.
- Indian Economy – Performance and Policies – Uma Kapila
- Hindu, Economic Times and EPW for a critical perspective
- Economic Survey
- India Year Book
- Indian Economy – Mishra and Puri
- The Hindu: Survey of Agriculture & Survey of Industry
Optional Notes: Available under mentorship Program.
The subject is technical and at the same time it is equally relevant in current times.
A logical and rational subject and one can easily understand the subject.
Overlaps and covers almost 50-60% syllabus of GS Paper 3.
Covers around 20-30 marks in GS Paper 1 in UPSC prelims.
Study material is readily available in the market for reference.
- Without much of economics background, it can be a little tricky to complete the entire syllabus and have a comprehensive understanding.
- One needs to be good with graphs as one can encounter a lot of them during the preparation. But once a student has a good hang of it, he/she can score marks easily.
- Having a good hold of Mathematics can prove to be very useful. Hence this acts as a point of caution.
- Though a lot of study material is readily available in the market for reference, one should be prepared for self study through multiple books.
How to prepare:
- Write important 2-3 assumptions before explaining/ talking about any model.
- For paper 1, it is better if you are able to revise the models 2-3 times as you will get greater clarity each time you revise.
- There are some topics like Role of central Bank or instruments of monetary policy which appear quite frequently. Select these and prepare your answers.
- I revised International Trade and Macroeconomics more than other topics as questions are more predictable from here and we end up attempting these questions only.
- Practice diagrams, graphs and figures. If a model has a figure, i think there are no marks without it.
- I attempted Q6 in Paper 1 (CSE 2016). There were 2 questions which required proofs. I think it is better to attempt these if you can as they may fetch you more marks if done correctly.
- E survey needs to be covered for current issues and latest data
- I read a Business newspaper for current issues. It is helpful as one can quote economists who have written articles. Also they relate the issue with the economic theories.
- Check RBI speeches and NITI aayog websites for relevant articles
- You may find understanding my notes a bit difficult. The purpose is to tell the areas where I focussed. So you can make your own notes as per your need.
- Prepare notes for each and every word written in the syllabus. If the entire topic is at one place in the book, underlining and highlighting in the book itself is fine.
- If you have covered the entire syllabus at least once 1-1.5 months before the Mains, then you are well prepared. You can set such a target for yourself.
- When Mains are 1-1.5 months away, attempt previous year papers, at least from 2011-2016. Every Sunday I used to give both the papers in a simulated environment (from 9am-12pm and 2-5pm). Then I used to check and improve my answers on the same day. Since the previous year questions are bound to repeat, it is quite beneficial.
- You can see previous year papers while preparing each topic as it will give you an idea as to what are the important sections.
- For every topic and sub topic in the syllabus, have some diagrams/ graphs/ pie charts/ flowcharts etc ready. I also mugged up important economists’ names and their viewpoint for each topic/ sub topic. You can see that in my notes also. Similarly mug up important statistics.
- When you cover current economic topics for GS3, make sure you go a step ahead by incorporating economists’ names and their viewpoints as well as relevant data.
Previous Year Question Papers:
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