ADVANCED MICROECONOMICS

Level M.Phil                                                              3 Credit Hours

Code: 2700

UNIT NO.1    CONSUMER DEMAND FUNCTIONS

• Utility Maximization
• Interpretation of Lagrange Multiplier, Roy’s Identity
• The Relationship between the Utility Maximization and Cost Minimization Models
• The Derivation of Slutsky Equation
• Derivation of Compensated Demand Curve

UNIT.NO.2    THEORY OF PRODUCTION

• Production Processes and Production Functions
• Rigid and Flexible, Homogeneous and Homothetic Production functions
• Elasticity of Substitution: ECS Production Function
• The Duality of Production Function

UNIT.NO.3    THEORY OF COST

• Long-run vs. Short-run Cost and their Relationships
• The Duality of Cost Functions
• The Generalized Leontief Cost Function

UNIT.NO.4    MARKET STRUCTURE AND THEORY OF FIRM-I

• Competitive Market: Short-run Supply, Long-run supply, Industry Supply Function, Market Equilibrium

• Monopoly: Monopoly Price and Output, Price Discrimination, Multi Plant Monopoly, Regulated Monopoly

UNIT NO.5. MARKET STRUCTURE AND THEORY OF FIRM-II

• Oligopoly: Cartels and the Cournot-Nash Equilibrium, Collusion as a Nash Equilibrium, Repeated oligopoly games, Stackelberg Equilibrium, Bertraind Equilibrium.

• Bargaining: The Alternating Offers Bargaining Game, Incomplete Information Bargaining

UNIT NO.6. OPTIMIZATION OVER TIME

• Optimization in the Bond Market/Market Rate of Return/Discount Rates and Present Values
• Multi-period Consumption
• Investment Theory of the Firm

UNIT NO.7    UNCERTAINTY

• Expected Utility
• The Problem of Choice in Situations Involving Risk
• Risk and Insurance

UNIT NO.8    GENERAL EQUILIBRIUM

• Consumption without Production (Pure exchange)
• Production without Consumption: One-Sector Model
• Production and Computation: Two-Sector Model
• General Equilibrium in Production and Consumption

UNIT NO.9. WELFARE ECONOMICS

• Society’s Economic Problem
• Social Justice and Social Optimum
• Capitalism, Market failure, and Alternative Economic Systems
• Criteria for a Welfare Improvement
• The Measurement of Welfare Cost
• Trade off between Equity-Efficiency and Social Welfare Function

RECOMMENDED BOOKS

Walter Nicholson., and Christopher Snyder: Microeconomic Theory: Basic Principles &                        Extensions: South Western, Cengage Learning (Latest Edition)

Layard, P.R.G., and Walter, A.A. Microeconomic Theory: McGraw-Hill (Latest Edition).

Silberberg, E. The Structure of Economics: A Mathematical Analysis: McGraw- Hill (Latest Edition).

Varian, H.R. Microeconomic Analysis: Norton (Latest Edition).

Henderson and Quant: Microeconomic Theory: A Mathematical Approach: (Latest Edition).

McKanna, C., J., and Rees, R. Economics: A Mathematical Introduction: Oxford University Press (Latest Edition).

ADVANCED MACROECONOMICS

Level M.Phil                                                              3 Credit Hours

Code: 2701

UNIT NO.1    REAL BUSINESS CYCLE THEORY

• Some Facts about Economic Fluctuations
• Theories of Fluctuations
• A Baseline Real-business-Cycle Model
• Limitations and Extensions of the Model

UNIT NO.2    TRADITIONAL KEYNESIAN THEORIES OF FLUCTUATIONS

• Review of Traditional Keynesian Model of Aggregate Demand
• The Open Economy.
• Alternative Assumptions of Wage and Price Rigidity.
• Trade Off between Output-inflation
• The Cyclical Behaviour of the Real Wage

UNIT NO.3    NEW KEYNESIAN ECONOMICS

• General Considerations of Small Frictions in Wages
• The Need for Real Rigidity
• Real Non-Walrasian Theories with Limitations

UNIT NO.4    CONSUMPTION

• Consumption Under Certainty: Various Consumption Hypothesis
• Consumption Under uncertainty: The Random Walk Hypothesis
• The Interest Rate and Saving
• Consumption and Risky Assets

UNIT NO.5. INVESTMENT

• Investment and the Cost of Capital
• A Model of investment with Adjustment Cost
• Analysis of Investment Model and its Implications
• Financial-market Imperfection

UNIT NO.6    UNEMPLOYMENT

• Theories of Unemployment
• A Generic Efficiency-Wage Model
• A General Version of efficiency-Wage Model

ISSUE IN DEVELOPMENT ECONOMICS

Level: M.Phil                                                             3 Credit Hours

Code: 2704

UNIT NO.1    INTRODUCTION TO DEVELOPMENT ECONOMICS

• Definition of Development Economics
• Brief History of Development Economics
• An Overview of Theories of Economic Growth and Development
• Difference between Economic Growth and Development
• Evolution of Measures of Development Economics

UNIT NO.2    HUMAN CAPITAL AND ECONOMIC DEVELOPMENT

• The Role of Human Capital in Economic Development
• Education Investment and Returns
• Impact of education on Development Economics
• Society and Development: Some major issues

UNIT NO.3    INCOME DISTRIBUTION AND ECONOMIC DEVELOPMENT

• Impact of Development on Income Distribution
• Economic Growth and Income Inequality
• Inequality, Poverty and Development
• Growth with Income Distribution
• The U Hypothesis Relating Income Inequality and Economic Development
• The Impact of Income Distribution on Development

UNIT NO.4    AGRICULTURE AND RURAL DEVELOPMENT

• Agriculture as a Pre-condition to Economic Development
• Critical Appraisal of Agricultural Policies
• Designs of Agricultural Development Strategies
• Role of Argo-based Industries in Rural Development
• A comparison of Rural Credit Markets and Institutions in the International context
• Importance of Community Based Organizations in Rural Development

UNIT NO.5    INDUSTRIALIZATION AND ECONOMIC DEVELOPMENT

• The Role and Importance of Industry in Economic Development
• The Industrialization Strategies of Economic Development
• Nature of Inter-sectoral Relationship during the process of Industrialization: Agriculture vs Industry, Light vs Heavy Industry, Consumer vs Produced goods Industry.

UNIT NO.6    MIGRATION AND URBAN INFORMAL SECTOR

• The Evolving View of Urban Underemployment
• The Informal Sector and their Connection with Rural-Urban Migration
• Urban Growth in Developing Countries: A Demographic Reappraisal
• Economic Development with Unlimited Supplies of Labor
• A Model of Labor Migration and Urban Unemployment in Less Developed Countries
• Various Views of Underemployment in Less Developed Countries

UNIT NO.7    FINANCING OF ECONOMIC DEVELOPMENT

• The Political Economy of Foreign Aid
• The Evolution of Trade or Aid Philosophy
• Bilateral and Multilateral Aid
• Forms and Volume of Foreign Aid
• Economic Impact of Aid on the Recipient Country
• Debate on the Debt and Debt Servicing Problem of Developing Countries

UNIT NO.8    DEVELOPMENT AND ENVIRONMENT

• Environmental Problems in the Developed and Developing Countries
• North-South Trade and the Global Environment
• Impact of International Trade on the Environment in Developing Countries
• Determinants of Pollution Abatement in Developing Countries
• Sustainable Development: Ecology and Economic Progress

UNIT NO.9    THE STATE AND ECONOMIC DEVELOPMENT

• The Role of State in Economic Development
• The Need of Balanced Growth with the Development of Social Sectors
• Basic Need and the Role of State in Development
• The Political Economy of Rent Seeking Society
• The Relationship Between Rent Seeking and Corruption
• The Role of State for Institution Building Economic
• Performance, Market a Imperfection, Public vs Private Sectors, etc.

REFERENCE

Gerald M. Meier and James E. Rauch, (2000), Leading Issues in Economic Development Latest Edition

Todaro P. Michael, Economic Development Latest Edition

Brenner, Y.S, Theories of Economic Development and Growth, New York, Latest Edition

Bruee Herrick Charles P. Kidleberger, Economic Development, McGrow-Hill, latest Edition

Evereth E. Hagen, The Economics of Development, Richard D. Irwin Inc. Latest Edition

Hirschman, Albert, The Strategy of Economics Development, Yale University Press, Latest Edition

Ray, D. (1998). Development Economics. Princeton University Press. (Latest Edition)

1.     Thirlwall, A. P. (1989). Growth and Development: with Special Reference to Developing Economies. Springer.) Latest Edition.

INTERNATIONAL TRADE THEORY AND POLICY (2705)

Unit 1: Introduction

            1.1       The Globalization of the World Economy 

            1.2       International Trade and the Nation’s Standard of Living

            1.3       The International Flow of Labor and Capital 

            1.4       Purpose of International Economic Theories and Policies

            1.5       The Subject Matter of International Economics

            1.6       :

Unit 2: The Laws of Absolute and Comparative Advantage

            2.1       The Mercantilists’ Views on Trade

            2.2       Trade Based on Absolute Advantage: Adam Smith

            2.3       Trade Based on Comparative Advantage: David Ricardo

Unit 3: The Standard Theory of International Trade

            3.1       The Production Frontier with Increasing Costs

            3.3       Community Indifference Curves

            3.4       Equilibrium in Isolation

            3.5       The Basis for and the Gains from Trade with Increasing Costs

Unit 4: Demand and Supply, Offer Curves, and the Terms of Trade

4.1       Offer Curves: Origin and Definition of Offer Curves. Derivation and Shape of

                        the Offer Curve of Nation 1 and 2.

4.2       The Equilibrium-Relative Commodity Price with Trade—General Equilibrium           Analysis. 9

4.3       Relationship between General and Partial Equilibrium Analyses.

4.6       The Terms of Trade- Definition and Measurement of the Terms of Trade

Unit 5: Factor Endowments and the Heckscher–Ohlin Theory

5.1       Assumptions of the Theory

5.2       Factor Intensity, Factor Abundance, and the Shape of the Production Frontier

5.3       Factor Endowments and the Heckscher–Ohlin Theory

5.4       Factor–Price Equalization and Income Distribution

5.5       Empirical Tests of the Heckscher–Ohlin Model— The Leontief Paradox and

             O        there Empirical Tests of the H–O Model

Unit 6: Economies of Scale, Imperfect Competition, Technology, and International Trade

6.1       Economies of Scale and International Trade

6.2       Imperfect Competition and International Trade

6.3       Trade Based on Dynamic Technological Differences

6.4       Costs of Transportation, Environmental Standards, and International Trade

6.5       From Comparative to Competitive Advantage

Unit 7: Economic Growth and International Trade

7.1       Technical Progress- Neutral, Labor-Saving, and Capital-Saving Technical Progress

7.2       Growth and Trade: The Small-Country Case

7.3       Growth and Trade: The Large-Country Case

7.4       Growth, Change in Tastes, and Trade in Both Nations

Unit 8: Trade Restrictions: Tariffs and Non-Tariff Trade Barriers

8.1       Partial Equilibrium Analysis of a Tariff

8.2       The Theory of Tariff Structure- The Rate of Effective Protection, Generalization

                         and Evaluation of the Theory of Effective Protection

8.3       General Equilibrium Analysis of a Tariff in a Small and Large Country

8.4       The Optimum Tariff

8.5       Import Quota

8.6       Other Nontariff Barriers and the New Protectionism

Unit 9: Globalization and E- Trade

9.1       Globalization and international trade

9.2       E-trade and sustainable development in international trade.

9.3       importance of e-commerce in international services.

9.4       E-trade and inclusive growth and development.

9.5       Globalizing Electronic World Trade Platform.

9.6       Standard Steps of Policy Formulation.

Bibliography

1. Alam, M. H. (2019). Impact of E-Trade: From International Trade Law Perspective. European Journal of Engineering and Technology Research, 4(9), 174-176.Ahi, A. A., Sinkovics, N., & Sinkovics, R. R. (2023). E-commerce policy and the global economy: A path to more inclusive development? Management International Review, 63(1), 27-56.
2. Borchert, I., & Yotov, Y. V. (2017). Distance, globalization, and international trade. Economics letters, 153, 32-38
3. Capineri, C., & Leinbach, T. R. (2004). Globalization, e‐economy and trade. Transport Reviews, 24(6), 645-663.
4. Chacholiades, M. (1978). International trade theory and policy. (No Title).

UNIT NO.7    DATA PROCESSING

• Introduction
• Editing & coding
• Tabulation and graphics
• Analysis of the data and graphics

UNIT NO.8    RESEARCH FINDING AND REPORT WRITING

• Components of Research report: introduction, methodology, findings, conclusions, appendices, bibliography.
• Basic principles of report writing

UNIT NO.9    COMPUTER APPLICATIONS

• Computer Orientation
• MS Word
• EXCEL
• SPSS (Statistical Package)

SUGGESTED BOOKS

Donald R. Cooper. C. William Emory, Business Research Methods. National Book Foundation, Islamabad, (Latest Edition).

Bailey, Kenneth, D. Methods of Social Research, the Free Press, London 1998.

Paul, D. Leedy, Practical research planning & design Macmillan Publishing Cop. New York (Latest Edition).

Singleton &Straits, “Approaches to Social Research” Latest Edition, Oxford University Press

Kothary C.R. “Research Methodology” Latest Edition

Keith F, Punch, “Introduction to Social Research: Quantitative and Qualitative Approaches” Latest Edition, Sage Publication

Uma Sekaran & Roger Bougie, “Research Methods for Business: A Skill Building Approach” Latest Edition.

APPLIED ECONOMETRICS

Level: M.Phil                                                             Credit Hours: 3

Code: 2703

UNIT NO.1    ORDINARY LEAST SQUARES (OLS) METHODS

• OLS estimators, assumptions and their properties, goodness of fit statistical inference.

UNIT NO.2     ESTIMATION OF GENERALIZED LEAST SQUARES METHOD

• Estimation under Heteroscedasticity and Autocorrelation
• Pooling of Cross-section and Time-series Data
• Seemingly Unrelated Regressions (SUR)

UNIT NO.3. SIMULTANEOUS EQUATIONS SYSTEM

• Structural model vs. reduced form models. Identification problem and methods of identification. Single-equation vs. system equation estimation methods

UNIT NO.4    REGRESSION WITH QUALITATIVE VARIABLES

• Dummy variables, structural shifts, seasonality, limited dependent variables, duration models
• Models with Qualitative Explanatory Variables
• Models with Qualitative Dependent Variables

UNIT NO.5    DISTRIBUTED LAG MODELS

• Koyck Transformation
• Rational Expectations

UNIT NO.6    NONLINEAR EQUATIONS

• Methods of estimating nonlinear econometric equations and testing nonlinear parametric restrictions

UNIT NO.7    TOPIC IN TIME SERIES ECONOMETRICS

• Distributed lags, AR, MA, ARIMA models, causality, ARCH model, stationary and co-integration and error correction

ENVIRONMENTAL ECONOMICS

Level: M.Phil                                                 Credit Hours: 3 Code: 2706

UNIT NO.1    INTRODUCTION TO ENVIRONMENTAL ECONOMICS

• Definition of Environmental Economics.
• The Economic Approach
• The Design of Environmental Policy
• Cost Benefit Analysis
• Economics and Politics
• The Economy and the Environment

UNIT NO.2    ANALYTICAL TOOLS

• Benefits and Costs, Supply and Demand
• Aggregate Demand/Willingness to Pay
• Marginal Cost and Supply
• Economic Efficiency and Markets
• Efficiency and Equity
• Markets and Social Efficiency
• Pollution Control – a General Model
• Application of Equimarginal Principle to Emission and Reductions
• Long-Run Sustainability

UNIT NO.3    ENVIRONMENTAL ANALYSIS

• Frameworks of Analysis
• Benefit-Cost Analysis: Benefits
• Cost-Benefit Analysis: Costs

UNIT NO.4    ENVIRONMENTAL POLICY ANALYSIS

• Criteria for Evaluating Environmental Polices
• Decentralized Policies: Liability Laws, Property Rights, Moral Suasion

UNIT NO.5    STRATEGIES FOR POLICY ANALYSIS

• Command and Control Strategies
• Incentive-based Strategies

UNIT NO.6    ENVIRONMENTAL POLICIES IN THE DEVELOPED AND DEVELOPING COUNTRIES

• International Comparisons of Environmental Quality
• Environmental Policy in Developed, Developing and Socialist Countries

UNIT NO.7    ECONOMIC DEVELOPMENT AND THE ENVIRONMENT

• General Considerations
• Environmental Degradation in Developing Economics
• Economy and Environment
• The Pollution – Haven Hypothesis
• Environmental Policy Choices in Developing Countries
• The Role of the Developed Countries

UNIT NO.8    THE GLOBAL ENVIRONMENT AND INTERNATIONAL AGREEMENTS

• Ozone Depletion
• Global Warming
• Biological Diversity
• General Issues
• The Economics of International Agreements
• International Trade and the Environment

UNIT NO.9    SUSTAINABLE DEVELOPMENT AND ENVIRONMENTAL POLICY IN PAKISTAN

• Indicators of Sustainable Development
• An Overview of Environmental Policy of Pakistan

BASIC TEXT BOOKS

Barry C. Field, (Latest Edition) “Environmental Economics” An Introduction McGraw-  Hill International Editions New York.

Eban S. Goodstein, (Latest Edition) “Economics and the Environment”      PRINTICE HALL, Upper Saddle River, New Jersey 07458.

Tom Tietenberg, (Latest Edition) “Environmental Economics and Policy, ADDITION-WESLEY.

Scott J. Callan, janet M. Thomas, (Latest Edition) “Environmental Economics & Management, IRWIN.

MONETARY ECONOMICS

Level: M.Phil                                                 Credit Hours:     3 Code: 2708

UNIT NO.1    INTRODUCTION

• Definitions Forms and Functions of Money
• Measurement of Money
• Evolution of Money and Payment System

UNIT NO.2    THE SUPPLY AND DEMAND FOR MONEY

• Demand for Money
• Models of Demand for Money
• The Mckinnon-Shaw Hypotheses of Financial Repression in less Developed Countries and Cagan’s Demand for Money Model for Hyperinflation countries
• Currency Substation and Demand for Money
• The Money Supply Process
• The Monetary Base Approach and the new View of the Determination of the Money Supply Process
• An Overview of Empirical Evidence on Money Demand Function and Supply of Money in Pakistan

UNIT NO.3    FINANCIAL MARKETS AND SOME RELATED HYPOTHESES

• Financial Markets, Primary Markets, Secondary, Markets, Money Markets, Capital Markets, Derivative Products and Derivative Markets.
• The Markowiz’s Portfolio Selection and Asset Pricing Models of Capital Markets.
• The Fisher and Fama Hypotheses of Efficient Capital Markets.
• The Covered Interest Parity, Uncovered Interest Parity and Real Interest Parity Hypothesis of Efficient Global Money Market.
• The Unbiased Efficiency Hypothesis of Efficient Foreign Exchange Market.

UNIT NO.4. MONEY IN MACROECONOMIC MODELS

• Money in the Classical, Keynesian and Monetarist Macroeconomic Models.
• The Transmission Mechanism of Money
• Causality Between Money, Income, Prices and Interest Rates.

UNIT NO.5    INFLATION

• Inflation: Definition and Measurement.
• Inflation and Expectation
• The Phillips Curve and the Natural Rate Hypothesis.
• The Monetarist vs. Structuralist Approaches to Inflation
• Overview or Empirical Evidence on a Variety of Inflation Models in Pakistan

UNIT NO.6. MONETARY POLICY IN A CLOSED ECONOMY

• The Objectives and Instruments of the Monetary Policy
• The Role of Monetary Policy
• Need for a New Agenda of Monetary Policy
• Pakistan’s Experience in Conduct of the Monetary Policy

UNIT NO.7    MONETARY POLICY IN AN OPEN ECONOMY

• Internal and External Balance
• The Policy Assignment Problem and the Principle of Effective Market Classification
• The Effectiveness of Monetary Policy under Different Exchange-rate Regimes and Capital Mobility Scenarios.

UNIT NO.8. BALANCE OF PAYMENTS, FOREIGN EXCHANGE MARKETS AND CRISES

• The Relationship Between Balance of Payments and Foreign Exchange Markets.
• Elasticity, Absorption and Monetary Approaches to the Balance of Payments and Empirical Evidence on them.
• Models of Balance of Payments and Currency Crisis. Financial Crisis in Asian Countries.

UNIT NO.9    PRACTICES OF MONETARY POLICY IN PAKISTAN

• Monetary System in Pakistan
• Role of State Bank of Pakistan in Formulation and Implementation of Monetary Policy in Pakistan
• A Study of Inflation in Pakistan
• Macro Economic Objectives and Role of Monetary Policy

TEXT BOOK

C. Mishkin F.F. The Economics of Money, Banking, and Financial Markets. Scott, Foreman and Company, London. (Latest Edition).

Ritter, L.S. and Peterson, R. L. Financial Institution and Financial Markets. New York. Basic Books, (Latest Edition)

Habbard, G.R. Money, The Financial System and the Economy. (Latest Edition). Addison-Wesley, New York.

Harris, L. Monetary Theory, New York: McGraw-Hill, (Latest Edition).

Pierce, D.G. and Shaw, D.M. Monetary Economics. London: Butter Worth, (Latest Edition).