Indian Economic Service Indian Statistical Service – IES ISS Exam 2018 Syllabus for General Economics
Section – II
Standard and Syllabi for IES ISS Exam 2018
The standard of papers in General English and General Studies will be such as may be expected of a graduate of an Indian University.
The standard of papers in the other subjects will be that of the Master’s degree examination of an Indian University in the relevant disciplines. The candidates will be expected to illustrate theory by facts, and to analyse problems with the help of theory. They will be expected to be particularly conversant with Indian problems in the field(s) of Economics / Statistics.
Candidates will be required to write an essay in English. Other questions will be designed to test their understanding of English and workman like use of words. Passages will usually be set for summary or precis.
General Knowledge including knowledge of current events and of such matters of every day observation and experience in their scientific aspects as may be expected of an educated person who has not made a special study of any scientific subject.
The paper will also include questions on Indian Polity including the political system and the Constitution of India, History of India and Geography of a nature which a candidate should be able to answer without special study.
General Economics – I
Part A :
- Theory of Consumer’s Demand : Cardinal utility Analysis; Marginal utility and demand, Consumer’s surplus, Indifference curve, Analysis and utility function, Price income and substitution effects, Slutsky theorem and derivation of demand curve, Revealed preference theory. Duality and indirect utility function and expenditure function, Choice under risk and uncertainty. Simple games of complete information, Concept of Nash equilibrium.
- Theory of Production : Factors of production and production function. Forms of Production Functions : Cobb – Douglas, CES and Fixed coefficient type, Translog production function. Laws of return, Returns to scale and Return to factors of production. Duality and cost function, Measures of productive efficiency of firms, technical and allocative efficiency. Partial Equilibrium versus General Equilibrium approach. Equilibrium of the firm and industry.
- Theory of Value : Pricing under different market structures, public sector pricing, marginal cost pricing, peak load pricing, cross-subsidy free pricing and average cost pricing. Marshallian and Walrasian stability analysis. Pricing with incomplete information and moral hazard problems.
- Theory of Distribution : Neo classical distribution theories; Marginal productivity theory of determination of factor prices, Factor shares and adding up problems. Euler’s theorem, Pricing of factors under imperfect competition, monopoly and bilateral monopoly. Macro – distribution theories of Ricardo, Marx, Kaldor, Kalecki.
- Welfare Economics : Inter-personal comparison and aggregation problem, Public goods and externalities, Divergence between social and private welfare, compensation principle. Pareto optimality. Social choice and other recent schools, including Coase and Sen.
Part B : Quantitative Methods in Economics
- Mathematical Methods in Economics : Differentiation and Integration and their application in economics. Optimisation techniques, Sets, Matrices and their application in economics. Linear algebra and Linear programming in economics and Input-output model of Leontief.
- Statistical and Econometric Methods : Measures of central tendency and dispersions, Correlation and Regression. Time series. Index numbers. Sampling of curves based on various linear and non-linear function. Least square methods and other multivariate analysis ( only concepts and interpretation of results ). Analysis of Variance, Factor analysis, Principle component analysis, Discriminant analysis. Income distribution : Pareto law of Distribution, longnormal distribution, measurement of income inequality. Lorenz curve and Gini coefficient. Univariate and multivariate regression analysis. Problems and remedies of Hetroscedasticity, Autocorrelation and Multicollnearity.
General Economics – II
- Economic Thought : Mercantilism Physiocrats, Classical, Marxist, Neo-classical, Keynesian and Monetarist schools of thought.
- Concept of National Income and Social Accounting : Measurement of National Income, Inter relationship between three measures of national income in the presence of the Government sector and International transactions. Environmental considerations, Green national income.
- Theory of employment, Output, Inflation, Money and Finance : The Classical theory of Employment and Output and Neo classical approaches. Equilibrium, analysis under classical and neo classical analysis. Keynesian theory of Employment and output. Post Keynesian developments. The inflationary gap; Demand pull versus cost push inflation, the Philip’s curve and its policy implication. Classical theory on Money, Quantity theory of Money. Friedman’s restatement of the quantity theory, the neutrality of money. The supply and demand for loanable funds and equilibrium in financial markets, Keynes’ theory on demand for money. IS-LM Model and AD-AS Model in Keynesian Theory.
- Financial and Capital Market : Finance and economic development, financial markets, stock market, gift market, banking and insurance. Equity markets, Role of Primary and Secondary markets and efficiency, Derivatives markets; Futures and options.
- Economic Growth and Development : Concepts of Economic Growth and Development and their measurement : characteristics of less developed countries and obstacles to their development – growth, poverty and income distribution. Theories of growth : Classical Approach : Adam Smith, Marx and Schumpeter – Neo classical approach; Robinson, Solow, Kaldor and Harrod Domar. Theories of Economic Development, Rostow, Rosenstein-Roden, Nurske, Hirschman, Leibenstien and Arthur Lewis, Amin and Frank ( Dependency scool ) respective role of state and the market. Utilitarian and Welfarist approach to social development and A.K. Sen’s critique. Sen’s capability approach to economic development. The Human Development Index. Physical quality of Life Index and Human Poverty Index. Basics of Endogenous Growth Theory.
- International Economics : Gains from International Trade, Terms of Trade, policy, international trade and economic development – Theories of Internal Trade; Ricardo, Haberler, Heckscher – Ohlin and Stopler – Samuelson – Theory of Tariffs – Regional Trade Arrangements. ASEAN Crisis of 1997, Global Financial Crisis of 2008 and Euro Zone Crisis – Causes and Impact.
- Balance of Payments : Disequilibrium in Balance of Payments, Mechanism of Adjustments, Foreign Trade Multiplier, Exchange Rates, Import and Exchange Controls and Multiple Exchange Rates. IS-LM Model and Mundell-Fleming Model of Balance of Payments.
- Global Institutions : UN agencies dealing with economic aspects, World Bank, IMF and WTO, Multinational Corporations. G-20.
General Economics – III
- Public Finance : Theories of Taxation : Optimal taxes and tax reforms, incidence of taxation; Theories of public expenditure : objectives and effects of public expenditure, public expenditure policy and social cost benefit analysis, criteria of public investment decisions, social rate of discount, shadow prices of investment, unskilled labour and foreign exchange. Budgetary deficits. Theory of public debt management.
- Environmental Economics : Environmentally Sustainable development, Rio process 1992 to 2012, Green GDP, UN Methodology of Integrated Environmental and Economic Accounting. Environmental Values : Users and Non – Users values; option value. Valuation Methods : Stated and revealed preference methods. Design of Environmental Policy Instruments : Pollution Taxes and Pollution permits, collective action and informal regulation by local communities. Theories of exhaustible and renewable resources. International environmental agreements, RIO Conventions. Climatic change problems. Kyoto protocol, UNFCC, Bali Action Plan, post 2017 agreements, tradable permits and carbon taxes. Carbon Markets and Market Mechanisms. Climate Change Finance and Green Climate Fund.
- Industrial Economics : Market structure, conduct and performance of firms, product differentiation and market concentration, monopolistic price theory and oligopolistic interdependence and pricing, entry preventing pricing, micro level investment decisions and the behavior of firms, research and development and innovation, market structure and profitability, public policy and development of firms.
- State, Market and Planning : Planning in a developing economy. Planning regulation and market. Indicative Planning. Decentralised Planning.