Himachal Pradesh Public Service Commission
SET: Economics (Code-19)
1. Micro-economic Analysis Demand analysis-Marshallian, Hicksian and
Revealed preference approaches Theory of Producion and Costs Pricing and output
under different forms of market structure Factor Pricing analysis Elements of
general equilibrium and new welfare economics
2. Macro-economic Analysis Determination of output and
employment-Classical approach, Keynesian approach, Consumption hypotheses Demand
for Money-Fisher and Cambridge versions, Approaches of keynesian, Friendman,
Patinkin, Baumol and Tobin Supply of Money, Determinants of money supply,
High-powered money, Money multiplier.
Phillips Curve analysis Business cycles- Models of samuelson, Hicks and
Kaldor. Macroeconomic Equilibrium-Relative roles of monetary and fiscal
3. Development and Planning:
Economic Growth, Economic Development and sustainable Development-Importance
of institutions-Government and markets- Perpetuation of underdevelopment-Vicious
circle of poverty, circular causation, structural view of underdevelopment-
Measurement of development, conventional, HDI and quality of life indices.
Theories of Development-Classical, Marx and Schumpeter; Economic Growth-Harrod-
Domar model, instability of equilibrium, Neoclassical growth-Solow's model,
steady state growth. Approaches to development : Balanced growth, critical
minimum effort, big push, unlimited supply of labour, unbalanced growth, low
income equilibrium trap.
Indicators and measurement of poverty.
Importance of agriculture and industry in economic development-choice of
techniques and appropriate technology-Investment criteria-Elementary idea of
cost- enefit analysis.
Trade and Aid-International trade as `engine of growth'- Globalization and
Objectives and role of monetary and fiscal policies in economic development.
Techniques of planning; Plan Models in India; planning in a market-oriented
4. Public Finance
Role of the Government in Economic activity-Allocation, distribution and
stabilization functions; Private, Public and Merit goods.
The Public Budgets-Kinds of Budgets, Zero-base budgeting, different concepts
of budget deficits; Budgets of the Union Government in India.
Public Expenditure-Hypotheses; effects and evaluation.
Public Revenue-Different approaches to the division of tax burden, incidence
and effects of taxation; elasticity and buoyancy; taxable capacity.
Public Debt-Sources, effects, burden and its management. Fiscal
Federalism-Theory and problems; Problems of Centre-State Financial relations in
Fiscal Policy-Neutral and compensatory and functional finance; balanced
5. International Economics
Theories of International trade : Empirical verification and Relevance.
International Trade under Imperfect competition.
Terms of Trade and Economic Growth -Secular.
Deterioration of Terms of Trade Hypothesis-a critical review.
Equilibrium/disequilibrium in Balance of Payment-Traditional, Absorption and
Monetary approaches for adjustment in the Balance of Payments, Foreign Trade
Impact of Tariffs, Partial and General equilibrium analysis; Political
economy of Non-Tariff Barriers.
Theory of regionalism at Global level-Collapse of Bretton- Wood System-Recent
Monetary reforms. Trade Policy and Reforms in India.
6. Indian Economy
Basis Economic indicator-National income, performance of different sectors.
Trends in prices and money supply.
Agriculture-Institutional and technological aspects, new agricultural policy.
Industry-New industrial policy and liberalization.
Money and banking-Concepts of money supply, inflation, monetary policy and
financial sector reforms.
Public finance-Trends in revenue and expenditures of the Central and State
Government, Public debt; analysis of the Union Budget.
Foreign trade-Trends, Balance of payments and trade reforms.
Poverty, unemployment, migration and environment.
7. Statistical Methods.
Measures of Central tendency, dispersion, skewness and kurtosis.
Elementary theory of probability-Binomial, Poisson and Normal distributions.
Simple correlation and regression analysis.
Statistical inferences- pplication, sampling distributions (t,x2 and F
tests), sampling of attributes, testing of Hypothesis.
Index numbers and time series analysis.
Sampling and census methods, types of sampling and errors.
PAPER-III (A) (CORE GROUP)
- Theory of Demand-Axiomatic approach, Demand functions, Consumer
behaviour under conditions of uncertainty.
- Theory of production.
- Collusive and non-collusive oligopolies.
- Different models of objectives of the firm -Baumol, Morris and
Williamson Factor pricing.
- General equilibrium and Welfare Economics.
- Keynesian and post-Keynesian approaches to theory of output and
employment; concept of investment multiplier; consumption hypotheses.
- Theories of investment and accelerator .
- Theories of demand for money -Keynesian and post-Keynesian.
- Different approaches to money supply; money supply; components and
determinant; money multiplier.
- Output -price determination (aggregate supply and aggregate demand curve
- Fleming-Mundell open economy model.
- Development and Growth-Role-of institutions.
- Theories of growth and development-Models of growth of Joan Robinson and
Kaldor; Technical Progress-Hicks, Harrod and learning by doing, production
function approach to the determinants of growth: Endogenous growth : role of
education, research and knowledge-explanation of cross country differentials
in economic development and growth.
- Theories of development-Classical, Marx, Schumpeter and structural
analysis of development-Imperfect market paradigm, Lewis model of
development, Ranis-Fei model, Dependency theory of development.
- Factors in economy development-natural resources,population, capital,
Human Resource Development and infrastructure.
- Trade and development-trade as engine of growth, two-gap analysis,
Prebisch, Singer and Myrdal views; gains from trade and LDCs.
- Theories of taxation, types, incidence and effects.
- Theories of public expenditure-effects on savings, investment and
- Burden of public debt.
- Union finance-Trends in Revenue and Expenditure of the Government of
India State finance-Trends in Revenue and Expenditure of the State
- Public Debt-India's Public debt since 1951-growth composition,ownership
pattern and debt management.
- Union-State Financial Relations-Horizontal and vertical imbalances; the
- Fiscal Policy and Fiscal Reforms in India.
- Monetary approach'adjustment in the balance of payments.
- Regional blocs-multilateralism and world trading system.
- The Political Economy of imposition of non-tariff barriers.
- International trade under conditions of imperfect competition in goods
- Theory of International reserves.
- Optimum Currency Areas-Theory and impact in the developed and developing
- WTO and its impact on the different sectors of the economy.
- Components of money supply.
- Role, constituents and functions of money and capital markets.
- RBI-recent monetary and credit policies.
- Commercial banks and cooperative banks.
- Specialized financial and investment institutions.
- Non-Bank financial institutions and Regional Rural Banks.
- Industrial structure and economic growth.
- Pattern of industrialization-Public and Private; large and small
- Theories of Industrial location-Indian experience.
- Industrial productivity-measurement, partial and total trends.
- Industrial Finance in India.
- Industrial Labour-Problems, policies and reforms in India.
- Economic Reforms and industrial growth.
- Population and Economic development-interrelation between population,
development and environment, sustainable development.
- Malthusian theory of population, Optimum theory of population, theory of
demographic transition, populations as `Limits to Growth' and as `Ultimate
- Concepts of Demography-Vital rates,Life tables, composition and uses,
Measurement of fertility-Total fertility rate, gross and net reproduction
rate-Age pyramids, population projection-stable,
- stationary and quasi-stationary population; characteristics of Indian
population through recent census.
- Poverty in India-Absolute and relative; analysis of poverty in India.
- Environment as necessity-amenity and public good; causes of
environmental and ecosystem degeneration- policies for controlling
pollution-economic and persuasive; their relative effectiveness in LDC's
Relation between population poverty and environmental degradation-micro
planning for environment and eco-preservation-water sheds, joint forest
management and self-help groups.
- Role of State in environmental preservation-Review of environmental
legislation in India.
- Role of Agriculture in Indian Economy-Share of Agriculture,
interrelationship between agriculture and industry.
- Institutional aspects-Land reforms,Green revolution.
- Technological aspects-Agricultural inputs an shifts in production
- Capital formation in the rural sector-Savings, assets and credits.
- Strategies for rural development.
- Regional desparities in Indian agriculture.
- Cooperative movement in India-Organization, structure and development of
different types of cooperatives in India.
- Application of Differential and Intergral Calculus in thories of
consumer behaviour, Production and pricing under different market
- Input-output analysis and linear programming.
- Application of Correlation and Regression.
- Testing of Hypothesis in Regression Analysis.
- Single Equation Linear Model:
- Assumption and properties of OLS.
- Multiple Regression Model-Estimation and Interpretation.
- Multi-collinearity-Auto-correlation and heteroscedasticity-Causes,
detection, consequences and remedy.
- Dummy variables, distributed lags-Need, limitations and interpretation.
- Applications in Economics.
- Simultaneous Equation models:
- Structural and reduced forms.
- Endogenous and exogenous variables.
- Identification problems and conditions.
- Single equation methods of estimations-TSLS, indirect least squares and
least variance ratio.
- Techniques of Forecasting:
- ARMA, ARIMA
- Econometric properties of time series, Unit root, integrated series,
random walk and white noise.
- Theory of Consumer Behaviour and Theory of Firms.
- Theory of Pricing-Monopoly, Monopolistic competition, Duoploy and
- Theory of Games-Two -person, zero-sum Game, Pure and Mixed strategy,
Saddle point solution, Linear programming and input output analysis.
- Static and Dynamic Multiplier and Accelerator, Samuelson-Hicks trade
cycle model. Growth Models-Harrod and Domar, Neoclassical models-Solow,
Meade, Kaldor's Model with technological progress, endogenous growth models.
- Employment and output determination with fixed and flexible prices
(IS-LM, Aggregate demand and aggregate supply analysis).
- The Rise and Fall of Bretton-Wood and emerging International Monetary
- World Trading System-Evolution and Distortions.
- Globalization-Developments in Exchange Markets, Euro-Currency Markets,
and International Bond Markets, International Debt crisis.
- Theory of Foreign Exchange Markets-Exchange Trading, Arbitrage and
- Growth and Productivity trends in Indian agriculture.
- Development of distributive institutions-Costs and price policies.
- Agricultural marketing and credit.
- Trends in migration and labour markets. Minimum Wages Act.
- WTO and sustainable agricultural development.
- Reforms in Indian agriculture.
- Planning and Economic Development.
- Costs, Prices, WTO and Indian Agriculture.
- Globalization, Liberalization and the Indian Industrial Sector.
- Infrastructure and Economic Development.
- Social Sector, Poverty and Reforms in India.
- Women, Environment and Economic Development.
- Trade Roforms and Liberalization.
- Financial sector reforms.
- Fiscal policy and fiscal reforms.