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IES General Economics I Syllabus

Part A

1. Theory of Consumers Demand: Cardinal utility Analysis;

Marginal utility and demand, Consumers 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.
2. 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.
3. 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.
4. Theory of Distribution: Neo classical distribution theories;
Marginal productivity theory of determination of factor prices, Factor
shares and adding up problems. Eulers theorem, Pricing of factors
under imperfect competition, monopoly and bilateral monopoly.
Macro-distribution theories of Ricardo, Marx, Kaldor, Kalecki.
5. Welfare Economics: Inter-personal comparison and aggregation
problem, Public goods and externality, Divergence between social and
private welfare, compensation principle. Pareto optimality. Social
choice and other recent schools, including Coase and Sen and Game

Part B

Quantitative Methods in Economics:

1. 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.
2. Statistical and Econometric Methods: Measures of central
tendency and dispersions, Correlation and Regression. Time series.
Index numbers. Sampling and Survey methods. Testing of hypothesis,
simple non-parametric tests. Drawing 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, lognormal distribution, measurement of income
inequality. Lorenze curve and Gini coefficient.

IES General Economics II Syllabus

1. Economic Thought: Mercantilism Physiocrats, Clasical, Marxist,
Neo-classical, Keynesian and Monetarist schools of thought.
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.
3. 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 Philips curve and its policy implication.
Classical theory on Money, Quantity theory of Money.
Friedmans 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.
4. 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
5. 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
Nurske, Hirschman, Leibenstien and Arthur Lewis, Amin and Frank

(Dependency school) respective role of the state and the market.

Utilitarian and Welfariest approach to social development and A K
Sens critique. Sens capability approach to economic development.
The Human Development Index. Physical quality of Life Index and
Human Povery Index.
6. International Economics: Gains from International Trade, Terms
of Trade, policy, international trade and economic development
Theories of International Trade; Ricardo, Haberler, Heckscher-Ohlin
and Stopler-Samuelson Theory of Tariffs Regional Trade
7. Balance of Payments: Disequilibrium in Balance of Payments,
Mechanism of Adjustments, Foreign Trade Multiplier, Exchange
Rates, Import and Exchange Controls and Multiple Exchange Rates.
8. Global Institutions: UN agencies dealing with economic aspects,
World Bank, IMF and WTO, Multinational Corporations.

IES General Economics III Syllabus

1. 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
Economics: Environmentally
development, 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. Climatic change problems. Kyoto protocol, tradable
permits and carbon taxes.
3. 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
4. State, Market and Planning: Planning in a developing economy.
Planning regulation and market. Indicative Planning. Decentralised

UPSC CSE Mains Economics Syllabus

Paper - I
1. Advanced Micro Economics:
(a) Marshallian and Walrasiam Approaches to Price determination.
(b) Alternative Distribution Theories: Ricardo, Kaldor, Kaleeki
(c) Markets Structure: Monopolistic Competition, Duopoly,
(d) Modern Welfare Criteria: Pareto Hicks & Scitovsky, Arrows
Impossibility Theorem, A.K. Sens Social Welfare Function.
2. Advanced Macro Economics: 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.
3. 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. Relation between the
Central Bank and the Treasury. Proposal for ceiling on growth rate of
(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.
4. 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) 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 Implicationns 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:
(a) Theories of growth:
(i) Harrods model,
(ii) Lewis model of development with surplus labour

(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
Intergenerational equity development.

Paper - II
1. 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.
2. Indian Economy after Independence:
A The Pre Liberalization Era:
(i) 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 public
and private sector, Small scale and cottage industries.
(iv) National and Per capita income: patterns, trends, aggregate
and Sectoral composition and changes their 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
(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
(viii) New Economic Policy and Employment: Employment and
poverty, Rural wages, Employment Generation, Poverty
alleviation schemes, New Rural, Employment Guarantee