UPSC Economics Optional Syllabus for Optional Paper-I and Paper-II

UPSC CSE Mains Economics Optional Paper 1 Syllabus 

Advanced Micro Economics

• Marshallian and Walrasian Approach to Price determination.

• Alternative Distribution Theories: Ricardo, Kaldor, Kaleeki

• Markets Structure: Monopolistic Competition, Duopoly, Oligopoly.

• 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, 

  • Neo classical synthesis and New classical, 

  • Theories of Interest Rate determination and Interest Rate Structure.

Money - Banking and Finance

• Demand for and Supply of Money: 

  • Money Multiplier Quantity Theory of Money (Fisher, Pique and Friedman) 

  • Keyne's 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 the growth rate of money.

• 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

• Old and New Theories of International Trade

  • Comparative Advantage

  • Terms of Trade and Offer Curve.

  • Product Cycle and Strategic Trade Theories.

  • Trade as an engine of growth and theories of underdevelopment in an open economy.

• Forms of Protection: Tariff and quota.

• Balance of Payments Adjustments: Alternative Approaches.

  • Price versus income, income adjustments under fixed exchange rates,

  • Theories of Policy Mix

  • Exchange rate adjustments under capital mobility

  • Floating Rates and their Implications for Developing Countries: Currency Boards.

  • Trade Policy and Developing Countries.

  • BOP, adjustments and Policy Coordination in open economy macro-model.

  • Speculative attacks

  • Trade Blocks and Monetary Unions. 

  • WTO: TRIMS, TRIPS, Domestic Measures, Different Rounds of WTO talks.

Growth and Development

• Theories of growth: 

  • Harrod's model,

  • Lewis's model of development with surplus labour

  • Balanced and Unbalanced growth,

  • Human Capital and Economic Growth.

  • Research and Development and Economic Growth

• 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.

• Economic Development and International Trade and Investment, Role of Multinationals.

• Planning and Economic Development: the changing role of Markets and Planning, PrivatePublic Partnership

• Welfare indicators and measures of growth - Human Development Indices. The basic needs approach.

• Development and Environmental Sustainability - Renewable and Non-Renewable Resources, Environmental Degradation, Intergenerational equity development.

UPSC CSE Mains Economics Optional Paper 2 Syllabus 

Indian Economy in PreIndependence 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

The Pre-Liberalization Era

• Contribution of Vakil, Gadgil and V.K.R.V. Rao.

• Agriculture: Land Reforms and land tenure system, Green Revolution and capital formation in agriculture,

• Industry Trends in composition and growth, Role of the public and private sector, Small scale and cottage industries.

• National and Per capita income: patterns, trends, aggregate and Sectoral composition and changes therein.

• Broad factors determining National Income and distribution, Measures of poverty, Trends in poverty and inequality.

The Post-Liberalization Era

• New Economic Reform and Agriculture: Agriculture and WTO, Food processing, Subsidies, Agricultural prices and public distribution system, Impact of public expenditure on agricultural growth.

• New Economic Policy and Industry: Strategy of industrialization, Privatization, Disinvestments, Role of foreign direct investment and multinationals.

• New Economic Policy and Trade: Intellectual property rights: Implications of TRIPS, TRIMS, GATS and new EXIM policy.

• New Exchange Rate Regime: Partial and full convertibility, Capital account convertibility.

• New Economic Policy and Public Finance: Fiscal Responsibility Act, Twelfth Finance Commission and Fiscal Federalism and Fiscal Consolidation.

• New Economic Policy and Monetary system. Role of RBI under the new regime.

• Planning: From central Planning to indicative planning, Relation between planning and markets for growth and decentralized planning: 73rd and 74th Constitutional amendments.

• New Economic Policy and Employment: Employment and poverty, Rural wages, Employment Generation, Poverty alleviation schemes, New Rural Employment Guarantee Scheme.