COURSE CODE: ECO 601

COURSE NAME: ADVANCED MICROECONOMICS

1. Consumer behavior: The linear expenditure system, additive utility functions, indirect utility function.
2. Consumer behavior under uncertainty: The expected utility hypothesis, risk aversion and risk preference; insurance and lottery.
3. Producer’s theory: Cost functions and cost minimization, the long run and short run cost curves; factor price and cost functions, envelope theorem for constrained optimization; Production function Vs cost function.
4. Managerial models of firm: Marris’s model of managerial enterprise, the goal of the firm, constraints; equilibrium of the firm; Williamson’s model of managerial discretion.
5. General equilibrium analysis: The meaning of general equilibrium, existence, uniqueness and stability of general equilibrium.
6. Welfare economics: The Pareto criterion, the compensation criterion— Kaldor, Hicks, Scitovsky, social welfare function, the impossibility theorem.

Recommended Books

Handerson, J. N. and Quandt, R. E.: Microeconomic Theory,

McGraw-Hill,  1980.

Koutsoyiannis, A.: Modern Microeconomics, Prentice-Hall,

1979. Layard, R. and Walters, A.: Microeconomic Theory,

McGraw- Hill, 1978.

COURSE CODE: ECO 602

 DEVELOPMENT ECONOMICS

1. Theories of development: The Linear- Stages Theory: Rostow’s stages of growth model, the Harrod-Domar growth model.
2. The Structural Change Model: The Lewis-Fei-Ranis model, Harris- Todaro model.
3. Capital and Savings: Capital formation and domestic savings; determinants of domestic savings; foreign aid and foreign investment.
4. International Trade and Development: Static and dynamic effects of international trade, export instability, long run terms of trade deterioration, trade policy and the developing countries.
5. Foreign Finance and Development: Third world debt crisis, IMF stabilization programs, East Asian financial crisis.
6. Inequality, Poverty and Population Growth: Kuznets inverted-U, demand side theories and supply side theories, a relationship between population growth and development.

Recommended Books:

• Mandal, S.: Socio Economic Development and Human Welfare: An Interdisciplinary Approach, 2000.
• Ray Debraj: Development Economics, Oxford University Press, 1998. Thirlwall, A. P.: Growth and Development, Macmillan Press, 1994.
• Todaro, M. P.: and Smith, S., Economic Development, Addision- Wesley, 2003.

COURSE CODE: ECO 603

BANKING

1. Commercial Banking: Balance sheet of a bank; items of a balance sheet; portfolio management of a commercial bank; risk-return indifference curve; the mean-variance portfolio, portfolio theory and financial intermediaries; E- banking.
2. Theories of Banking: The nature of Banking, Banking Theory: Historical and Contemporary, Liquidity of the Banking System.
3. Central Banking: Structure of a central bank; monetary policy of the central bank; uses of repurchase agreement (Repo) and reverse repo to control money supply; cost and risks of using Repo; bank regulation; the Bangladesh Bank—working of the Bangladesh Bank.
4. Development Banking: Working of development banks; needs for development banks; objectives of development banks; development banking in Bangladesh--RAKUB, Krishi Bank, Shilpa Bank; alternative banking and Grameen Bank.
5. International Banking: Pros and cons of offshore banking; offshore banking in the context of Bangladesh; Eurodollar banking and Eurocurrency banking; the World Bank, IMF, Asian Development Bank.
6. Islamic Banking: Characteristics of Islamic banking, models of investment; relations with the central bank; monetary policy in an interest free economy.

Recommended Books:

• BIBA: Readings in Islamic Banking.

• Boskey: Problems and Practices of Development Banks. Diamonds: Development Banks.

• Lucket, D. G.: Money and Banking.

• Rahman, S. M.: Islami Arthoniti: Nirbachito Probondho.

COURSE CODE: ECO 604

 HEALTH ECONOMICS

1. Introduction to Health Economics: Concept of health economics, and health care economics; relevance of health economics; importance of health sector in macro economy; economic problems faced by the health sector.
2. The Production Function of Health: Production function of health; measures of health; morbidity based indicators; healthcare as an output of the health services industry and as an input to health; life style and health; role of medicine; public health; nutrition and schooling on health; determining the allocation of resources to healthcare using health production function; empirical studies health production function.
3. Demand for Health and Healthcare: Need vs demand, consumer as health producer Grossman model on demand for health; investment and consumption on aspect of health investment; graphical and algebraic exposition of Grossman model; factor affecting demand for health and care; criticism of Grossman model; empirical evidence.
4. Insurance: Risk and insurance; insurance technology; demand for insurance; risk aversion and willingness to pay for insurance; supply of insurance; the optimal level of coverage; effect of coinsurance and deductibles on demand; loading cost and insurance firm; tax system and demand for insurance; the price for insurance; the question of uninsured.
5. Cost-Benefit Analysis and Application to Health Care: Cost-benefit analysis: basic principles; the valuation of benefits and costs; cost-benefit analysis in health care; quantity- adjusted life years (QALYs), cost- effectiveness analysis.
6. Health Care System in Bangladesh: Health status of the population; morbidity and mortality patterns; nutritional status; health care organizations; health policies and programs; health workforce development; health service indicators; financing health.

Recommended Books:

• Fledstein, C.: Healthcare Economics, Belmar Publishers Inc.

• Folland, S. A. C. Goodman and Stano, M.: The Economics of Health and Health Care, 2^nd Edition, Prentice Hall, 1997.

• Meguire, A. Henderson and Moony: The Economics of Health Care, RKP.

COURSE CODE: ECO 605

PUBLIC FINANCE

1. Public Goods: Concepts of public goods; models of public good; pure and impure public goods; free riding and public good provision.
2. Government Expenditure: Causes of growth of public sector; Wagner’s hypothesis, Engel’s law, Baumol’s unbalanced growth model; Peacock- Wiseman hypothesis.
3. Government Revenue: Objectives and principles of taxation; benefit principle and ability to pay principle; personal income tax, corporate tax and expenditure tax; indirect taxes.
4. Government Budget: Concepts and techniques; balanced and unbalanced budget; budgets of Bangladesh.
5. Public Debt: Concept of public debt; effects on consumption and investment; burden of public debt; management of public debt.
6. Fiscal Policy: Fiscal policy for employment generation; anti-inflationary fiscal policy; fiscal policy and growth; fiscal policy in developing economies, Fiscal policy in Islam.

Recommended Books:

• Aronson, J. R.: Public Finance, 1985. Herber, B. P.: Modern Public Finance. Hossain, M. I.: Sarkari Artho Bebosthya.

• Musgrave, R. A. and Musgrave, P. P.: Public Finance in Theory and Practice.

COURSE CODE: ECO 606

POPULATION ECONOMICS

1. Population Theories: The Malthusian theory; the Marxian theory and the optimum theory.
2. The Time Allocation Model of Fertility Analysis: Basic features of thThe Household Production Model: Price and income effects; effects of we model; utility function and household income,; derivation of demand function for child services; properties of the demand function.
3. ife’s education on demand for children; evaluations of this model.
4. The Threshold Hypothesis: Theoretical analysis; its applicability in Bangladesh; empirical findings in different LDCs.
5. Theories of Migration: Push and pull hypothesis; selectivity hypothesis; neoclassical theory of investment; the Lewies-Ferains model of labor transfer and economic development; the Todaro model.
6. Population Policy: Heavy population pressure and population policy; population policy and planning in Bangladesh.

Recommended Books:

• Barcly, G. W.: Techniques of Population Analysis.

• Spenglar, J. and Duncant, O. D.: Population Theory and Policy.

• Todaro, M. P. and Smith, S. C.: Economic Development in Third World, 2003.

COURSE CODE: ECO 607 

ISLAMIC ECONOMICS

1. Microeconomic Concepts in Islamic Economics: Theory of Islamic consumer behavior- basic concepts; contributions of Fahim Khan; Monzer Kahf and Anas Zarka; Islamic theory of demand and supply.
2. Macroeconomic Concepts in Islamic Economics: Theory of Islamic consumption function; contribution of Mannan and Ausuf Ahmad; savings and investment theory in an Islamic economy.
3. Money and Banking: Sources of monetary expansion; Islamic monetary policy; objectives and instruments; Islamic banking- definition and characteristics of Islamic Banking; concepts of riba; operational mechanisms; models of accumulation of funds and investment; role of central banking in Islam.
4. Public Finance: Public finance in early Islamic days; public finance in a modern Islamic state; role of state in an Islamic economy. Islamic fiscal policy- the role of zakat; objectives of zakat policy; socio-economic impact of zakat; some controversial issues.
5. International Trade: The theory of international trade and the Muslim world; the position of the Muslim world in world economy; D-8, GCO, ECO and the Islamic common market; globalization; WTO and Muslim world.
6. Economic Development: Definition of Islamic economic development; is Islam an obstacle to development? Basic indicators; development priorities in Islam; goals and strategies of development in Islam; mobilization of resources- financial resources, human resources.
7. Women in Islamic Economic Development : Place of women in Islam; Sphere of economic activities of women in Islam; role of women in economic development in Bangladesh; some observations and suggestions.

Recommended Books:

• Ahmad, A. and Awan, K. R.: Lectures on Islamic Economics, IRTI, Islamic Development Bank Jeddah: 1992.

• Mannan, M. A.: The Making of Islamic Economic Society: Islamic Dimensions in Economics Analysis, International Association of Islamic Banks.

• Rahman, S. M.: Islami Arthoniti: Nirbachito Probondho.

COURSE CODE: ECO 608

ADVANCED MACROECONOMICS

1. Theory of unemployment: Job search and frictional unemployment; Real-wage rigidity and structural unemployment; Patterns of unemployment.
2. The Rational Expectations: The basic model with exogenous/endogenous expectations; the frictionless neoclassical model of labour market; the market clearing approach.
3. Aggregate demand in the open economy: The Mundel Fleming model; the small open economy under floating exchange rate; small open economy under fixed exchange rate.
4. Models of aggregate supply: The sticky wage model; the imperfect information model, the sticky price model; inflation; unemployment and the Phillips curve.
5. Stabilization policy: Active and passive policies; lags; ignorance; lucas critique; policies by rule or discretion; policy in an uncertain world.
6. Macrodynamics and Growth models: The stylized facts of growth; basic assumptions of one-sector growth model; the Harrod-Domar model.
7. The Basic Neoclassical Growth model: The constant-returns production model: equilibrium growth in the neoclassical model; the neoclassical model with technical progress; multiple equilibrium in the neoclassical model.

Recommended Books:

• Branson, W. H.: Macroeconomic Theory and Policy, Harper and Row, 1989. Dornbusch, R., Fischer, S. and Startz, R.: Macroeconomics, Tata McGraw- Hill, 2000.

COURSE CODE: ECO 609

ECONOMETRICS

1. The 2SLS method: Over identified equation and application of 2SLS, properties of the 2SLS model.
2. The 3SLS method: 3SLS as an extension of 2SLS method, properties of the 3SLS model.
3. Maximum Likelihood methods: Limited information maximum likelihood method (LIML, Full information maximum likelihood method (FIML). 
4. Regression on dummy variables: The nature of dummy variables, use of dummy variables, the dummy variable trap.
5. Regression on dummy dependent variables:The linear probability model (LPM), the logit model, and the probit model.
6. Time series econometrics: Stationary and non-stationary time series, test of stationarity—unit root test and co-integration test; error correction model-some applications.

Recommended Books:

• Bridges: Applied Econometrics. Cramer: Empirical Econometrics. Gujarati: Basic Econometrics.

• Koutsoyiannis: Theory of Econometrics.

COURSE CODE: ECO 610

INTERNATIONAL ECONOMICS

1. The Two Sector Models of Trade: Ricardian model-determination of trade pattern and wages; some empirical results; misconception about the model; evaluation of the model; applicability of the model the present day world.
2. Trade between Dissimilar Countries: Insights from the factor proportion theory of trade- Heckscher-Ohlin model; the Rybczynsky theorem; the factor price equalization theorem; the Stolper-Samuelson theorem, test of the model- the Leontief paradox and its aftermath; factor content version of the Heckscher- Ohlin theorem- the Heckscher- Ohlin- Venek (HOV) model.
3. Trade between Similar Countries: Economics of scale and trade; imperfect competition and trade; the theory of external economies and trade; Alternative theories of trade- availability theory; vent for surplus theory; technological gape and product cycle model; international factor movement and the theory of multinationals.
4. International Trade Policy: Tariff analysis in general equilibrium framework; analysis of import quotas and export subsidies; non-tariff trade barriers- anti-dumping duties, the voluntary export restraints, counter veiling duties.
5. International Monetary System: Present International Monetary System, Current IMF Operation, problems with present exchange rate arrangements, proposal for reform, and other current international economic problems.
6. WTO and Bangladesh Trade Policy: International trading system and the WTO, Components of WTO agreement- GATS, four models of service supply under GATS; Evaluation of Bangladesh trade policy and way forward.

Recommended Books:

• Appleyard, D. and Field, A.: International Economics, 4^th edition, McGraw- Hill, 2001.

• Bo Sodersten, and Geoffrey Reed: International Economics, 3^rd edition, MacMillan, 1994.

• Salvatore, D.: International economics, 7^th edition, John Willey, 2001.