Course

Unit 1

Introduction to economics for public policy. Foundations and models. Supply and demand. Price-setting. Competition and welfare. Market structures. Opportunity cost, scarcity and choice. Efficiency and equity. Market failure. Externalities and public goods. Public policy to address market failure. Taxation and income distribution.

Unit 2

Models of rational choice and the optimization paradigm. Consumer theory: preferences, utility, budget constraints, and utility maximization. Producer theory: production functions, cost minimization, and profit maximization. Labor-leisure trade-offs and household decision-making. Market demand and supply aggregation. Applications to policy-relevant microeconomic behaviour.

Unit 3

Managing the National Economy in the Short-Run Foundations of macroeconomic analysis: models, frameworks and data. Measuring growth, unemployment and inflation. Business cycle theory. Monetary and fiscal policy. Money, banks and the role of the Central Bank. Monetary Policy.

Unit 4

Long-Run Economic Growth Determinants of economic growth in the long-run. New Keynesian and neoclassical models of economic growth. Endogenous growth models and growth policies.

Unit 5

International Economy Foreign exchange market and exchange rates. International financial system. Trade policy. Tariffs and non-tariff barriers.

Text Books / References

Textbooks and Papers: Hubbard, R. G., & O’Brien, A. P. (2020). Economics. 8th edition, Pearson Education. Mankiw, N. G. (2022). Macroeconomics. 11th edition, Macmillan Learning. Varian, H. R. (2016). Intermediate Microeconomics with Calculus: A Modern Approach: Ninth International Student Edition. WW Norton & Company. Reference Books: Bellinger, W. K. (2015). The economic analysis of public policy. Routledge. Coyle, D. (2020). Markets, state, and people: Economics for public policy. Princeton University Press. Dunn, W. N. (2015). Public policy analysis. routledge. Hausman, D., McPherson, M., & Satz, D. (2016). Economic analysis, moral philosophy, and public policy. Cambridge University Press. Mankiw, N. G., & Taylor, M. P. (2020). Economics. Cengage Learning EMEA. Moss, D. A. (2014). A concise guide to macroeconomics: what managers, executives, and students need to know. Harvard Business Press.

This course teaches students to apply economic theory to current social and economic problems and formulate relevant recommendations for public policy. It emphasizes the understanding of analytical tools and models that can be applied in a wide variety of contexts. The course covers key topics in micro- and macroeconomics and explores how governments can address market failure, smooth out the business cycle and foster economic growth in the long-run. The students will learn to apply relevant tools and frameworks at each stage of economic analysis for public policy, including data collection, model estimation, policy design and impact analysis. The course prepares students to be able to critically evaluate the economic policies promulgated by governments and other institutions, form their own judgments and design public policy options in an evolving global context.

Course Objectives:

1. Understand relevant economic theories and apply them in them in a policy formulation context.
2. Understand when the government should intervene in the economy and what tools and policy options are applicable in different situations.
3. Analyze strengths and weaknesses of policy options in addressing the range of problems the government faces.
4. Explain and estimate the effects of government interventions on economic and social outcomes in the short- and long-run.
5. Be familiar with the process of policy-making and the tools available to policy-makers.

Course Outcomes:

CO1: Apply economic concepts in a rigorous way to formulate public policy recommendations and communicate them to a wider audience.

CO2: Evaluate the relevance of alternative economic theories for analyzing policy issues over a range of subject areas, such as taxation, government purchases, healthcare and education, science and technology etc.

CO3: Present a structured argument and economic rationale for government intervention in a given policy area, addressing relevant financial challenges of the public policy option.

CO4: Apply methods of cost-benefit and cost effectiveness analysis to identify the policy option with the greatest social net benefit, and therefore the greatest efficiency.

CO5: Assess trade-offs and synergies between different public policy instruments to achieve short-run and long-run goals of economic development.

Skills:

• Critical thinking: students will develop critical thinking skills to assess the strengths, weaknesses, and unintended consequences of various policy interventions.

• Communication: students will enhance their ability to communicate complex economic concepts and policy recommendations clearly and persuasively to policymakers, stakeholders, and the general public.

Program outcome PO – Course Outcomes CO Mapping

Program Specific Outcomes PSO – Course Objectives – Mapping

*CA – Can be Quizzes, Assignment, Projects, and Reports, and Seminar