Course Title: Microeconomic Theory

Course Code: AGEC-711

Course Credit Hours: 3(3+0)

Prerequisites: None

Producer theory, Profit maximization, Cost minimization, Consumer Theory, Kuhn-Tucker Theory, First theorem of welfare economics, Second theorem of welfare economics, Public goods, Externalities, Imperfect competition, Introduction to game theory.

- Nicholson, W. 1998. Microeconomic theory, basic Principles and Extensions, Dryden Press, London.
- Varian, H.R. 1992. Microeconomic Analysis, Third Edition. W.W. Norton Company, New York.
- Silberberg, E. 1988. The Structure of Economics, A Mathematical Analysis. McGraw-Hill Book Company New York.
- Mass-Colell, A., Winston, M. and Green, J. 1995. Microeconomic Theory. Oxford University Press New York.
- Takayama, A. 1993. Analytical Methods in Economics. The University of Michigan Press, USA.
- Henderson, J. M. and R. E. Quandt 1980. Microeconomic Theory: A Mathematical Approach. (Third edition) McGraw Hill Book Company.

Course Title: Mathematical Economics

Course Code: AGEC-713

Course Credit Hours: 3(3+0)

Prerequisites: None

Review of differentiation. Unconstrained Optimization and Constrained Optimization using differentiation. Necessary and sufficient Conditions for Optimization. Various Theorems on optimization. Applications in Business and Economics. Dynamic optimization.

- Chiang, A. C. 1996. Fundamental Methods of Mathematical Economics, 3rd Edition, McGraw Hill International Editions.
- Takayama, A. 1985. Mathematical Economics, Second Edition. Cambridge University Press.
- Budnick, F. S. 1993. Applied Mathematics for Business, Economics and Social Sciences, McGraw Hill, Inc. New York.
- Silberberg, E. 1990. The Structure of Economics, A Mathematical Analysis, Second Edition. McGraw Hill Book Company New York.
- Yamane, T. Mathematics for Economists, Latest Edition.
- Wu, Nesa and Richard Coppins. Linear Programming and Extensions. New York: McGraw Hill, Latest Edition.
- Eugene, S. The Structure of Economics, A Mathematical Analysis, McGraw Hill, New York, Latest Edition.

Course Title: Special Problem

Course Code: AGEC-719

Course Credit Hours: 1(0+1)

Prerequisites: None

In the special problem, Students will be assigned problem of special concern related to Agricultural Economics.

Course Title: Agricultural Marketing

Course Code: AGEC-717

Course Credit Hours: 3(3+0)

Prerequisites: None

Basic concepts of economic analysis of marketing system for agricultural, food and livestock products, including the input supply industry, production, transformation and final consumption. The structure- conduct- performance paradigm of industrial organization theory and application of analytical techniques, market margins and profitability analysis.

- Clarkson, K. W. (1997). Industrial Organization, Theory, Evidence and Public Policy, 1977.
- Kohls R. L. and UHL. J.N. Marketing of Agricultural Products. Seventh Edition. New York MazWell, MacMillan, 1990.
- Kotler, P. and Armstrong, G. Principles of Marketing. Seventh Edition Prentice-Hall, International, Inc. 1996.
- Scarborough, V. and Kydd, J. (1992). Economic Analysis of Agricultural Markets: A Manual, Chatjam, UK. National Resources Institute.
- Burgess, G. H. The Economics of Regulation and Antitrust, Harper Collins College Publishers, New York 1995.

Course Title: Macroeconomic Theory

Course Code: AGEC-712

Course Credit Hours: 3(3+0)

Prerequisites: None

**Introduction and National Income**

The Development of Macroeconomics, Actual vs. Potential Output, Analytical Approach to Macroeconomics. Circular Flow of National Income, Measurement of GNP: Expenditure Approach, Product Approach / Income Approach, GNP as measure of welfare. Leakages and Injections: Saving and Investment and their Role. Nominal and Real Variables.

Economic Models, Exogenous and Endogenous Variables and their Functional Relationships. Leading and Lagged variables. Measuring Unemployment: Oken’s Law. How to build simple Macroeconomic Models, Price Indices; Inflation Indexes, Deflation and Stagflation. Introduction to Keynesian and Classical School of Thoughts.

Firm’s Demand for Factors of Production, Production Function, Demand for Labor and Capital: Marginal Product of Factors and their Demand. Labor Market and its Equilibrium. Demand for Goods and Services: Aggregate Demand and its Components: Consumption, Investment, Government Spending and Net exports. Equilibrium of Aggregate Demand and Supply: Mathematical Solution and Equilibrium. Saving and Investment Balance. Derivation of Simple Multiplier, Tax Multiplier. Inclusion of Imports and Multiplier.

Theories of Consumption: Duesenbury Hypothesis, Keynesian Consumption Function. Permanent Income Hypothesis / Life Cycle Hypothesis, Beyond Permanent Income Hypothesis, Kuznet’s findings and Reconciliation of Marginal Propensity to Consume and Average Propensity to Consume and Evidences. Mathematical derivation of Consumption Models. The MPS Model, Wealth effect in the Static Model. Implications of Consumption Theories for Policy Formulation and Stabilization Policy. Random Walk Model.

Definition and Kinds of Investment; Autonomous and Induced etc. Determinants of investment. Present Value Criteria for Investment. Investment Demand and Output Growth. Tobin’s Q-Theory. Lags in Investment Demand. Derivation of IS-curve, Shape of IS-curve. Volatility of Investment. Investment Demand and Fiscal Policy. Shifts in Investment Demand Curve and output determination.

Exchange Rates and their Determinants: Mundell - Fleming Model (MFM): Small open Economy with perfect Capital Mobility. IS-LM: Goods and Money Market. Small Open Economy, Floating Exchange Rate and Fiscal Policy. Fixed Exchange Rate and Fiscal Policy. Flexible and Managed Exchange Rates. Monetary Policy, Devaluation and Recovery from great depression. Trade Policy: Mundell-Fleming Model (MFM) with changing Price Level. MFM and large open Economy. Depreciation and its impacts. Income Absorption Approach and exchange Adjustment and Balance of Payment.

Policy Actions: Active or Passive, Ignorance, Expectations and the Lucas Critique. Conduct of Policy: Rule vs. Discretion, Distrust of Policy makers and Political Process. Macroeconomics Policy: Rules for Fiscal Policy, making Policy in uncertain World. Seignorage and Inflation: What can Policy Accomplish? Monetarists vs. Activists debate. Phillips Curve: Short run and Long run analysis. The expectation augmented Phillips Curve. Money Inclusion and output. Short Run and Long Run Adjustment. Perfect Foresight and Adjustment.

The size of Government Debt, Measurement Problem: Inflation, Capital Assets, Business Cycle etc. Ricardian view of Debt: Ricardian Equivalence, Consumers and Future Taxes. Tax shooting, Delayed Stabilization, Ricardo and Ricardian Equivalence and Debate. Model of Debt Crises.

- 1. Branson, William H., (1979), Macroeconomic Theory and Policy, Harper and Row Publishers, New York / London.
- 2. Branson, William H., and Litvack James M., Macroeconomics*, (Latest Edition), Princeton University.
- 3. Glahe, Fred R., (Latest Edition), Macroeconomics, Theory and Policy, Harcourt Brace Jovanovich Inc.
- Mankiw, Gregory N., (2000) Macroeconomics*, Worth Publishers, New York.
- Peel D. and Minfow P., (2002). Advance Macroeconomics, Edward Elgar, Cheltenham, U.K.
- Romer, David, (2001). Advanced Macroeconomics*, McGraw Hills, New York / London.
- Sargent, Thomas J., (1988) Rational Expectations and Inflation*, Harper and Raw Publishers, New York / London.
- Rosalind Leveic and Alexander Reborens, Macro-economics: An Introduction to Keynesian Neo-Classical Controversies; Macmillan (Latest edition).
- Denison, Edward F. 1985. Trends in American Economic Growth, 1929-1982. Washington: The Brookings Institution.

Course Title: Applied Econometrics

Course Code: AGEC-714

Course Credit Hours: 3(3+0)

Prerequisites: None

Definition and scope of econometrics, Econometric models vs. Statistical models, Ingredients of econometric modeling Specification, estimation, verification or evaluation and forecasting.

**The Classical Linear Regression Model **
**(a) The Simple Linear Regression Model (SLRM) **

Estimation of SLRM by Ordinary Least Squares (OLS), Interpretation of Estimated Coefficients and their Economic Meanings.

**(b) The Multiple Linear Regression Model (MLRM) **

Estimation of MLR model by OLS and its assumptions, Interpretation of estimated coefficients and their economic meanings, Computation of elasticities and standardized coefficients, Using R2 as a measure of ‘Goodness of Fit’ and some problems with its use.

**(c) The General Linear Regression Model (GLRM) **

Estimation of GLRM by OLS through Matrix Approach, Var-Cov matrix of estimated coefficients.

**(d) Evaluating an Estimated Linear Regression Model **

Testing the significance of individual coefficients, Testing the significance of the model as a whole.

**Autocorrelation **

What is Autocorrelation and its Causes? Consequences of Autocorrelation for OLS estimation. Methods for detection of Autocorrelation. Remedial measures for Autocorrelation.

**Forecasting with a Single Equation Regression Model **

What is forecasting and what are its various types? Important features of a good forecast. Variance of unconditional forecast error. Variance of conditional forecast error. Measures for evaluating the forecasting power of a model.

**Errors in Variables, Time as a Variable, Dummy Variables, Grouped Data, Lagged and Distributed-Lag Variables **

Errors in variables. Time as a variable. Dummy variables. Estimation from grouped data. Exogenous lagged variables. Endogenous lagged variables. Methods of estimation of lagged models.

**Time Series Econometrics **

ARIMA Models. Comparison of forecasts based on ARIMA and Regression Models. Unit Roots and Co-integration. Dummy Trap and its detection.

- Gujrati, D. Basic Econometrics , 3rd Edition, ” McGraw Hill, 1993
- Intrilligator Econometric Model, Techniques and Applications, N. J. Printice Hall, 1978.
- Johnston, J. Econometric Models, McGraw Hill, 1984
- Koutsoyiannis, A. Theory of Econometrics, McMillan, 1978
- Maddala, J.S. Econometrics, McGraw Hill, New York, 1978
- Wonnacot, R.J. Econometrics, John Wiley, New York & Wonnacot, E.
- Madnani, G.M.K Introduction to Econometrics Principles and Applications,
- Pindyck & Econometric Models & Economic Forecasts, 3rd Rubenfeld Edition, McGraw Hill Inc. 1992.
- Maddala, J. & Kim Unit Roots, Co-integration and Structural Change, Cambridge University Press, 1998.

Course Title: Seminar

Course Code: AGEC-718

Course Credit Hours: 1(0+1)

Prerequisites: None

Each Student will prepare presentation on assigned topic and deliver seminar.

Course Title: Economics of Land and Water Recourses

Course Code: AGEC-720

Course Credit Hours: 3(3+0)

Prerequisites: None

Introduction to Land and Economics, Principles of Land Utilization, Land resources evaluation, man-land relationship, present and future land requirements, Present land use, its problems and issues. Institutional arrangements affecting land use and land reclamation. Conservation and improvement planning, Zoning and efficient use of land resources. Land reforms.

Water as a scarce resource, water markets, principles of water pricing, estimation of alternative water use returns, water policy and resource allocation problems; water resource development, planning and management. Surface and ground water resources in Pakistan. Methods of water application and water use efficiency. Water losses and measures to check them. Investment strategies for irrigation, drinking water and drainage of irrigated soils; environmental, social and political dimensions of water use; and case studies.

- Tietenberg, T. Environmental and Resource Economics, 4th edition, 1996.
- Ahmad, N. Water resources of Pakistan and their utilization, Latest edition, 1993.
- Gibbon, E.C. the Economic value of water published by the Resources for Future INC, Washington, DC, 1986.
- Barlowe, R. 1986. Land Resources Economics, Englewood Cliffs, N.J. Prentice Hall, Inc.
- Dorfman, R and N.S Dorfman, 1990. Economics of Enviroment. W. Norton and Company, Inc. Toronto, Canada.