School of Economics
DAVV, RNT Marg,
Indore-452001
Tel 91-731-2516050
Fax 91-731-2519548

 

CORE SUBJECTS AT A GLANCE

INTERNATIONAL ECONOMICS

The basic concepts and analytical tools of international economics are precisely the same as those studied in the principles of economics. International Economics is mainly concerned with the study of economic relations between sovereign nations focusing on the international aspects of economic activities. The core of international economic relationship comprises only that aspect of the entire range of international relations the basis of which is the exchange of goods and services between people belonging to different nations.

International economics has several tasks to perform. The following are some of the questions which International Economics seeks to answer:

1.     Why do international movements of labour and capital take place?

2.     What determines which goods and services will be exported and imported
        by each country, on what terms, in what quantities?

3.     The effects of international exchange of goods and factor movements on
       
the productive efficiency and structure of national economies and on the
         level and distribution of national income in the countries engaged in
         trading.

Apart from these basic concepts, our course also comprises of some theories on comparative cost advantage of Adam Smith, David Ricardo, Equilibrium Theories of Pricing of Hecksher-Ohlin, Foreign Exchange Rate, BOP, Purchasing Power, Parity Theory, certain trade policies such as Tariffs, Customs Union, Dumping, International Monetary Institutes like IMF, IBRD etc.

PORTFOLIO MANAGEMENT

Investing in financial securities is now considered to be one of the best avenues for investing one's savings while it is acknowledged to be one of the most risky avenues of investment. It is rare to find investors investing their entire savings in a single security. Instead, they tend to invest in a group of securities; such a group of securities is called a Portfolio.

Creation of a portfolio helps to reduce risk without sacrificing returns. Portfolio management deals with the analysis of individual securities as well as with the theory and practice of optimally combining securities into portfolios.

An investor considering investment in securities is faced with the problem of choosing from among a large number of securities. His choice depends upon the risk-return characteristics of individual securities. He would attempt to choose the most desirable securities and like to allocate his funds over this group of securities. Again he is faced with the problem of deciding which securities to hold and how much to invest in each. The investor faces an infinite number of possible portfolios or groups of securities. The risk and return characteristics of portfolios differ from those of individual securities combining to form a portfolio. The investor tries to choose the optimal portfolio taking into consideration the risk return characteristics of all possible portfolios.

ECONOMETRICS

Econometrics, the result of a certain outlook on the role of economics, consists of the application of mathematical statistics to economic data to lend empirical support to the models constructed by mathematical economics and to obtain numerical results. Econometrics is an amalgam of economic theory, mathematical economic statistics and mathematical statistics. Yet it is a subject that deserves to be studied in its own right for the following reasons.

It makes statements or hypotheses that are mostly qualitative in nature. For example, microeconomic theory states that, other things remaining the same, a reduction in the price of a commodity is expected to increase the quantity demanded of that commodity. Thus, economic theory postulates a negative or inverse relationship between the price and quantity demanded of a commodity. But the theory itself does not provide any numerical measure of the relationship between the two, i.e. it does not tell by how much the quantity will go up or down as a result of a certain change in the price of the commodity. It is the job of the econometrician to provide such numerical estimates.

Economic statistics is mainly concerned with collecting, processing and presenting economic data in the form of charts and tables. This is the job of the economic statistician. It is he or she who is primarily responsible for collecting data on GNP, employment, unemployment, prices etc. The data thus collected constitutes the raw data for econometric work. But the econometric statistician does not go any further, not being concerned with using the collected data to test economic theories. Of course, one who does that becomes an econometrician.

MANAGEMENT SUBJECTS

The main aim of this curriculum is not only to make the students aware of the economic systems prevailing in our country but also to build managerial aptitude in them. The course focuses mainly upon Marketing Management, Principles of Management and Organisational Behaviour, Human Resource Management, Operations Research, Financial Accounting and Strategic Management, and Business Forecasting.