Labour Economy Development

NOTES BY JAYAN JOSE THOMAS

Distribution and Economic Growth

This course will be offered to undergraduate students at IIT Delhi as ‘Distribution and Growth’ (Course code: HUL312) during July — December 2025. Given below is tentative outline.

You may like to take a look at my course Macro Development Economics (HSL711), which will also be offered during July-December 2025.

Course Outline

In this course, we will try to address the question of why economic growth has varied widely across countries and regions, and why the benefits of growth have been distributed unevenly over various population groups. This will be done by, first, understanding the different theoretical perspectives on economic growth and distribution, including the mainstream ‘neoclassical’ argument and an alternative ‘heterodox’ vision, which draw mainly on the ideas of Keynes and Marx. Secondly, we will examine the economic development experiences of India and other countries, including China, East Asia, and the West. We will attempt to draw lessons from development histories, analyze contemporary issues, and contemplate future paths for a more equitable world.

The major topics covered in this course will be the following:

Part I: Incomes, Wealth, and Distribution

  1. Circular flow of incomes: wages and profits
  2. Saving leads to investment: Or is it the other way round?
  3. The structure of income and employment in India
  4. Inequality in income and wealth: Cross-country experiences (Thomas Piketty)
  5. Wealthy corporations and poor people: how real are the fortunes of Fortune-xxx companies?

Part II: Economic Relations between countries

  1. The structure of the balance of payments: current account balance, foreign capital flows, and so on.
  2. Exchange rate (Rupees per dollar): how is it determined?
  3. Does capital actually flow from the rich to the poor countries?
  4. India and the world during the colonial period
  5. The love-hate relationship between China and the US

Part III: Government and the economy

  1. Which is a better economic model? the US, the (former) Soviet Union, or South Korea? And why?
  2. Understanding the Union budget: Taxes, government expenditures, and fiscal deficit.
  3. Does public sector spending encourage or discourage private enterprise?
  4. Should we worry about government debt?

Part IV: Money and banking

  1. Money: what is it? Is it created by the central bank or by the commercial banks?
  2. What can money do? Does more money imply higher prices or faster growth of output (and GDP)?
  3. Understanding RBI’s monetary policy statements (CRR, repo rate, and so on)
  4. What should worry us more? High inflation or high rates of interest?

Part V: Incomes and Wellbeing

  1. How do we ensure that the children of poor households too are healthy and educated?
  2. Do ‘freebies’ reduce inequality or are they a waste of resources?

Selected References

(The list may be revised during the course of the semester.  Additional reference material may be suggested, which will be updated in the detailed course outline).

Taylor, Lance (2008), Reconstructing Macroeconomics: Structuralist Proposals and Critiques of the Mainstream, Harvard University Press, MA.

Drèze, Jean and Amartya Sen (2013), An Uncertain Glory: India and its Contradictions, Allen Lane.

Piketty, Thomas (2014) Capital in the Twenty-First Century, Harvard University Press, Cambridge, London.  

Sen, Amartya, 2000, Development as Freedom, Oxford University Press, New Delhi.

Mazzucato, Mariana (2011), The Entrepreneurial State, Demos, London, UK. 

Thomas, Jayan Jose (2020), ‘Labour Market Changes in India, 2005-2018: Missing the Demographic Window of Opportunity’, Economic and Political Weekly, August 22. 

Course Evaluation

Term paper (team project) = 15%

Class Presentation (as part of a team) = 10%

Class participation = 5%

Minor Exam = 35%

Major Exam = 35%