Public Finance
A.Y. 2023/2024
Learning objectives
The course aims to provide students with the theoretical basis and terminology of Public Finance in order to understand the normative reasons and positive effects of State intervention in market economies.
Expected learning outcomes
Upon completion of the course, students will be able to understand:
-why the State provides some goods and services and not others, how it finances them, and what the economics effects of this intervention are;
-why and with which tools the State can intervene to influence the market-determined distribution of income and wealth;
- the main features of social spending and the tax system in Italy.
-why the State provides some goods and services and not others, how it finances them, and what the economics effects of this intervention are;
-why and with which tools the State can intervene to influence the market-determined distribution of income and wealth;
- the main features of social spending and the tax system in Italy.
Lesson period: Third trimester
Assessment methods: Esame
Assessment result: voto verbalizzato in trentesimi
Single course
This course can be attended as a single course.
Course syllabus and organization
Single session
Responsible
Lesson period
Third trimester
Course syllabus
Module 1. Market failures and government failures.
Introduction: What is Public Economics? What is the economic role of governments in market economies? Normative analysis: welfare economics. Market failures: public goods and externalities. Collective choice and government failures. Income redistribution. Social spending: general principles.
Module 2. Taxation, equity and efficiency: general principles.
Taxation and income distribution: tax incidence. Taxation and efficiency: excess burden of taxation. Optimal taxation. Fiscal evasion. Personal taxes and individual behaviour. Fiscal federalism.
Module 3. The Public debt, social spending and tax system in Italy
Deficit spending and fiscal policy in the EU. Social spending: health care and pensions. The personal income tax. The corporate income tax. Consumption taxes. Tax evasion.
Introduction: What is Public Economics? What is the economic role of governments in market economies? Normative analysis: welfare economics. Market failures: public goods and externalities. Collective choice and government failures. Income redistribution. Social spending: general principles.
Module 2. Taxation, equity and efficiency: general principles.
Taxation and income distribution: tax incidence. Taxation and efficiency: excess burden of taxation. Optimal taxation. Fiscal evasion. Personal taxes and individual behaviour. Fiscal federalism.
Module 3. The Public debt, social spending and tax system in Italy
Deficit spending and fiscal policy in the EU. Social spending: health care and pensions. The personal income tax. The corporate income tax. Consumption taxes. Tax evasion.
Prerequisites for admission
Microeconomics.
Teaching methods
Lectures. Classes. Q&A meetings (voluntary attendance; online on MT: to be confirmed)
Teaching Resources
-Slides of lectures: slides will be made available on the myAriel Scienza delle finanze website (Santoni) as the course proceeds (Note: the SF myAriel website will be online in 2024.)
-Rosen, H.S., Gayer, T. e Rapallini, C., Scienza delle finanze, McGraw-Hill, 6a ed., 2023.
(Note: student can use previous editions of the textbook. However, the references given below refer to the 6th edition of the textbook. Moreover, old textbook editions may not be up-to-date regarding institutional aspects of the public sector, which may be relevant for Module 3 of the course).
Module 1: chapters 1-2 (Introduction), 3 (Welfare economics), 4-5 (Public goods and externalities), 6 (Theory of collective choice), 7 (Income redistribution), 10.1 (Health care expenditure), 11.1 (Unemployment insurance), 12.2-12.5 (Public pension systems).
Module 2: chapter 12, 14 (Tax incidence), 15 (Excess burden of taxation), 16 (Optimal taxation), 17 (Personal taxation and behaviour), 12.1 (Social security and savings), 21 (Fiscal federalism).
Modulo 3: chapters 8-9 (The European fiscal framework, deficit finance and the public debt), 10.2 (The health-care system in Italy), 12.6-12.10 (Social security in Italy), 18 (The personal income tax in Italy), 19 (The corporation tax in Italy), 20 (Taxes on consumption in Italy).
-Rosen, H.S., Gayer, T. e Rapallini, C., Scienza delle finanze, McGraw-Hill, 6a ed., 2023.
(Note: student can use previous editions of the textbook. However, the references given below refer to the 6th edition of the textbook. Moreover, old textbook editions may not be up-to-date regarding institutional aspects of the public sector, which may be relevant for Module 3 of the course).
Module 1: chapters 1-2 (Introduction), 3 (Welfare economics), 4-5 (Public goods and externalities), 6 (Theory of collective choice), 7 (Income redistribution), 10.1 (Health care expenditure), 11.1 (Unemployment insurance), 12.2-12.5 (Public pension systems).
Module 2: chapter 12, 14 (Tax incidence), 15 (Excess burden of taxation), 16 (Optimal taxation), 17 (Personal taxation and behaviour), 12.1 (Social security and savings), 21 (Fiscal federalism).
Modulo 3: chapters 8-9 (The European fiscal framework, deficit finance and the public debt), 10.2 (The health-care system in Italy), 12.6-12.10 (Social security in Italy), 18 (The personal income tax in Italy), 19 (The corporation tax in Italy), 20 (Taxes on consumption in Italy).
Assessment methods and Criteria
Exam program and format (from June 2024)
For attending students.
There will be a mid-term exam (date TBA at the start of the teaching term). The mid-term exam will consist of 16 multiple-choice tests (1 point for each correct answer; -0.5 point for each wrong answer; no point for no answer). Time allowed: 25 minutes. Attending students sitting the mid-term will complete their exam by taking an end-of-term exam, which will be held on the first official examination date (June 2024). The end-of-term exam will consist of 16 multiple-choice tests (1 point for each correct answer; -0.5 point for each wrong answer; no point for no answer). Time allowed: 25 minutes). The final mark will be the sum of the mid-term and end-of-term examination marks. Note: the mid-term mark is valid only if students complete the exam in June 2024. Attending students can always sit the exam on the comprehensive program on any examination date.
For attending and not attending students
The exam will be on the total program and will consist of 31 multiple-choice tests (1 point for each correct answer, -0.5 points for each wrong answer, 0 point for no answer). Time allowed: 45 minutes.
Note: there will be 6 examination dates overall.
Exam program and format (until May 2024)
The exam program and format for the period November 2023-May 2024 (three examination sessions, dates TBA) appelli, date da annunciare) will refer to prof. Massimo Florio's 2022-2023 Scienza delle finanze course for EMA students. Please, consult prof. Florio's ARIEL Scienza delle finanze ARIEL website (or the UNIMI website) for information on the exam program and format.
For attending students.
There will be a mid-term exam (date TBA at the start of the teaching term). The mid-term exam will consist of 16 multiple-choice tests (1 point for each correct answer; -0.5 point for each wrong answer; no point for no answer). Time allowed: 25 minutes. Attending students sitting the mid-term will complete their exam by taking an end-of-term exam, which will be held on the first official examination date (June 2024). The end-of-term exam will consist of 16 multiple-choice tests (1 point for each correct answer; -0.5 point for each wrong answer; no point for no answer). Time allowed: 25 minutes). The final mark will be the sum of the mid-term and end-of-term examination marks. Note: the mid-term mark is valid only if students complete the exam in June 2024. Attending students can always sit the exam on the comprehensive program on any examination date.
For attending and not attending students
The exam will be on the total program and will consist of 31 multiple-choice tests (1 point for each correct answer, -0.5 points for each wrong answer, 0 point for no answer). Time allowed: 45 minutes.
Note: there will be 6 examination dates overall.
Exam program and format (until May 2024)
The exam program and format for the period November 2023-May 2024 (three examination sessions, dates TBA) appelli, date da annunciare) will refer to prof. Massimo Florio's 2022-2023 Scienza delle finanze course for EMA students. Please, consult prof. Florio's ARIEL Scienza delle finanze ARIEL website (or the UNIMI website) for information on the exam program and format.
Educational website(s)
Professor(s)
Reception:
Office and feedback hours. Third term (until Fri 21/6/24): at 8:30-11:30. On Frid 19/04 office hours at 8:30-10:00 hh and 14:30-16:00 hh.
Online on MT.