Public economics
A.A. 2018/2019
Obiettivi formativi
Knowledge and understanding: The aim of this course is to provide students with knowledge and understanding of the economic role of governments in modern market economies.
Applying knowledge and understanding: By the end of the course students will be equipped with analytical tools for understanding why government provision is desirable for some goods and services but not for others; how voting determines the level and composition of government provision; why and how governments should regulate some but not all private economic activities; how expenditure, taxation and transfers affect welfare and behaviour of households and firms.
Making judgements: By the end of the course, students should know how to use economic analysis to make informed judgements about the level and composition of government spending and taxation that result from actual government policies.
Communication skills. Although the course is based on lectures, students will be able to test their understanding and ability to communicate knowledge of the relevant topics by self-assessment tests. These self-evaluation tests will be made available on the course ARIEL website as the course proceeds. Self-evaluation tests will also include mock exams, in the final examination format.
Learning skills. Topics will be presented mainly by using theoretical models, although references to empirical evidence (i.e., public sector data, actual government policies, econometric evidence) will be made consistently throughout the course. Students should be able to understand and explain the economic content, assumptions, limitations, policy implications and relevance of the models presented.
Applying knowledge and understanding: By the end of the course students will be equipped with analytical tools for understanding why government provision is desirable for some goods and services but not for others; how voting determines the level and composition of government provision; why and how governments should regulate some but not all private economic activities; how expenditure, taxation and transfers affect welfare and behaviour of households and firms.
Making judgements: By the end of the course, students should know how to use economic analysis to make informed judgements about the level and composition of government spending and taxation that result from actual government policies.
Communication skills. Although the course is based on lectures, students will be able to test their understanding and ability to communicate knowledge of the relevant topics by self-assessment tests. These self-evaluation tests will be made available on the course ARIEL website as the course proceeds. Self-evaluation tests will also include mock exams, in the final examination format.
Learning skills. Topics will be presented mainly by using theoretical models, although references to empirical evidence (i.e., public sector data, actual government policies, econometric evidence) will be made consistently throughout the course. Students should be able to understand and explain the economic content, assumptions, limitations, policy implications and relevance of the models presented.
Risultati apprendimento attesi
Non definiti
Periodo: Secondo trimestre
Modalità di valutazione: Esame
Giudizio di valutazione: voto verbalizzato in trentesimi
Corso singolo
Questo insegnamento non può essere seguito come corso singolo. Puoi trovare gli insegnamenti disponibili consultando il catalogo corsi singoli.
Programma e organizzazione didattica
Edizione unica
Responsabile
Periodo
Secondo trimestre
STUDENTI FREQUENTANTI
Programma
1. What do governments do? Public sector statistics: international comparisons. The economic role of the state. Theories of public sector growth. Government failures: excessive governments.
2. Welfare economics in market economies: equilibrium and efficiency. The first and second fundamental theorems of welfare economics.
3. Public goods. Definitions. Private provision. Efficient provision: the Samuelson theorem. Free riding vs. altruism. Voting and Lindahl equilibrium. Mechanism design: Clark-Groves taxes.
4. Externalities. Definitions. The tragedy of the commons. Pigouvian taxation. Coasean bargaining.
5. Imperfect competition. Welfare loss of monopoly. Natural monopoly. Regulation of monopoly. Monopsony. Minimum wage.
6. Asymmetric information. Moral hazard (hidden action) and adverse selection (hidden knowledge) in health insurance markets. Public provision of health care.
7. Equity and redistribution: normative and positive issues. Social optimality. Lump-sum taxes. Cash vs. in-kind redistribution. Social welfare functions. Interpersonal comparability and social welfare. Inequality and inequality measurement.
8. Taxation. Commodity taxation: tax incidence and market structure; excess burden of taxation; optimal taxation: the Ramsey rule. Salience and taxation (if time allows). Income taxation: taxation and labour supply; optimal income taxation (if time allows).
9. Tax evasion. The rational taxpayer's evasion decision. Behavioural models.
10. Social security (if time allows). Pay-as-you go vs. fully funded social security programs. Pension crisis. Social security reform.
2. Welfare economics in market economies: equilibrium and efficiency. The first and second fundamental theorems of welfare economics.
3. Public goods. Definitions. Private provision. Efficient provision: the Samuelson theorem. Free riding vs. altruism. Voting and Lindahl equilibrium. Mechanism design: Clark-Groves taxes.
4. Externalities. Definitions. The tragedy of the commons. Pigouvian taxation. Coasean bargaining.
5. Imperfect competition. Welfare loss of monopoly. Natural monopoly. Regulation of monopoly. Monopsony. Minimum wage.
6. Asymmetric information. Moral hazard (hidden action) and adverse selection (hidden knowledge) in health insurance markets. Public provision of health care.
7. Equity and redistribution: normative and positive issues. Social optimality. Lump-sum taxes. Cash vs. in-kind redistribution. Social welfare functions. Interpersonal comparability and social welfare. Inequality and inequality measurement.
8. Taxation. Commodity taxation: tax incidence and market structure; excess burden of taxation; optimal taxation: the Ramsey rule. Salience and taxation (if time allows). Income taxation: taxation and labour supply; optimal income taxation (if time allows).
9. Tax evasion. The rational taxpayer's evasion decision. Behavioural models.
10. Social security (if time allows). Pay-as-you go vs. fully funded social security programs. Pension crisis. Social security reform.
Propedeuticità
Mathematics and Microeconomics courses for Politics and Economics students.
Prerequisiti
Students attending the course will take a mid-term written examination (weighting 50% of the overall examination mark) and an end-of-term written examination (weighting 50% of the overall examination mark). The format for each examination consists of a set of multiple choice tests and two open questions, which may include numerical exercises. Examples of examination questions presented in the examination format will be uploaded on the course ARIEL website as the course proceeds.
Metodi didattici
Lectures: 6 hours per week throughout the term.
Materiale di riferimento
STUDENTI NON FREQUENTANTI
Hindriks J. and Myles D. G. (2013, 2nd edition). Intermediate public economics, MIT PRESS, is the reference textbook for this course. The syllabus covers selected material from chapters 1, 2, 4, 5, 6, 8, 9, 10, 12 (pp. 398-401), 13, 14 (pp.466-480); 15, 16, 17, 23. For topics 2-6, students may also find it useful: Varian, H. R. (2014). Intermediate microeconomics, International student editon (8th), W.W. Norton & Company pubs, chapters 34, 35, 37 and 38 (previous editions of Varian are also useful). A reading list of articles from scientific journals to complement the textbook will be provided at the beginning of the course. Slides will be made available on the course ARIEL website before lectures as the course proceeds.
Programma
1. An introduction to public economics
2. Equilibrium and efficiency
3. Public sector statistics
4. Theories of the public sector
5. Public goods
6. Externalities
7. Imperfect competition
8. Asymmetric information
9. Voting
10. Equity and redistribution: Optimality and comparability
11.Commodity taxation
12. Income taxation
13. Tax evasion
2. Equilibrium and efficiency
3. Public sector statistics
4. Theories of the public sector
5. Public goods
6. Externalities
7. Imperfect competition
8. Asymmetric information
9. Voting
10. Equity and redistribution: Optimality and comparability
11.Commodity taxation
12. Income taxation
13. Tax evasion
Prerequisiti
Students not attending the course will take a one-hour-and-half written examination. The examination format consists of a set of multiple choice tests and two open questions. Examples of examination questions presented in the examination format will be uploaded on the course ARIEL website.
Materiale di riferimento
Hindriks J. and Myles D. G. (2013, 2nd edition). Intermediate public economics, MIT PRESS, ch. 1, 2, 4, 5, 6, 8, 9, 10, 11, 13, 15, 16, 17.
Alternatively, students not attending the course can base their study program on: Silvestre, J., (2012) Public microeconomics: Efficiency and equity in public policy, Cheltenham, UK: Edward Elgar; and on Hindriks J. and Myles D. G. (2013, 2nd edition). Intermediate public economics, MIT PRESS, ch. 15, 16 and 17. Students not attending the course who are willing to adopt the alternative study program must contact the teacher in advance of their preparation for the examination.
Alternatively, students not attending the course can base their study program on: Silvestre, J., (2012) Public microeconomics: Efficiency and equity in public policy, Cheltenham, UK: Edward Elgar; and on Hindriks J. and Myles D. G. (2013, 2nd edition). Intermediate public economics, MIT PRESS, ch. 15, 16 and 17. Students not attending the course who are willing to adopt the alternative study program must contact the teacher in advance of their preparation for the examination.
Docente/i
Ricevimento:
Ricevimento terzo trimestre (dall'11 aprile al 20 giugno 2025). Venerdì ore 8:30-11:30.
Online su Microsoft Teams.