Public Economics analyses the role of the government in the economy. In this course we will discuss justifications for and the design of public policy as well as its consequences on market outcomes. Issues related to public goods, taxation, in particular the effects of tax policy on labor supply, entrepreneurship and innovation will be emphasized.
The primary goal of the course is to familiarize students with the central concepts and principles of public economics. The course aims at providing a good understanding of theoretical work and how it may be applied to actual policy problems. Students will get a good overview of recent key contributions in the field and how these relate to empirical observations.
Overview: The course Public Economics analyses the role of the government in the economy. In most developed countries, government activity is significant and ranges from public service provision, redistribution of incomes, regulation and taxation. In many cases, public expenditures are 30-40 percent of GDP. In the course, we will discuss justifications for and the design of public policy as well as its consequences on market outcomes. We will repeatedly use real-world policy examples to allow students to apply their knowledge and to realize how effectively the knowledge can be used to understand and design public policy making.
Organization: The course consists of four big building blocks, “externalities”, “taxation”, “political economy”, and “social security”. For each of the building blocks we will provide slides. There will be three problem sets and a written exam at the end of the course. Problem sets will not be graded. Credit points are given for passed exams only.