COURSE AIMS AND OBJECTIVES:
To introduce students with theories and researches of the public sector economics and to enable them:
- to understand and to analyze public sector economics, and connected economic and social controversies;
- to understand and to analyze not only economic, but also social, political and cultural aspects of the public sector economics, and their impact on the economy and the everyday life of the citizens.
COURSE DESCRIPTION AND SYLLABUS:
1. Introduction to the public sector economics. Public sector economics and its attitudes toward the government (alternative views of government). Basic about the state (legislative framework, scope, expenditures, revenues).
2. Tools. Tools of positive analysis. Tools of normative analysis (welfare economics, market failures).
3. Analysis of public expenditure. Public goods (efficient provision, privatization, public choice). Externalities (analysis, public and private responses, implications for income distribution). Political economy (types of democracies, median voter, Arrow's impossibility theorem, explaining government growth). Conceptual issues of income redistribution (the maximin criterion, Pareto efficiency, incidence). Social insurance (role of the government). Pension system and unemployment insurance (role of the government). Health insurance (the role of the government). Cost-benefit analysis.
4. Tax analysis. Taxation and income distribution (tax incidence, partial equilibrium models, general equilibrium models). Taxation and efficiency (excess burden of taxation). Efficient and equitable taxation (optimal taxation, the Ramsey rule, the Edgworth's model, politics and the time inconsistency problem).
5. Public revenues system. Personal income taxation. Personal taxation and behavior. Corporate taxation. Public debt (size, burden, models - Lerner, overlapping generations, neoclassical, Ricardian). Taxes on consumption and wealth.
6. Multi-government public finance. Community formation. The Tiebout model. Optimal federalism. Property tax. Inter-governmental grants.