Course Description

Course Name

Public Finance

Session: VSOS3221

Hours & Credits

3 Credits

Prerequisites & Language Level

Taught In English

  • There is no language prerequisite for courses at this language level.

Overview

Introduction
?Public finance is the study of the role of the government in the economy.?(Gruber) Government collect tax and spend it. Why? We can consider two traditional roles of government: 1) provision of public goods and 2) redistribution. Market mechanism is believed not to be so successful in providing the proper level of public goods. Market outcome is also believed to be efficient in some senses, but equity is not guaranteed in it. We will consider government expenditure programs serving these two purposes. To fund these programs, tax revenue should be collected. We will also consider what the
effect of the tax is and how it should be imposed.

We will mainly focus on microeconomic analysis. The discussion on the actual government programme will complement the theoretical analysis. First and second year levels of microeconomics are prerequisite. It is also recommended that students are equipped with mathematical skills taught in math for economists.

Recommended/required text(s)
There is no required textbook, but you can refer the following books:
Harvery S. Rosen and Ted Gayer, Public Finance, 9th edition, McGraw Hill.
Joanthan Gruber, 2011, Public Finance and Public Policy, 3rd edition, Worth.
Joseph Stiglitz, 2000, Economics of the Public Sector, 3rd edition, Norton.

Unit content
The following topics will be covered in the order listed below.
1. Introduction
A. Structure of government finance
B. Fundamental theorem of welfare economics
2. Government Expenditure 1 (Public goods)
A. Public goods
B. Cost-Benefit
C. Political Economy
D. Programs: Education
3. Government Expenditure II (Social Insurance and Redistribution)
A. Health Insurance
B. National Pension
C. Income distribution and Welfare Policy
4. Government Revenue (Taxation)
A. Tax and Income Redistribution (tax incidence)
B. Tax and Efficiency (optimal taxation)

*Course content subject to change