Course 2024-2025 a.y.

Classes: 31 (II sem.)

Instructors:
Class 31: ALESSANDRA CASARICO

Government intervention in modern economies is pervasive and substantial. As a crude measure, government revenue and expenditure in OECD countries averages between 46% and 40% of GDP. The COVID-19 crisis has increased the role of government in market economies. Taxation, climate change externalities, pensions, health care, public debt, inequality and redistribution are all issues at the heart of the debate in virtually all contemporary democratic countries, representing key concerns for many of their citizens and often driving the political agenda. Understanding when, how and with what consequences government should intervene is crucial to understanding how modern economies work and the relationship between economics, public policy and law in order to identify effective reforms. The course aims to provide students with the intellectual framework necessary to seek sensible answers to these difficult questions. It builds on robust theoretical and empirical arguments, together with sound institutional analysis, to achieve an in-depth understanding of how government intervention shapes modern societies and how economic principles intersect with public policy and legal frameworks.

Introduction to public economics and public finance and facts about government intervention

Theoretical tools for public finance

Externalities

Public goods

Social insurance

Empirical tools for public finance

Pensions

Inequality and redistribution

Personal income tax

Corporate tax

Consumption tax

Cost-benefit analysis

At the end of the course student will be able to...

Acquire a basic technical language in economics (e.g. utility functions, profit maximization, competition, welfare evaluation)

Analyze some economic data; in particular, understand the difference between correlation and causation and recognize the situations in which more complex statistical analysis is needed

Identify the reasons and tools through which governments intervene in market economies and their impact on individuals and firms

Illustrate different policies on the revenue and expenditure side of the budget

Grasp how to evaluate policy effectiveness

At the end of the course student will be able to...

Analyse the building blocks of government intervention in the economy

Interpret economic data and economic phenomena involving a role for government

Assess alternative policies or reform proposals

Compare different policies and how they affect individuals and firms

Discuss current policy issues and formulate policy assessments, individually or in teams

• Lectures
• Practical Exercises
• Collaborative Works / Assignments

At the end of each topic, there will be practical sessions in class with exercises/open and multiple choice questions to deepen the theoretical understanding of the topics 

 

Group presentations and discussion on a list of policy questions prepared by the instructors

	Continuous assessment	Partial exams	General exam
Written individual exam (traditional/online)		x	x
Collaborative Works / Assignment (report, exercise, presentation, project work etc.)	x

Students are assessed based on two partial written exams (option A) or a general (option B). No minimum grade is required in the first partial exam in order to gain access to the second. The overall grade is a simple average of the grades of two partial exams, rounded upwards.

The evaluation of group assignments will contribute to the overall grade.

J. Gruber: Public Finance and Public Policy, Worth Publishers, Last edition

 

Slides made available on the elearning platform

 

Handouts with questions and solutions