30264 - SCIENZA DELLE FINANZE / PUBLIC FINANCE
For the instruction language of the course see class group/s below
Go to class group/s: 31
Class group/s taught in English
A good knowledge of basic microeconomic theory (e.g. utility maximization, marginal rate of substitution, elasticity, mathematical derivatives) is strongly suggested. If you are not familiar with these concepts, the textbook provides a review chapter that you are required to prepare on your own. I also provide slides for your own review.
The goal of this course is to discuss current topics in Public Finance and to study government intervention in the economy from a normative perspective. The course addresses the fundamental questions of public finance: When should the government intervene in the economy? How might the government intervene? What is the effect of those interventions on economic outcomes? Why do governments choose to intervene in the way that they do? What drives the design of social insurance schemes, of the welfare state, and of the tax system? The course trains students to understand the need for and the limitations of the public sector, as well as how State intervention in the economy can be improved. This proves helpful in the analysis and forecast of policy decisions, by market analysts or by professionals working in government or international organizations.
- In the first part of the course, we cover the main motivations for government intervention in the economy:
- We discuss equity and efficiency rationales.
- We analyze the different types of market failures, such as externalities and underprovision of public goods.
- We discuss how to measures the benefits and the costs of government interventions (cost-benefit analysis).
- Which is the optimal government level for intervention (fiscal federalism).
- Why governments intervene in the way they do (political economy).
- We conclude the first part by analyzing an impure type of public good that is provided by governments of all developed economies: education.
- In the second part of the course, we discuss the social insurance framework and focus on the main welfare state programs:
- Unemployment benefits.
- Anti-poverty programs.
- Finally, we discuss how governments raise the resources needed for intervention, by analyzing taxation issues:
- Tax incidence.
- Tax efficiency.
- Distortionary effects of taxation.
- Illustrate the economic rationales of government intervention in market economies.
- Define Public Goods.
- Identify in which instances government intervention is needed to correct market failures.
- Explain how social insurance programs are designed.
- Estimate economic costs and benefits of government intervention.
- Discuss the role and extent of government intervention in market economies based on normative theory and empirical evidence.
- Analyze empirical evidence of academic research that evaluates the effects of government intervention.
- Evaluate effectiveness of public policies.
- Compare different policy/reform proposals for both public expenditure and taxation.
- Evaluate why governments intervene in the way they do.
- Face-to-face lectures
- Exercises (exercises, database, software etc.)
- Interactive class activities (role playing, business game, simulation, online forum, instant polls)
We solve and discuss numerical exercises and theoretical questions in class through the course. The goal is to put the concepts and theory of public finance "at work". We use theoretical and empirical tools learned during the course for in-class debates on recent public policy discussions.
|Continuous assessment||Partial exams||General exam|
For both attending and not-attending students, written individual exams are a mix of open ended, numerical and "True" or "False" questions. Two options available for the assessment, based on student’s preference:
- Written exam (either two partial exams or one comprehensive exam) worth 100% of final score.
- Written exam worth 80% (two partial exams worth 40% each or one comprehensive exam worth 80%) of final score plus an in-class group debate worth 20% of final score. If your debate score ends up being below your score in the written exam, then the written exam is worth 100%. Therefore, if you decide to debate you can only improve the score obtained in the written exam, but you are not penalized if your debate score is lower than it.
- J. GRUBER, Public Finance and Public Policy, Palgrave Macmillan, 2016, 5th edition.
- I upload the slides used for lectures on Bboard. Online teaching materials are compulsory for the course. Optional textboook excercises and solutions are posted on Bboard.