Erasmus Program: Public Economics (9026)

This is the basic intermediate level course in public economics. Public economics or public finance studies the role of government in the economy. In particular, public economics seeks answers to the following four questions:

• When should the government intervene in the economy?
• How might the government intervene in the economy?
• What are the effects of government interventions on economic outcomes?
• Why governments choose to intervene in the way they do?

Too abstract? Not really, because another way economists highlight the usefulness of a course like this is by claiming that “it helps you understand the public finance issues discussed in the front page of newspapers everyday.” For, police protection, national security, immigration policy, health care, all levels of education, environment protection, social insurance, social security, unemployment insurance, disability insurance, welfare programs, mobile phone and tv licenses, internet regulation and all kinds of income, property and consumption taxes are all subject matters of public economics.

The analysis of public economics has two forms: positive analysis that examines what actually happens, as with the answers to questions (c) and (d), above; and normative analysis that examines what should have happened, as with the answers to questions (a) and (b), above. In so doing, both theory and empirical observation is used interactively in the study of the underlying problems and conclusions.