Public Finance is about governmental provision of goods and services. In this course we will consider why the government produces, what it produces, how efficient public provision is compared to private provision, and how these goods and services are paid for. In a pure market system, output is produced according to the laws of supply and demand. Does the government follow the same profit motive? If not, how does the government reach its decisions? We will explore the interaction of consumers, voters, bureaucrats, and politicians. Government revenue topics include pricing and user fees, taxation, borrowing, and debt.
TEXT: Public Finance: A Contemporary Application of Theory to Policy (10th edition): David N. Hyman
PREREQUISITES: ECN 201 or ECN 215, ECN 205
Midterm I--25% (October 3)
Midterm II--25% (November 7)
There will be one term paper on a public finance topic, 8-12 pages in length (double-spaced). To describe the topic properly, the paper must include an empirical section wherein the student analyzes collected data to explain or test a proposed relationship. Projects and data should be discussed with me after preliminary work is started. Two drafts of the completed paper are to be turned in (one without your name) and the anonymous copy will be assigned to another student for review . When reviewing another paper, be sure to explain both what you like about the paper and how it can be improved (3-4 pages double-spaced). Turn in two copies of the review, one of which is anonymous. Upon receiving back the student comments and my own, a final draft of the paper will then be due at which point a cover response (1-2 pages) is to be attached which explains what changes were and were not made and why.
Additional details on required formatting and a guide to information needed to be included is posted to Sakai in the instructions document in the Empirical Paper Resources. The instruction sheet covers the original paper, review report, and revised paper guidelines.
Because other students will be responsible for working from your paper and/or review, they must be turned in on time. MAJOR grade penalties will be invoked for missing deadlines. Note that as posted on Sakia, deadlines are at 10:30 am (one half-hour prior to start of class) for the Original Paper and Review Report. Do not wait until due days to plan on finishing the assignments. NO EXCUSES will be accepted for being late. There is already plenty of time allocated to allow for completion of all assignments. I encourage all students to meet with me after looking over the comments.
A helpful review of ECN 201-type material is posted to Sakai in the Empirical Paper Resources folder.
CLASS DISCUSSION (10%)
Each student group is responsible for leading class discussion for one class on a single topic of their choosing (see the list below). The group will begin with a 30 minute talk presenting background economic theory relevant to the topic at hand, along with an explanation and critique of one or more specific policy proposals. The proposals could be at either the local, state, or federal level. It does not matter if the proposal passed, failed, or has never formally been voted on in legislature. The student group will then lead an open discussion period for the rest of class. Student-led classes will occur during the second half of the course, beginning November 5. Each student group should meet with me prior to their presentation.
Students are expected to come prepared to class throughout the semester, having read relavent chapters and reviewed previous material and notes.
Sep. 26: Class cancelled. Try not to be too disappointed.
Oct. 1: Guest discussion on tax evasion led by Prof. Koleman Strumpf
Nov. 9: Guest discussion on hybrid car tax credits led by Prof. Frank Stephenson
Nov. 16: Class cancelled. Try not to be too disappointed yet again.
Individuals and Government (chapter 1)
Tools of Microeconomic Analysis (chapter 1 appendix) - review on your own as refresher for ECN 205 material
Efficiency, Markets, and Government (chapter 2)
Welfare Economics (chapter 2 appendix)
Externalities and Government Policy (chapter 3, Public
Policy Perspective p. 460)
(readings on recycling posted to Sakai)
Public Goods (chapter 4)
(readings on sports stadiums posted to Sakai)
Public Choice and the Political Process (chapter 5)
Introduction to Government Finance (chapter 10)
Lecture slides for each chapter (except Chapter 1 appendix) posted to Sakai.
Topics include: Personal Income Taxation; Wealth, Property and Estate Taxes; Corporate Income Taxation; Consumption and Sales Taxes; Subsidies and Income Support; Balanced Budgets and Government Debt; Health Care; Social Security; Fiscal Federalism
Group topics and date will be allocated on first-come-first-served basis, and posted here and/or on Sakai.