Economics: An Introduction to Public Economics
The aim of the course is to give an introduction to public economics. The course starts with the introduction of key concepts of microeconomics. We begin with the analysis of price formation using a model of supply and demand. The model forms the basis for a deeper analysis of consumer and producer behaviour. Thereafter we study market structures with varying degrees of competition and sources of market failure – with that as the starting point we move on to government intervention.
We discuss the rationales for government interventions in terms of efficiency and equity. A normative analysis provides a framework for evaluating the desirability of government intervention, making judgements about what governments should do. Arguments for government intervention like market failures, income redistribution and merit goods are examined as well as the reasons for government failure. In that context we look further into the theory of public choice. We also perform a positive analysis of public sector activities, studying what government actually does and the consequences of regulation, public spending and public financing, for households and firms. Besides these basics of public economics the course offers an in-depth analysis of various topics, e.g. health care, social insurance, income taxation, transfer programs etc. The choice of topic(s) may vary between semesters.