BAEcon Finance

This course will provide an introduction to the economic analysis of public policy issues. The focus of the course will be on the development of up-to-date analytical tools, drawn from recent research, and their application to key policy issues relating to the spending, taxing and financing activities of government. The main part of the course will be devoted to taxation, behavioural responses and the design of tax policy. We would begin by examining the effects of taxes and transfers on labour supply and reported income, and then go on to consider incomes and behavioural responses at the top of the income distribution. We would look at the implications of taxation for economic efficiency and explore the optimal taxation of commodities and income.

(ECON20512 OR ECON20022) AND (ECON20110 OR ECON20222)

(ECON20512 Micro Analysis 4 or ECON20022 Micro 4) and (ECON20110 Econometrics or ECON20222 Quantitative Methods)

The unit aims to:

• To give students an appreciation of the analytical methods in economics for the study of the public sector.
• To provide a thorough grounding in the principles underlying the design of the tax and transfer systems.
• To introduce recent empirical literature on the effect of taxes and transfers on the behaviour of agents.

Provisional

This course will provide an introduction to the economic analysis of public policy issues. The focus of the course will be on the development of up-to-date analytical tools, drawn from recent research, and their application to key policy issues relating to the spending, taxing and financing activities of government. The main part of the course will be devoted to taxation, behavioural responses and the design of tax policy. We would begin by examining the effects of taxes and transfers on labour supply and reported income, and then go on to consider incomes and behavioural responses at the top of the income distribution. We would look at the implications of taxation for economic efficiency and explore the optimal taxation of commodities and income.

Synchronous activities (such as Lectures or Review and Q&A sessions, and tutorials), and guided self-study

Discuss critically key issues in public economics, informed by recent research. Interpret and critique the results of econometric studies of policies targeted for example at human capital, labour market outcomes, and the design of the tax and benefit system.

Present a coherent argument orally and in writing on topics in Public Economics

Use microeconomic framework for coherent evaluation of the government's planning problem.

Mid term exam - 25%

Final Exam - 75%

Formative assignments.

No single textbook provides the necessary material for this course. The course itself will be taught using a combination of textbook chapters, elementary journal articles, and working papers. A full reading list with the readings for each topic will be made available at the beginning of the course. One good undergraduate textbook that provide useful background to the course material is: Jonathan Gruber (2016) Public Finance and Public Policy, 5th edition, Worth Publishers.

For every 10 course unit credits we expect students to work for around 100 hours. This time generally includes any contact times (online or face to face, recorded and live), but also independent study, work for coursework, and group work. This amount is only a guidance and individual study time will vary.