13158 - PUBLIC ECONOMICS
Academic Year 2021/2022
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RINALDO BRAU (Tit.)
- Teaching style
- Lingua Insegnamento
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The course aims to provide the students with the main methodological instruments which characterise the current debate on the role, the financing, the extention and the limits of the public sector intervention in the economy.
In line with the expected learning outcomes of the degree course in Economics and Finance, the educational objectives can be described following the Dublin Descriptors:
1) Knowledge and understanding. The course enables students to acquire systematic knowledge of the standard content of the courses of Public Economics / Public Finance mentioned above, and taught in the first level degrees of the leading international universities. After completing the course, the student will have honed his ability to understand why and in what way the political institutions contribute to the realization of economic activities.
2) Ability to apply knowledge and understanding. The models, case studies dealt with and the knowledge of the functioning of public institutions treated in class and assigned in the exercises at home aim to empower the student with the ability to analyze and understand the economic problems of a general nature beyond the specific cases treated in textbooks.
3) Making judgments. During the lessons, and in the final test, students will be called through the use of ad hoc cases to suggest forms of public intervention in the economy by the political decision-maker (government or local institution). To do this the student will need to know how to understand and analyze the economic framework in which the various economic operators concerned are involved. Particular attention will be given to the ability to always relate the need for public intervention to the concomitant need to find the fiscal resources with which to finance such interventions.
4) Communication skills. Through conducting exercises, the commentary to the texts used and classroom discussion of fac-smile of exam papers, students will learn to articulate with rigor and precision of their knowledge of the matter, as required during the verification final test. Students will also be encouraged to take action in the classroom, giving their opinions on the analyzed economic situations, motivating and supporting their points of view in dialogue with the teacher and other students.
5) Learning skills. The pervasive use of economic methodology in the analysis of social phenomena, the attention to the economic incentive problems underlying most of the situations that characterize the public intervention in the economy, the systematic use of the Cartesian diagram logic and the concept of mathematical function will improve and enhance the learning skills of the students later in their academic and professional career.
Although there are no formal prerequisites, it is believed that the student who follows the course of Public Economics must possess knowledge of Microeconomics (" important ") and General Mathematics , Statistics and Macroeconomics (" useful").
1. MARKET FAILURES
a. Externalities and transaction costs;
b. Natural monopolies and regulation of non-competitive markets ;
c. Public policy and social interactions
2. NON-MARKET FAILURES
- Public choice and direct democracy.
- Public choice and representative democracy
- The expansion of the share of the public sector
3. INEQUALITY AND WELFARE STATE
a. Institutions, power and inequality;
b. Public sector intervention in health care
c. Social protection against unemployment
d. Social insurance and pensions
4. TAXATION THEORY
- Taxation, tax shifting and income distribution
- Taxation and economic efficiency
- Optimal commodity and income taxation
- Introduction to tax evasion analysis
5 GOVERNMENT BUDGET AND EUROPEAN UNION FISCAL POLICIES
- The European governance of fiscal policies
- The yearly process leading to the budget law
6. THE ITALIAN TAX SYSTEM
- The personal income tax
- Corporate taxation
- Consumption taxation
- Fiscal federalism theory
- Financing local government units
The course consists of 54 hours of lectures, during which will also be distributed written exercises to do at home, then analysed in the classroom through the tutorials. It will also provide opportunities for discussion of current economic issues.
For the 2021/2022 Academic Year, teaching will be delivered mainly face-to-face, integrated and "augmented" with online strategies, to ensure its use innovatively and inclusively.
Verification of learning
Learning is usually verified through an elaborate in writing the maximum duration of 2.30 hours containing 4 questions containing various points to be developed.
The exam paper is always so arranged as to require students to highlight their mastery in algebraic derivation of economic relations, in the graphic representation, in the comments of the reference economic phenomena, in knowledge of the relevant institutional framework.
The score of the exam is out of thirty. The exam can only be passed in front of at least two fully satisfactory answers, and a third almost enough.
Students attending lectures will benefit from an intermediate test (pre-test), during the period of interruption determined by the Academic Calendar. If successful, this test will exempt the student from answer the first two questions of the above described final text (only for the first three exam dates).
Consistently with the descriptors identified in the training objectives, the following elements will be evaluated:
1) clarity in expressing the theoretical contents regarding the analysis of market failures, the corrective action of the public sector and tax theory (evaluation of knowledge and understanding).
2) the ability to revise the concepts and apply them to the cases that do not correspond exactly to the examples of the textbook but still covered in class or assigned deepening individual student (evaluation of ability to apply knowledge and understanding).
3) the ability to suggest a specific form of public intervention to address a market failure or know-how concrete examples, motivating their answers through the addressed theoretical tools and illustrating the logical path followed (evaluation of independent judgment).
4) The clarity and comments, the ability to synthesize, the mastery of the algebraic derivation of formal relations and their graphical representation (evaluation of communication skills)
5) the institutional knowledge of architecture of the welfare state and the Italian tax system (assessment of learning ability).
The allocation range of the final grade is :
- From 18/30 : for a level of elementary knowledge of the subject, that is when the student can only take into account the general issues under review ( market failures , regulatory and welfare state , tax theory , Italian tax system ), set up at least basic graphical analysis of the economic aspect analyzed.
- To 30/30 , with eventual praise, if the student will show an adequate command of the technical and economic language, will systematize in a logical and coherent fashion the knowledge he or she has acquired, will formally set the reference economic models and will support the analysis with a rigorous graphics processing of the concepts .
- H. S. Rosen e T. Gayer, Scienza delle Finanze, McGraw-Hill, fifth edition, 2018, chapters: 5-6; 10-12; 14-16 (exclude 16.2 and 16.4); 18-21.
(Erasmus students can use the English edition "Public Finance, 10th edition", Mc-Graw Hill).
- The CORE project, The Economy https://www.core-econ.org/the-economy/index.html; Chapters 4; 5; 19 [from 19.5. onwards].
- A. Balestrino, E. Galli e L. Spataro, Scienza delle Finanze, Chapter 6 Part 1.
Additional readings can be made available during the lectures period.