Public Economics

Abstract

The aim of the lecture is to show how microeconomic theory can be extended and adapted to shed light on what governments do. Government actions have some important consequences: they alter incomes and they change incentives. The lecture explains how basic principles – like welfare economics and public choice - can be employed to understand the impact of government activities on the economy.

Objective

The objective of the lecture is to give an overall perspective on the economic role of the government and to show under which conditions markets work well. Further, we show how the theoretical models can be used to analyze a variety of public programs, like environmental and energy related programs. Some of the questions the lecture gives an answer are: How does the government affect the economy? Why are some economic activities undertaken in the public sector and other n the private?

Content

Topics 1. Introduction, The public sector in a mixed economy 2. Public expenses and revenues in Switzerland and justification for the intervention of the state 3. Efficiency on competitive markets 4. Market failure: justification for the public activity 5. Public choices 6. Environmental policy and instruments 7. Environmental valuation: Revealed preference methods 8. Environmental valuation: Stated preference methods 9. Cost benefit analysis 10. Energy market and deregulation 11. Taxation 12. Fiscal Federalism

Resources