MPP1618 syllabus public economics

Course objective This course provides students with the basic tools of microeconomics and public economics to understand and analyze public policy in a market economy.. The first half o

COURSE SYLLABUS

………

Public Economics

1 Course code: 【filled later by Vietnamese office, so please leave it as blank】

2 Numbers of credits: 2

3 Prerequisite courses: Microeconomics for Public Policy

4 Teaching language: English

5 Lecturers

 Morimitsu Kurino, Associate Professor, Ph.D., University of Tsukuba

 Shigeto Naka, Professor, Ph.D., University of Tsukuba

6 Course objective

This course provides students with the basic tools of microeconomics and public economics to understand and analyze public policy in a market economy The first half of the course teaches introductory microeconomics to understand the workings of market economies without public goods The second half explicitly looks at various situations of market failure, in particular, when there are public goods or/and externalities Additionally, the perspectives of the political

economy is introduced, including the emergence of the state, a problem of collective decision-makings, and rent-seeking

7 Learning outcomes

7.1 Knowledge competence

Basic knowledge about public policy in a market economy should be achieved

7.2 Skills

Logical thinking about public policy

7.3 Ethics

Potential impacts of public policy on markets should be understood

8 Assessment methods/Grading system

8.1 Attendance & class participation

Class participation is compulsory Note that you will lose your credit if you miss three classes or more

8.2 Mid term & final exams

There is one mid-term exam in the end of the first half during the course Moreover, there

is the final exam at the end of the semester Grades are determined based on the sum of the two results Attendance 10%, mid term 30%, final exam 60%

9 Leaning materials

(Listed in the order: author’s name, book title, and publisher, year of publication)

9.1 Required textbook and other material

 N Gregory Mankiw, Principles of Economics, 6th edition, South-Western Cengage Learning, 2010

 L Arye Hillman, Public Finance and Public Policy, Cambridge, 2003

9.2 Reference material

10 Course description

The first half of the course presents the introduction to microeconomics by using graphs and tables so that no advanced mathematics is required In particular, we discuss what economics is, a market, demand/supply, and welfare achieved in a market economy The latter half of the course introduces the fundamentals of public economics We focus on the topics such as public goods, externalities, as well as majority voting and other

political economic perspectives The discussions are intuitive while utilizing graphs and tables

11 Course contents

 Class 1: Ten principles of economics (Mankiw, Chapter 1)

We provide ten principles of economics about how people make decisions, how people interact, and how the economy as a whole works

 Class 2: Thinking like an economist (Mankiw, Chapter 2)

We deal with how an economist thinks about an economy as a scientist and a policy advisor

 Class 3: Interdependence and the gains from trade (Mankiw, Chapter 3)

Our economy is interdependent with any in another country We consider how we gain trades among countries

 Classes 4, 5, and 6: The market forces of supply and demand (Mankiw, Chapter 4)

We introduce the theory of supply and demand, and then consider how buyers and sellers behave and how they interact with one another in a market economy The goal is

to understand how supply and demand determines prices in a market economy and how prices, in turn, allocate the economy’s scarce resources

 Classes 7, 8, and 9: Elasticity and its application (Mankiw, Chapter 5)

Elasticity Elasticity is a measure of how much buyers and sellers respond to changes

in market conditions When studying how some event or policy affects a market, we can discuss not only the direction of the effects but their magnitude as well We introduce such a notion of elasticity and its applications

 Classes 10 and 11: Supply, demand, and government policies (Mankiw, Chapter 6)

We analyze various types of government policy using only the tools of supply and demand We begin by considering policies that directly control prices such as rent-control laws and the minimum wage laws Then we discuss the impact of taxes

 Classes 12, 13, and 14: Consumers, producers, and the efficiency of markets (Mankiw, Chapter 7)

We take up the topic of welfare economics, the study of how the allocation of resources affects economic well-being We begin by examining the benefits that buyers and sellers receive from taking part in a market We then examine how society can make these benefits as large as possible This analysis leads to a profound conclusion: The equilibrium of supply and demand in a market maximizes the total benefits of buyers and sellers

 Class 15: Mid-term exam

 Class 16, and 17: Review of the market system, and the emergence of the state (Hillman, Chapter 1) We review the model of perfect competition and see how the market system achieves the efficient allocation of resources We then examine the theory of market failures We try to understand how a strong yet good government is needed to support the market system We also discuss Olson’s (1993) concept of how governments emerge and what that model implies

 Class 18, 19, 20, and 21: Public goods and the normative role of the government (Hillman, Chapter 2) We discuss the concept of public goods and analyze their efficient provisions Also we discuss the Nash-response (free-riding behavior) in relation to the provision of public goods and related problems

 Class 20, and 21: Voting and public goods (Hillman, Chapter 3) We discuss the importance as well as problem of majority voting in relation to the provision of public goods Various paradoxes and problems pertaining to the institution of voting are discussed

 Class 25, 26, and 27: Externalities (Hillman, Chapter 4) We discuss the problems of external economies and diseconomies, and analyze the normative role of the government Particularly, we consider how public policies are conducted in order to resolve or mitigate these externality problems

 Class 28: Rent-seeking and political economy (Hillman, Chapter 6) We briefly discuss various theories of government failure

 Class 29: Overall review

 Class 30: Final-exam