Department of Economics, Unit Catalogue 2009/10 |
ES20019: Public finance (formerly EC20169) |
 Credits:
| 6 |
| Level:
| Intermediate |
| Period: | Semester 1 |
| Assessment:
| EX 100% |
| Supplementary Assessment: | Like-for-like reassessment (where allowed by programme regulations) |
| Requisites:
| Before taking this unit you must take ES10001 and take ES10005 and while taking this unit you must take ES20011 |
| Description: | Aims: * To enable students to apply principles of microeconomics to analyse public finance theory. * To enable students to understand and assess policy issues in public finance. * To make students aware of the different schools of thought in public finance. Learning Outcomes: At the end of the course unit, students should be able to: * Apply microeconomic theory rigorously to assess theoretical issues in public finance. * Understand and evaluate policy debates in public finance. * Apply theory to assess reform of public spending and taxation against a set of criteria (which includes efficiency and equity). * Understand how microeconomic theory can be applied to explain dissonance between policy prescription and policy adoption. Skills: The following are facilitated and assessed: Abstract reasoning; information synthesis; diagrammatic skills; writing skills; numeracy skills. Content: In the first part of the course the focus is on taxation. The welfare costs of taxation are estimated. Tax incidence is discussed. The effect of tax on work effort, saving and risk taking is explored (and, in particular, the claims of economists who emphasise a 'supply side' focus are assessed). Tax expenditures (e.g. tax relief for charitable giving) are appraised. Tax evasion and policy to deter tax evasion is discussed. The choice between taxation and government borrowing is examined. In the second part of the course the focus is on public spending. The rationale for public spending is assessed. Criteria for evaluation of public expenditure are discussed. Techniques for evaluation of public expenditure (e.g. Cost Benefit Analysis) are examined. Estimates of the return to public expenditure are assessed. Key Texts: * Rosen, H .S. Public Finance, seventh edition (McGraw Hill, 2005). * Cullis, J. and Jones, P. Public Finance and Public Choice, second edition (Oxford University Press, 1992). * Hyman D. N. Public Finance: A Contemporary Application of Theory to Policy, seventh edition (Harcourt: 2002). |