| Academic year: | 2007-2008 |
| Course code module | FTEBAEB320 |
| Semester: | 1st semester |
| Credits: | 6 |
| Study load (hours) | 168 |
| Theory (hours): | 45,00 |
| Practice/Exercises(hours): | |
| Other (hours): | |
| Part-time program: | 1/2 |
| Instructor(s) | August Blauwens
Jacques Vanneste
|
| Language of instruction: | Dutch |
| Semester exam information: | semester exam in January |
| Contract restriction information: | |
1. Prerequisites
*Algemene competenties
The student should have a basic understanding of microeconomics and macroeconomics
*Sequentiality
FTEBAAE210 Macroeconomics
FTEBAAE220 Microeconomics
2. Objectives (expected learning outcomes)
Through group assignments, the students learn to gather information, to report, and to critically assess current topics in public economics, public finance and cost-benefit analysis. Students are required to complete a (group) assignment on the Belgian federal budget (macroeconomic budget goal, fiscal measures, social policy,..).
3. Course content
This course is concerned with the theoretical foundations and evaluation of government action in the economy. The analyses are illustrated by means of numerous examples and real-life cases. Part I deals with the public economy, while part II focuses on cost-benefit analysis. The following topics are discussed:
1. Public economy:
Role and size of the public sector: normative and positive analysis;
Organic and mechanistic view of public action;
Methods of empirical analysis in public finance;
Techniques of normative analysis (principles of welfare economics)
Public goods
Efficient allocation of public goods and services;
Externalities: Coase theorem, Piguouvian taxes
Political economics
Political decision-making: unanimity rule, majority rule, median voter model;
Bureaucratic behaviour: Niskanen model, rent-seeking;
Theories on public sector growth: Wagner, Baumol, Peacock and Wiseman
Income redistribution
Measuring income (in)equality: Lorenz curve; poverty line;
Criteria for income distribution: utilitarianism, Rawls’s maximin criterion;
Redistribution policy: cash versus kind
Taxation
Taxation and income distribution: partial and general equilibrium models;
The excess burden of taxation: the Ramsey rule;
Tax avoidance and tax evasion
2. Cost-benefit analysis
Direct and indirect costs and benefits of public projects;
Assessing public costs and benefits: shadow prices;
Role of uncertainty
4. Teaching method
Direct contact: Lectures
Personal work: Assignments - individual
5. Assessment method
Exam: Written, without oral presentationOpen book
Written assignment: Without oral presentation
6. Compulsory reading – study material
Rosen, H., Public Finance, 7th edition, Boston, McGraw-Hill, 2005, pp. 609
G. Blauwens, Kosten-batenanalyse, Universitas, 2006, 45 p.
7. Recommended reading - study material
Winer, S. & H. Shibata (eds.), Political economy and public finance: the role of political economy in the theory and practice of public economics, Cheltenham, Edward Elgar, 2002, pp. 242
8. Tutoring