040244 UK Intermediate Public Economics (MA) (2021S)

Prerequisites:

A minimal amount of familiarity with game theory and mathematical optimization will be expected. The necessary game theoretical background can be met by studying Gibbons, "A Primer in Game Theory", Chapter 1, Sections 1.1 and 1.2. Weeks 1 and 2 of the Coursera lecture from the University of British Columbia (Jackson et al, "Game Theory") are a great alternative. Students who studied microeconomics at an advanced undergraduate level (esp. consumer and producer theory) should have the necessary optimization background. Else, they may find it in Jehle and Reny, "Advanced Microeconomic Theory", appendix A1, sections A1.1, A1.2, and A1.4, as well as appendix A2, sections A2.1, A2.2, and A2.3.

Course Outline:

Economists rarely come to an agreement when discussing the optimal size or duties of the public sector. In this class and its advanced sequel we will see how one may use the standard microeconomics toolbox (game theory, consumption and production theory, equilibrium theory) to formalize important arguments for and against the expansion of the public sector.

Following usual approaches, we will keep the analysis of government activities and that of government finances separate. Only the former will be analyzed in this course. Students will discuss the desirability of government intervention on different normative grounds: efficiency, justice, and paternalism.