Dr Daniel Reck 32L.3.16 and Prof Camille Landais 32L.3.06

This course is compulsory on the BSc in Social Policy and Economics. This course is available on the BSc in Econometrics and Mathematical Economics, BSc in Economics, BSc in Economics and Economic History, BSc in Economics with Economic History, BSc in Environmental Policy with Economics, BSc in Geography with Economics, BSc in Government and Economics, BSc in Mathematics and Economics, BSc in Mathematics, Statistics, and Business, BSc in Philosophy and Economics, BSc in Philosophy, Politics and Economics and BSc in Politics and Economics. This course is available as an outside option to students on other programmes where regulations permit and to General Course students.

Students should have completed Microeconomic Principles I (EC201) or Microeconomic Principles II (EC202) or equivalent.

The first part of Michaelmas term lectures focuses on the issues of equity, efficiency and the role of the state. We begin by looking at questions of equity and alternative theories of the role of the state. We then look at problems of public choice and political economics, and go on to consider the implications of recent research in behavioural economics for welfare analysis. We conclude the first part by discussing issues of market failure, public goods and externalities, including environmental policy. The second part is devoted to the evaluation problem and empirical methods. The third part studies education policies, and the fourth part is devoted to social insurance programs. The final part is devoted to taxation, behavioural responses and the design of tax policy. We begin by examining the effects of taxes and transfers on labour supply and migration, and then go on to consider incomes and behavioural responses at the top of the income distribution. We look at the implications of taxation for economic efficiency and explore the optimal taxation of commodities and income. The final lecture is devoted to the question of development and public finance.

15 hours of lectures and 10 hours of classes in the MT. 15 hours of lectures and 10 hours of classes in the LT.

Feedback is provided for one class presentation and one essay (1,500 words) each term (Michaelmas and Lent).

The recommended textbook for the course is Jonathan Gruber (2011) Public Finance and Public Policy, 3rd edition, Worth Publishers. Many of the readings will be journal articles.

Exam (100%, duration: 3 hours, reading time: 15 minutes) in the summer exam period.