EC325      One Unit
Public Economics

This information is for the 2025/26 session.

Course Convenor

Availability

Requisites

Pre-requisites:

Students must have completed EC2A1 or EC2A3 before taking this course.

Additional requisites:

The capacity to read and understand applied research methods as covered in EC2C1 or EC2C3 and EC2C4 is highly desirable.

The first part of the Autumn term content focus on the foundations of public economics. We begin by introducing classical theories concerning equity, efficiency, and the rationales for government intervention in the economy. We discuss market failure in the context of public goods and externalities, including environmental policy. We also discuss problems of public choice and political economics, and the implications of recent research in behavioural economics for policymaking. We also study modern empirical methods that are used to evaluate the causal effects of public policies. The second part of the Autumn term considers social insurance policies, including unemployment insurance, disability insurance, retirement pensions, and public health insurance. We study the economic rationale for government intervention in social insurance and the optimal type and extent of interventions, and we relate this to empirical evidence on the causal effects of changes in social insurance policies.

In the Winter Term the course is devoted to tax and transfer programs. Inequality is a key input to tax and transfer policy, so we begin by critically examining the measurement of and trends over time in income and wealth inequality in various countries. We then move on to consider the various behavioural responses to tax and transfer programs, including labour supply, migration, tax avoidance and evasion.  We look at the effect of taxation on economic efficiency and explore the optimal taxation of commodities and income.  

1 hours of classes in the Spring Term.
15 hours of lectures and 9 hours of classes in the Winter Term.
15 hours of lectures and 10 hours of classes in the Autumn Term.

This course has a reading week in Week 6 of Winter Term.

This course is delivered through a combination of classes and lectures totalling a minimum of 50 hours across Autumn Term, Winter Term and Spring Term.  

Feedback is provided for one problem set and one mock exam each term (Autumn and Winter).

The recommended textbook for the course is Jonathan Gruber (2016) Public Finance and Public Policy, 5th edition, Worth Publishers. Many of the readings will be journal articles.

Exam (100%), duration: 180 Minutes, reading time: 15 minutes in the Spring exam period