US Capital
Public Economics
Econ 441
WVU, Fall 2018 
Professor Roger D. Congleton
Old Roman
                    Capital (the Palatine)
.
Class room and time: B&E 428 4:00-5:15 Tuesday -Thursday


Office:   405 B&E 
Phone:   304.293.7866
E-Mail:   roger.congleton@mail.wvu.edu  (the most reliable contact method)
Website:  rdc1.net
Office Hours: 
Wed.: 2:00-3:30,
Thursday: 2:00-3:30 
and by appointment
Suggested Texts:
 Syllabus
 
 
Holcombe, R. (2005) Public Sector Economics: The Role of Government in the American Economy. NY: Prentice Hall.
Hillman, A. L. (2009/3) Public Finance and Public Policy, Responsibilities and Limitations of Government. (second edition) Cambridge: Cambridge University Press.  (Either  the first [AH1]  or second edition [AH2] is fine. AH1 below refers to chapters in the first edition, AH2 to chapters in the second edition.)
 
 
Class Notes,  available via this website
 Public Finance Links
 
 
 
 Date
 Readings
8/12
Introduction: Why Study Public Economics? Growth of Government and Taxation in the United States and OECD countries, changing composition of, increasing centralization and regulation.

Methodology of Public Economics: Positive and Normative Analysis. Positive and normative analysis in public economics: Cost-Benefit Analysis, the Pareto principles. The rational choice approach to choice and social science.
US Statistical Abstract
World Bank Statistics
H: 1, 2 / AH1: 1
AH2: 1.1 S1A, S1B
Deficits (Fred) Size AEI
8/21
Review of Economic Tools: The Net Benefit Maximizing Model of human choice, applied to demand and supply,  consumer surplus and profit. 
 
8/28
Principles and Effects of Taxation: Impact of taxes on market prices and output; deadweight loss in the long and short run; neutral taxes and excess burden; Ramsay taxation, progressive and proportional income taxes and the labor-leisure tradeoff. Applications: property taxes, excise taxes, head taxes, and income taxes.  Tax Data: Overviews (WP table of effects of  Taking Stock of Recent Economic Policies (WSJ, Schultz et al)
H: 10, 11, 12, 13
 AH1: 2E, 7.1 and 7.2
AH2: 4.1, 4.2, and 9.1
US Tax History / Wiki
9/11
Principles and Effects of Subsidies: Impacts of subsides on market equilibria, deadweight losses in the long and short run, conditional marginal and lump sum subsides. Normative issues. Applications: farm subsidies, food stamps, rent subsidies, public education, and unemployment insurance.    Data from the Statistical Abstract of the United States
H: 5, 8
AH1:  2.1, 5.2
AH2: 2.1, 5.1
9/18
Why Governments are Useful: Externality Problems and Solutions. Externalities and Market Failures, Coasian Contracts, Pigovian taxes and subsidies. Applications: noise, air and water pollution, global warming.
H: 4, 5
AH1: 2.1-2, 4.1, 4A-C
AH2: 3.1, 5.1, 5.2, 5.3
9/25 Discussion and Review for the First Exam
Study Guide I
9/27
First Examination
10/2
Exams returned and Reviewed


10/4
Why Govenments are Useful: Public Goods and Solutions. Public and Private Goods, the free rider problem; Pareto optimal supply of public goods, Samuelsonian and Lindahl Taxes; Consensus-inducing property of Lindahl taxes. The demand revelation problem.. Applications: gasoline taxes as Lindahl taxes, use fees and national parks, air quality, national defense, gravity. 
H: 4, 5
AH1: 2.1-2, 4.1, 4A-C
AH2: 1.1, 3.1, 5.1, 5.2, 5.3
10/18 Policy Making in Democratic Polities: The Electoral Demand for Public Goods and Taxes. The median voter model and the demand for public services. Convergence to median voter ideal point(s). Dynamics of public policy caused by changes in median voter circumstances or knowledge. Rational ignorance and fiscal illusion. Government Failures.
 H: 7 
AH1: 3.1, 3.2, 4.2
AH2: 6.1, 6.2
11/1
Interest Groups and Public Policy: Olson's Model of Collective Action, Stigler's Capture model, Rent-Seeking Losses, Bureaucracy as a Special Interest Group. Why are some groups more influential than others?
AH1: 6.1, 6.2, 6.3, 6C
AH2: 2.1, 2.2, 2.3
11/6
Election Day--No Classes

11/8
Public Finance and Relationships Between Governments: Fiscal Federalism, Decentralized Policy Making,  Intergovernmental externalities, Conditional grants, Revenue sharing. The Tiebout Model of intergovernmental competition: voting with one's feet, Yardstick competition. Applications: the decentralization theorem, subsidiarity principle, capital flight. (Pew on Central Gov as Source of State Revenues.)
H: 24
AH1: 9.1
AH2: 9.3

REMINDER TO GET PAPERS UNDERWAY
Paper Topics
11/13
H 20 ,  AH2: 8
AH1: 5.2
RJ Samuelson

11/15
Deficits Finance and Reform:  Debt Finance as Intertemporal Taxation  (Revenues, Expenditures, Deficits etc.) Recent Fiscal History, the Politics of Debt, Intergenerational Burden Shifting, Entitlement Deficits and the Baby Boomers [Data: deficits(1), deficits(2), debt(1), debt(2)-public, debt(3)-foreign, debt(4)-fed, GAO deficit forecast, GAO debt forecast] Some Survey Evidence of Support for Reform
CBO Report
AH2:4.3
H17
11/17-25 Fall Recess/Thanksgiving Break

11/27 Forest From Trees Lecture / Paper Workshop
H: 20, 22 / AH1: 5.1, 5B, 10.1, 10.B
AH2: 8.1, 8.2, 8.3
11/29
Review for Second Exam Study Guide II
12/4
Second Examination

12/6
Exams Returned / Overview of Class
 


 
12/12
Research Paper Due at Midnight