Holcombe, R. (2005) Public Sector Economics: The Role of Government in the American Economy. NY: Prentice Hall.
Hillman, A. L. (2019) Public Finance and Public Policy, Responsibilities and Limitations of Government. (third edition) Cambridge: Cambridge University Press.  (Either  the first [AH1]  or second edition [AH2] is fine. AH3 below refers to chapters in the third edition, AH2 to chapters in the second edition.)

Online Class Notes:  The most recent versions are available via this website, backups available at the course's WVU E-Campus site

COURSE OUTLINE ( PDF)

Introduction: Why Study Public Economics? Growth of Government and Taxation in the United States and OECD countries, changing composition of, increasing centralization and regulation.

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) 

 

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?

AH3: 1.4, 2, 12, B.2
AH2: 2.1, 2.2, 2.3

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.)

11/1, 11/3

The Welfare State: Social Security and Medicare. Application of tools developed in the course to analyze OASDI: nature of tax, the tax burden(s), as subsidies for retirement and healthcare, the median voter model and average benefit levels. History of OASDI, the lock box myth, future of program. Medicare grows faster than the retirement benefits because of technological change, this makes its future deficits more difficult to overcome. Aging of the median voter and the electoral support for social security and medicare.Future taxes and/or deficits. Supplemental References and resources: Social Security Annual Report , Medicare Annual Trustiees Report, CBO.  OASDI History,  Medicare Reforms, (Feldstein on reform), OECD healthcare spending 

Research Paper Due at Midnight via Email (see Paper Topics for a description) 

 

 Institutional Policies and Services: Students are responsible for reviewing policies on inclusivity, academic integrity, incompletes, sale of course materials, sexual misconduct, adverse weather, as well as student evaluation of instruction, and days of special concern/religious holiday statements.