US Capital
Public Economics
Econ 441
WVU, Fall 2016 
Professor Roger D. Congleton
Old Roman
                    Capital (the Palatine)
Class room and time: B&E 240 4:00-5:15 Tuesday -Thursday

Office:   405 B&E 
Phone:   304.293.7866
E-Mail:  (the most reliable contact method)
Office Hours: 
Wed.: 2:00-3:30,
Thursday: 2:00-3:30 
and by appointment
Suggested Texts:
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
Introduction: Overview of fical policy in the United States and OECD countries: growth of tax and expenditures, composition of, increasing centralization

Positive and Normative Analysis: Positive and normative analysis: the Pareto principles, Cost-Benefit Analysis, Rational choice as an application of cost-benefit analysis 
US Statistical Abstract
World Bank Statistics
H: 1, 2 / AH1: 1
AH2: 1
Deficits (Fred) Size AEI
Review of Economic Tools: The Net Benefit Maximizing Model of human choice, and the competitive theory of demand and supply, consumer surplus and profit.  Introduction to Tax Analysis.
Principles of Tax Analysis: 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 Bush Taxcut Expirations, 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 , 9.1
US Tax History / Wiki
Principles of Expenditure Analysis: Impacts of subsides on market equilibria, deadweight losses in the long and short run, conditional marginal and lump sum subsides. 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: 5.1
Externality Problems and Solutions. Externalities and Market Failures, Coasian Contracts, Pigovian taxes and subsidies. Applications: air and water pollution, public amenities.
H: 4, 5
AH1: 2.1-2, 4.1, 4A-C
AH2: 3.1, 5.1, 5.2, 5.3
10/4 Discussion and Review for the First Exam
Study Guide I
First Examination
Exams returned and Reviewed

Public Goods Problems and Solutions: Public and Private Goods, the free rider problem; Pareto optimal supply of public goods, Samuelsonian and Lindalh Taxes; Applications: national defense, highways, national parks.
H: 4, 5
AH1: 2.1-2, 4.1, 4A-C
AH2: 3.1, 5.1, 5.2, 5.3
10/25 The Electoral Demand for Public Goods (and Taxes): The median voter model and the demand for public services.
 H: 7 
AH1: 3.1, 3.2, 4.2
AH2: 6.1, 6.2
AH1: 6.1, 6.2, 6.3, 6C
AH2: 2.1, 2.2, 2.3
Public Finance and Relationships Between Governments: Voting with Your Feet (the Tiebout Model), Yardstick Competition, Decentralization, Intergovernmental Externalities and Economies of Scale (an optimal federal system). Applications: decentralization, fiscal federalism, capital flight.(Pew on Central Gov as Source of State Revenues.)
H: 24
AH1: 9.1
AH2: 9.3

Paper Topics
H 20 ,  AH2: 8
AH1: 5.2
RJ Samuelson

Applications: Deficits:  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]
CBO Report
11/15 Tax Reform: Notes on US Taxation,  Co-Chairs Proposal to Balance the Budget / Ryan Tax Reforms (House 2016), HRC Proposal, History of Taxation in the US , Tax Museum and History
H: 20, 22 / AH1: 5.1, 5B, 10.1, 10.B
AH2: 8.1, 8.2, 8.3
Forest From Trees Lecture / Paper Workshop

Thanksgiving Break No Class

Review for Second Exam
Study Guide II
Second Examination

Exams Returned / Overview of Class

Research Paper Due at Midnight