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Module Specifications..

Current Academic Year 2023 - 2024

Please note that this information is subject to change.

Module Title Public Finance
Module Code EF213P
School DCUBS
Module Co-ordinatorSemester 1: Caroline McGroary
Semester 2: Ann Largey
Autumn: Caroline McGroary
Module TeachersAnn Largey
Caroline McGroary
NFQ level 8 Credit Rating 5
Pre-requisite None
Co-requisite None
Compatibles None
Incompatibles None

The purpose of this module is to provide students with an understanding of the role and impact of government on the functioning of a market economy, specifically in the provision and funding of goods and services. Students will learn to apply microeconomic theory to concrete issues of social relevance. Reasons for government involvement in the market (distributional aims, provision of public goods and correction of externalities) will be discussed, as will the economic issues associated with taxation and the allocation of tax revenues. Focus will be on the Irish economy and students will be required to familiarise themselves with aspects of government policy; the stated goals of government and the financial context and constraints in which policy is applied. Students will attend weekly lectures, participate in class discussions and complete a self-directed project.

Learning Outcomes

1. Explain the economic reasoning for government involvement in a market economy.
2. Evaluate policy responses aimed to address problems caused by market imperfections and issues of equity.
3. Use intermediate level microeconomic models to predict the effects of monetary and fiscal policies on economic agents.
4. Assess the practical problems associated with financing and provision of public services (eg. difficulty in finding an equitable, optimal tax system, finding optimal incentive systems for public service providers).
5. Collate and synthesise information to evaluate government policies in practical situations.

Workload Full-time hours per semester
Type Hours Description
Lecture24No Description
Assignment Completion20Reading, collection of data and write-up of term essay
Independent Study36Reading in preparation for lectures
Directed learning20Questions for basis of classroom discussion
Independent Study25Class Test Preparation
Total Workload: 125

All module information is indicative and subject to change. For further information,students are advised to refer to the University's Marks and Standards and Programme Specific Regulations at: http://www.dcu.ie/registry/examinations/index.shtml

Indicative Content and Learning Activities

General Context
Within the course we will examine why there is a need for government involvement in provision of goods and services and how public expenditures should be financed. Throughout the course theory will particularly be applied to analysing current topics of interest within the Irish economy.

What is public finance? Size of public sector, Comparison of public expenditures between OECD countries. Where does Ireland fit? Most recent budget and predictions for future budget.

Efficiency and Equity
A review of how a perfectly competitive market works to achieve efficiency, and consideration of the need for intervention to promote equity. Review of Fundamental Theorems of Welfare Economics.

Externalities, Public Goods, Private Information and Second Best Solutions
This section will expand on the need for government intervention in the economy in order to tackle inefficiencies resulting from market imperfections. These include a) consideration of externalities (why the Coase Theorem might not hold and policy implications) b)National public goods (Samuelson Rule, role of voting, Groves Clark Mechanism and policy interventions)and Local public goods provision and 'voting with feet' (optimal provision, Tiebout model) c) Asymmetry in information and problems of contract setting (with relevance to Public Sector Employment)

Tax Theory
This section will concentrate on the means of raising revenue to fund public expenditure: tax. Current Irish tax policy will be addressed in the context of optimal tax theory and the 'guiding principles' of taxation. We will consider whether optimal tax theory policy contravenes common guiding principles. Topics will include: Taxes and efficiency, tax incidence, taxes and household behaviour, corporate income taxes

Intertemporal Concerns
In this section we will examine the longer-term effects of expenditure and tax policy in the context of rational vs short-sighted agents. Topics could include: Ricardian Equivalence, Ability of government to 'buy votes', Belief in government electoral agendas

Depending of time available one or more of the following topics in Public Finance will be covered: A. Benefit-cost analysis: measuring benefits and cost (a case approach), B. Topics in Public Finance: income distribution, pensions, education, health care, poverty, social security.

Assessment Breakdown
Continuous Assessment100% Examination Weight0%
Course Work Breakdown
TypeDescription% of totalAssessment Date
Projectn/a30%Week 9
In Class Testn/a70%Sem 2 End
Reassessment Requirement Type
Resit arrangements are explained by the following categories;
1 = A resit is available for all components of the module
2 = No resit is available for 100% continuous assessment module
3 = No resit is available for the continuous assessment component
This module is category 1
Indicative Reading List

  • Rosen,H: 0, Public Finance,
  • Stiglitz,J.E: 0, Public Sector Economics,
  • Munro,A. and S.Connolly: 0, Economics of the Public Sector,
  • Hyman,D.N: 0, Public Finance,
  • Devereux,M. (editor): 0, The Economics of Tax Policy,
Other Resources

16221, Other, 0, Other readings will come from selected articles in Economics journals,
Programme or List of Programmes
BSIFBBS (International Finance)

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