Module Specifications..
Current Academic Year 2023 - 2024
Please note that this information is subject to change.
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Description 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. | |||||||||||||||||||||||||||||||||||||||||
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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. | |||||||||||||||||||||||||||||||||||||||||
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 |
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Indicative Content and Learning Activities
General ContextWithin 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.IntroductionWhat 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 EquityA 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 SolutionsThis 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 TheoryThis 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 taxesIntertemporal ConcernsIn 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 agendasOptionallyDepending 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. | |||||||||||||||||||||||||||||||||||||||||
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Indicative Reading List
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Other Resources 16221, Other, 0, Other readings will come from selected articles in Economics journals, | |||||||||||||||||||||||||||||||||||||||||
Programme or List of Programmes
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