Public Economics (Ph.D.) Fall 2011

Transcription

1 FAKULTÄT FÜR RECHTSWISSENSCHAFT UND VOLKSWIRTSCHAFTSLEHRE LEHRSTUHL FÜR VOLKSWIRTSCHFTSLEHRE FINANZWISSENSCHAFT UND WIRTSCHAFTSPOLITIK PROF. DR. ECKHARD JANEBA Public Economics (Ph.D.) Fall 2011 Overview: This course has two objectives. First, it provides a review of fundamental concepts and models in the theory of public economics such as optimal taxation and tax incidence. We take a normative and positive perspective, and stress the role of information asymmetries and individual heterogeneity. Its second objective is to selectively study recent work that sheds new light on these classic results, either from an empirical or theoretical perspective. Based on those new insights students are expected to present recent published or unpublished work in order to discuss and and develop ideas for own research. Professor: Eckhard Janeba L7, 3-5, Zi. 229 janeba@uni-mannheim.de Room and time: Fridays 12:00-13:30, P043 Office hours: Tuesdays, 9-10:30 Exams, Problem Sets, etc. Problem sets will be assigned from time to time. You are allowed to work in groups of 2-3 students, but you must submit your own solution. There is no final exam. Each project involves the presentation of and a report on a recent published or unpublished article. The article you choose may come from the reading list indicated by **, but you may choose from outside the reading list (you need to consult with me). Your report (10-12 pages) and the presentation should contain a summary of the main idea, an assessment/critique of the article, and a discussion of possible extensions (research agenda). You should contact me about your plans and ideas before the end of October. Due date for the written paper is December 9, Presentations are at the end of the semester. Your final grade will be calculated as follows: Project (75%), Problem Sets (25%). 1

2 Reading Public Economics is a very broad and diverse field. Unfortunately, there is no book that covers all the material in a way suitable for this course. The book by Gareth Myles: Public Economics, Cambridge University Press, 1995, covers quite well the traditional theory of optimal taxation (among other things). A classic treatment of traditional theory is A.B. Atkinson and J.E. Stiglitz: Lectures on Public Economics, McGraw Hill, 1980 (out of print, a classic) A new and well written textbook is Louis Kaplow, The Theory of Taxation and Public Economics, Princeton University Press, The readings come mostly from journal articles. The reading list contains more articles than I will cover in class. The following notation is used: * Must read ** Possible candidate for student presentation blank Usually classic articles, read if interested READING PART I: Topics in Taxation (a) Overviews *Mankiw, N.G., Weinzierl, M. and D. Yagan (2009): Optimal Taxation in Theory and Practice, Journal of Economic Perspectives 23(4), Mirrlees, J.R. (1997): Information and Incentives: The Economics of Carrots and Sticks, EJ 107, (Nobel Prize Lecture) (b) Optimal Indirect Taxation *Myles (1995), ch. 4. *O Donoghue, T. and M. Rabin (2006): Optimal Sin Taxes, Journal of Public Economics 90 (10-11),

3 **Gauthier, S. and G. Laroque (2009): Separability and Public Finance, Journal of Public Economics 93, Diamond, P.A. and J.A. Mirrlees (1971): Optimal taxation and public production, I and II, AER 61, 8-27, Diamond, P.A. (1975): A many-person Ramsey tax rule, JPubE 4, Sadka, E. (1977): A theorem on uniform taxation, JPubE 7, Wilson, J. (1989): On the optimal tax base for commodity taxation, AER 79, (c) Optimal Direct Taxation *Myles (1995), ch. 5 *Kaplow, L. (2006): On the undesirability of commodity taxation even when income taxation is not optimal, Journal of Public Economics 90, *Gordon, R. and W. Li (2009): Tax Structures in Developing Countries: Many puzzles and a possible explanation, Journal of Public Economics 93, *Simula, L. and A. Trannoy (2010): Optimal income tax under the threat of migration by top-income earners, Journal of Public Economics 94, **Kaplow, L. Optimal Policy with Heterogeneous Preferences (2008), The B.E. Journal of Economic Analysis & Policy, Advances, vol. 8(1), Article 40 **Beaudry, P., Blackorby, C. and D. Szalay (2009): Taxes and Employment Subsidies in Optimal Redistribution Programs, American Economic Review 99(1), **Alesina, A., Ichino, A. and L. Karabarbounis (2011): Gender-Based Taxation and the Division of Family Chores, American Economic Journal: Economic Policy 3, Mirrlees, J.A. (1971): An exploration in the theory of optimum income taxation, REStud.38, Stiglitz, J.E. (1982): Self-selection and Pareto-efficient taxation, JPubE 17, Diamond, P.A. (1998): Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates, AER 88, Saez, E. (2002): The desirability of commodity taxation under non-linear income taxation and heterogeneous tases, Journal of Public Economics 83,

4 (d) Tax Incidence *Atkinson and Stiglitz (1980), ch. 6. *Chetty, R., Looney, A. and K.Kroft (2009): Salience and Taxation: Theory and Evidence, American Economic Review 99(4): **Sallee, J.M. (2011): The surprising incidence of tax credits for the Toyota Prius, American Economic Journal: Economic Policy 3, May, Harberger, A. (1962): The incidence of the corporation income tax, JPE 70, Diamond, P. (1978): Tax incidence in a two-good model, JPubE 9, Kotlikoff, L. and L. Summers (1987): Tax incidence, in: Handbook of Public Economics, vol.2, ch. 16. PART II: POLITICAL ECONOMY OF TAXATION AND SPENDING (a) Size of Government and Role of Politics *Meltzer, A. and S.F. Richard (1981): A Rational Theory of the Size of Government, JPE 89, *Rodrik, D. (1998): Why Do More Open Economies Have Bigger Governments?, JPE 106, *Persson,T., Roland, G., and G. Tabellini (2000): Comparative Politics and Public Finance, Journal of Political Economy 108, *Besley, T. and T. Persson (2010): State Capacity, Conflict and Development, Econometrica 78, **Besley, T. and S. Coate (2010): Political Competition, Policy and Growth: Theory and Evidence form the United States, RES 77, Besley, T. and S. Coate (1997): An Economic Model of Representative Democracy, QJE 112, Husted, T.A. and L.W. Kenny (1997): The Effect of the Expansion of the Voting Franchise on the Size of Government, JPE 105, Besley, T. and S. Coate (1995): Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis, AER 88, Dixit, A., Grossman, G.M. and E. Helpman (1997): Common Agency and Coordination; General Theory and Application to Government Policy Making, JPE 105,

5 S. Coate and S. Morris (1995): On the form of transfers to special interests, JPE 103, Dixit, A. and J. Londregan (1995): Redistributive politics and economic efficiency, American Political Science Review 89, (b) Fiscal Competition and Decentralization *Wilson, J.D. (1999): Theories of Tax Competition, National Tax Journal 52, *Lockwood, B. 2006: The political economy of decentralization, in Handbook of Fiscal Federalism, ed. By E. Ahmad and G. Brosio, Edwar Elgar, *Janeba, E. and G. Schjelderup (2009): The Welfare Effects of Tax Competition Reconsidered: Politicians and Political Institutions, Economic Journal 119, **Kempf, H. and G. Rota-Graziosi (2010): Endogenizing leadership in tax competition, Journal of Public Economics 94, Issues 9-10, Wilson, J. D.: A Theory of Interregional Tax Competition, Journal of Urban Economics 19, 1986, Zodrow, G. R., and P. Mieszkowski: Pigou, Tiebout, Property Taxation, and the Underprovision of Local Public Goods, Journal of Urban Economics 19, 1986, Journal Abbreviations AER EER EJ JPE JPubE QJE REStud. REStat. American Economic Review European Economic Review Economic Journal Journal of Political Economy Journal of Public Economics Quarterly Journal of Economics Review of Economic Studies Review of Economics and Statistics 5