Courtney Coile Spring 2010 Economics 310: Public Economics

Transcription

1 Courtney Coile Spring 2010 Economics 310: Public Economics Contact Information Office: PNE 420 Phone: Office hours: Tuesday 2:45-4:15pm, Wednesday 11:00am-12:30pm, and by appointment Course Overview In this course, we will explore the reasons for government intervention in the economy, the extent of that intervention, and the response of private agents to the government s actions. The goal of the course is to use economic theory and research to inform our thinking about public policy issues. We will discuss a wide range of current issues in the course, including tax reform, climate change policy, and reforms of health care and Social Security. While most examples will be drawn from the United States, the lessons from the course are applicable to other countries. Course Meetings and Prerequisites The course meets Tuesdays and Fridays from 1:30-2:40pm in PNE 139. The course has two prerequisites, Economics 201 and 203. We will be using the tools from these classes in developing our understanding of public economics, so it is not possible to take either of them concurrently with the course. Readings We will be using a textbook, Public Finance and Public Policy by Jonathan Gruber (3 rd edition, 2009). The book is available at the bookstore. We will be doing additional required readings designed to provide insights from economic research on critical policy issues. Some of these readings are individual empirical studies (e.g., similar to your 203 paper), while others are non-technical summaries of one or more empirical studies. These readings are listed on the syllabus below and will be made available through the course conference. Finally, I encourage you to make use of the in the news section of the course conference to post interesting and relevant articles that you run across and to read articles that your fellow students and I post there. While these readings are not required, participating in the conference in this way will deepen your appreciation of the relevance of the material we are learning. Course conference I will use the course conference to make announcements and post assignments and other course materials, so you should get in the habit of checking it regularly. The required readings will also be available there. You can use it to post questions and relevant articles, as noted above.

2 Course Requirements There are several requirements for the course: 1. Assignments: 25% The course will feature 7 weekly assignments, due on Fridays. The content of the assignments will vary from week to week, but may include mathematical problems, short answer questions, and/or short essays. You may work on the assignments with other students and may turn in one assignment per group (no more than 3 students to a group), but are not required to do so. 2. Final Paper: 25% For this assignment, you will select a public policy question of interest to you that has not been discussed extensively in class (I will work with you to identify a suitable topic). The paper will explore the reasons for government involvement in this area and the responses of individuals or firms to the policy, drawing on the existing economic literature. The paper should be pages long and is due on the last day of classes (May 6). Students may choose to work in a group of two and write a somewhat longer paper. 3. Exams: 50% There will be a midterm (worth 20%) and final exam (worth 30%). The midterm will be given in class and the final will be a regular self-scheduled exam during finals period. Both exams are closed book. The midterm will cover all the lectures that occur prior to the exam and the final will be cumulative with an emphasis on the material after the midterm. 4. Class Participation While not formally a part of the final grade, your participation in class discussions of the readings and other material is essential for creating an interesting and intellectually stimulating classroom environment. Class participation may be taken into account if you are on the border between one grade and the next.

3 Syllabus Tues, Jan 26 Introduction to Public Economics Gruber, Chapters 1-3 I. Taxation Fri, Jan 29 Tues, Feb 2 Fri, Feb 5 Tues, Feb 9 Fri, Feb 12 Tues, Feb 16 Fri, Feb 19 Tues, Feb 23 Tax Incidence Gruber, Chapter 19 Who Pays a Gas Tax? Environmental Economics, 2008 Assignment 1 Due Tax Efficiency Gruber, Chapter 20 The Economics of Pay-Or-Play Mandates, NBER Bulletin on Aging and Health (BAH), 2007 Introduction to Income Taxation Gruber, Chapter 18 The Incidence of Mandated Maternity Benefits, American Economic Review, 1994 Assignment 2 Due Income Taxes & Labor Supply Gruber, Chapter 21 Income Taxes & Labor Supply II Behavioral Responses to Taxes: Lessons from the EITC and Labor Supply, Tax Policy and the Economy, 2006 High Income Taxpayers are More Responsive to Marginal Tax Rates, NBER Digest, July 2000 No Class Monday Schedule Income Taxes & Savings Gruber, Chapter 22 Savings Incentives for Low- and Middle-Income Families: Evidence from a Field Experiment with H&R Block, Quarterly Journal of Economics, 2006 Assignment 3 Due Taxes on Risk-Taking and Wealth Gruber, Chapter 23 Policy Watch: Cutting Capital Gains Taxes, Journal of Economic Perspectives, 1991

4 Fri, Feb 26 Fundamental Tax Reform Gruber, Chapter 25 Taxing Ourselves: A Citizen s Guide to the Great Debate over Tax Reform, 2 nd edition, Chapter 6, 2000 Assignment 4 Due II. Externalities and Public Goods Tues, March 2 Fri, March 5 Tues, March 9 Fri, March 12 Tues, March 16 Fri, March 19 March 23 and 26 Externalities I: Theory Gruber, Chapter 5 Externalities II : Environmental Externalities Gruber, Chapters 6 and 8 Market-Based Policy Options to Control U.S. Greenhouse Gas Emissions, Journal of Economic Perspectives, 2009 Public Goods Gruber, Chapters 7 and 10 Political Economy Gruber, Chapter 9 Female Socialization: How Daughters Affect Their Legislator Fathers Voting on Women s Issues, American Economic Review, 2008 Assignment 5 Due Education Gruber, Chapter 11 School Vouchers: A Critical View, Journal of Economic Perspectives, 2002 MIDTERM Spring Vacation III. Social Insurance Tues, March 30 Fri, April 2 Tues, April 6 Introduction to Social Insurance I Gruber, Chapter 12 Introduction to Social Insurance II Health Insurance I: Overview and Theory Gruber, Chapter 15 The Role of Consumer Copayments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond, Kaiser Family Foundation Report, 2006

5 Fri, April 9 Tues, April 13 Fri, April 16 Tues, April 20 Fri, April 23 Tues, April 27 Fri, April 30 Tues, May 4 Thurs, May 6 Health Insurance II: Theory Lessons for Health Care from Behavioral Economics, NBER BAH, 2008 How Hospitals Respond to Changes in Medicare Reimbursements, NBER BAH, 2003 Does Medicare Save Lives? NBER BAH, 2008 Health Insurance III: Health Care Reform Gruber, Chapter 16 Incremental Universalism for the United States: The States Move First? Journal of Economic Perspectives, 2008 Assignment 6 Due Social Security I: Overview and Theory Gruber, Chapter 13 Nudge: Improving Decisions about Health, Wealth, and Happiness, pages , 2008 Social Security II: Theory Social Security and Retirement around the World, NBER BAH, 2003 Social Security and Elderly Poverty, NBER BAH, 2004 Social Security III: Social Security Reform Are Trust Fund Surpluses Spent or Saved? NBER BAH, 2005 Final Report of President s Commission to Strengthen Social Security, pages 11-23, 2002 Saving Social Security: A Balanced Approach, pages 1-13, 2004 Unemployment Insurance and Disability Insurance Gruber, Chapter 14 Social Insurance Programs Have Large Labor Supply Effects, NBER Digest, 2002 The Growth in the Social Security Disability Insurance Rolls, NBER BAH, 2006 Assignment 7 Due Redistribution Gruber, Chapter 17 Government Deficits and Debt Gruber, Chapter 4 In-class video: watch excerpts from I.O.U.S.A. and discuss Final Paper Due