Economics of Policy Issues
Module Code: EC306B
Module Title: Economics of Policy Issues
- ECTS Weighting: 5
- Semester/Term Taught: Michaelmas Term
- Contact Hours: 22 hours of lectures and 4 hours of tutorials
- Module Personnel: Lecturer - Professor Andrea Guariso
Module Learning Aims
The module will provide an introduction to, and survey of, the theory of welfare economics. We will examine the broad philosophical and legal basis of a market economy, paying particular attention to the issues of property rights and the rule of law. We will then explore in some details the issue of collective benefits arising from public goods, highlighting the information problem associated with the optimal provision of such goods. This will be followed by a detailed discussion of externalities, where, among other things, we will study the different ways in which they are addressed: private solutions, public policy, and prohibition of markets.
On successful completion of this module, you will be able to:
- Identify and analyse the key issues involved in welfare economics
- Discuss the basic economic and broad philosophical principles underlying these issues
- Appraise the various arguments/theories relating to these issues
- Formulate a balanced, critical judgment on the status of each of these debates.
- The market, responsibilities and limitations of government and social justice. A first account.
- Property rights and the rule of law. Principles. Life under maximal government.
- Public goods. Types of public goods. Prisoners' Dilemma. Information problems. Cost-benefit analysis. Financing.
- Externalities, private and public solutions.
- Prohibition of markets: paternalism and hyperbolic discounting.
Recommended Reading List
The core book is Arye L. Hillman, Public Finance and Public Policy: Responsibilities and Limitations of Government (2nd Edition) Cambridge University Press 2009 and it is advised that you order this now through any bookshop.
Marks for the course will be allocated as follows;
Michaelmas Term: 50% on the mid-term test in week 8 and 50% on the final take-home assignment.