PUBLIC FINANCE

Knowledge and understanding: The goal of this course is to give students a deeper understanding of how public finance works and how taxes impact today's market economies. Throughout the course, students will learn to analyze the key tools used in public sector financial activities, all while exploring the latest theories and ideas in the field.

Applying knowledge and understanding: By learning the key tools used in the public sector, students will be able to read and understand important public finance documents. Gaining analytical skills in different tax models will help them tackle issues in economic and management decisions, while considering the impact of taxes.

Making judgements: Students will be able to evaluate and think critically about different government tax policies and how they affect people's well-being.

Communication skills: Through class interaction and active participation, students will develop strong communication skills and learn to use technical language properly. This will help them explain complex information clearly to both experts and non-experts.

Learning skills: Students will improve their learning skills through active participation, especially during classes focused on applying theoretical concepts with hands-on analytical exercises.

The course includes lectures with slides and extra materials, all available to you on the Studium platform. To help you fully understand the topics and build your analytical skills, the teacher will also lead in-class exercises after each section of the program.

No prerequisites. Although not mandatory, however, a good knowledge of microeconomics tools at intermediate level is strongly recommended. Furthermore some knowledge of intermediate calculus and statistics is endorsed.

Usually mandatory. 

1. Introductory topics:

- Market failures and government intervention. 

- Concepts and models for the analysis of the role of public finance. 

- Concepts, classifications, and statistics of taxation. 

2. General issues of the economic analysis of the effects of taxation: tax incidence, tax burden, and tax neutrality. 

3. Taxation and economic choices

- Taxes and labor supply choices

- Taxes and savings choices

- Taxes and investment choices

- Taxes and corporate choices

4. Optimal taxation

5. Tax evasion

1. J. Gruber. Public Finance and Public Policy. 7th ed. Macmillan Learning, 2022. (Chapters 1, 2, 3, 18, 19, 20, 21, 22, 23, 24).

2. J. Hindriks and G.D. Myles. Intermediate public economics. 2nd ed. Cambridge: MIT press, 2013. (Chapters 15 – excluding paragraphs 15.8 and 15.9; 16 – excluding paragraphs 16.6.2, 16.7, 16.8; 17 – excluding paragraph 17.8).

Your evaluation will consist of a written test and an oral exam. The written test includes three exercises where you'll apply the concepts and models covered in the course, and you'll have 90 minutes to complete it. After your written test is graded, the oral exam will assess your understanding of the same concepts and models. You'll be eligible for the oral exam if you score at least 18 out of 30 on the written test.

It is strongly suggested to review the self-assessment questions and tests reported at the end of each chapter of Texts 1 and 2.