University of Wisconsin-Madison, Department of Economics

Economics 441: Analytical Public Finance

Fall 2007

http://www.ssc.wisc.edu/~mbrown/441.htm

 

Prof. Meta Brown                                                                     Lectures: MW 2:30-3:45pm

Office: 7442 Social Science                                                                       22 Ingraham

Hours: 3:45-4:45 MW

Phone: 262-8789                                                                         Final Exam: December 19,12:25

Email: mbrown@ssc.wisc.edu

 

Teaching Assistant: Megan Ritz, 6413 Social Science, 262-4542, office hours TBA

 

In Economics 441 we will examine the nature of public goods and the role of government in society, with emphasis on the effects of government tax and expenditure policies on individual and corporate decision-making and welfare.

 

Prerequisite  Economics 301

 

Text     Harvey S. Rosen and Ted Gayer, Public Finance (8th Edition: McGraw-Hill Irwin, 2007).

            This text is required.

 

Materials presented in lecture will include some charts and diagrams from Understanding USA by Richard Saul Wurman and The Coming Generational Storm by Laurence J. Kotlikoff and Scott Burns.  These books are not required, but they are relatively inexpensive and may be of interest to some students.  The class web page contains additional information on them.

 

Grading

 

PROBLEM SETS (30%):  Three problem sets will be assigned during the semester.  These will be collected and selected problems will be graded.  Group work is permitted, and one problem set may be submitted by three or fewer group members.  Take special care to understand all solutions to problem sets, as this will be important preparation for the final exam.

 

PRESENTATION (10%):   Students will give presentations in small assigned groups during the last weeks of the semester. Broad presentation topics will be assigned, and each group will speak for 20 minutes, with the goal of stimulating productive class discussion.

 

MIDTERM (25%):  The midterm examination will be held on Wednesday, March 20.

 

FINAL EXAM (35%):  The final examination will be held on Wednesday, May 15 at 10:05am.

 

Class web site

 

The syllabus, problem sets and lecture notes will be posted on the class web site, www.ssc.wisc.edu/~mbrown/441.htm.

 

 

 

 

Schedule of Lecture Topics and Readings

 

I.  Introduction

 

A.     Views of Government (Ch 1)                                               September 5

 

B.     Tools of Positive Analysis (Ch 2)                                          September 10

 

C.     Tools of Normative Analysis (Ch 3)                                      September 12

 

 

II.  Public Goods and Externalities

 

A.     Public Goods, Experimental Economics (Ch 4, supplemental material)

September 19

 

B.     Externalities and Environmental Economics (Ch 5, supplemental material)

            September 24, 26

 

No lecture October 3

 

 

III. Public Expenditures

 

A.     Private and Public Health Care (Ch 9-10, supplemental material) October 8, 10, 15

 

B.     Social Security (Ch 11)                                                        October 17

 

 

MIDTERM 1 OCTOBER 22 IN CLASS

 

 

C.     Side Issue: Deficit Finance (Ch 20 and Kotilkoff & Swan)     October 24

 

D. Expenditure Programs for the Poor (Ch 12-13, Wurman)        October 29, 31

 

 

Assignment of presentation groups and topics in class October 31

 

IV.  Cost-Benefit Analysis and Present Value Calculations (Ch 8 partial coverage) November 5

 

 

VII.  Theoretical Issues in Tax Analysis

 

A.     Taxation and Income Distribution (Ch 14 partial coverage)     November 7

 

B.     Taxation and Efficiency (Ch 15 partial coverage)                  November 7, 12

 

C.     Taxation and Equity (Ch 16 partial coverage)                        November 12

 

 

VIII. The U.S. Tax System

 

A.     Personal Income Tax (Ch 17, Wurman)                                November 14, 19

 

B.     Corporate Tax (Ch 19 partial coverage, Wurman)                 November 19

 

 

November 21 Presentation group work in class

 

STUDENT PRESENTATIONS NOVEMBER 26 & 28, DECEMBER 5 & 10

 

 

Final Exam Review December 12 in class

 

FINAL EXAM DECEMBER 19, 12:25 PM IN 22 INGRAHAM

 

[problem set distribution and collection dates TBA]