Public Economics, LUMSA University, 2023/2024 PDF

Economic Policy and Institutions Course L-36 Political Science Academic year 2023/2024 Lecturer: Plinio Limata  Aims of the course In this course we will deal with some major issues, such as: The role of the state in a market economy The market f...

Economic Policy and Institutions Course L-36 Political Science Academic year 2023/2024 Lecturer: Plinio Limata  Aims of the course In this course we will deal with some major issues, such as: The role of the state in a market economy The market failures that justify public interventions within the economic domain Public interventions’ failures  The State and our lives Born in (often) public hospitals that are part of the National Health System Registered in public registers (registry office, NHS, Motorization, etc.) We attend state or officially recognized public schools Subject to laws that guarantee our physical safety, security, freedom of expression and many other freedoms, rights and duties  The State and our lives Recipients of transfers (scholarships and loans of honor, unemployment benefits, social expenditure, pensions and health care) Taxpayers to the state, local authorities and other quasi-state bodies (public television) Employees of public administrations (15% of the population are civil servants) Workers in the private sector but subject to public regulation  The State and our lives What we eat, where we live, how we move depends on public regulation We move through public transport infrastructures (roads, railways and airports) The waste is collected on behalf of the local authority the list is not exhaustive...  State and pandemic Public intervention has been particularly vigorous and widespread in previous years. Public bodies such as the central state, regions, municipalities, and "Europe“ have: regulated our freedom to leave the house, to move between cities, the means to use, the things to wear; Created or modified Infrastructures: e.g., public and private hospitals; viability, etc.; Decided which vaccine to use and when; Intervened in the economy: opening hours and closures of entire sectors; public procurement of health material, research orientation for the vaccine, etc.  Italy, a mixed economy Economic activities are carried out by private companies (for profit, nonprofit, hybrid cooperatives and social enterprises) and by the public sector; The state influences the functioning of competition in the private sector both deliberately and unintentionally through regulation, taxes and subsidies.  Course timetable 60 hours of lectures split into 30 2-hour sessions on: Monday (12 pm – 2 pm; Room 16– Pompeo Magno), Tuesday (10 am – 12 pm; Room 16 – Pompeo Magno), and Wednesday (10 am– 12 pm; Room 16 – Pompeo Magno) Online lessons can be accessed here: https://meet.google.com/udc-ygyh-jye Office hours for student reception: Monday 2.30 pm – 3.30 pm (You have to book by email, and the reception can take place in person or online)  Textbook Title: Public Economics Price: € 34.00 Plinio Limata LUMSA Libera Università Maria Ss. Assunta ISBN : 9781307682106 References to purchase it will be provided soon. We will use a text explicitly created for the course by assembling chapters from various other textbooks. Rosen, Public Finance, 10e Bernheim, Microeconomics, 2e Thomas, Managerial Economics, 13e N. Title of the Lesson Note Reference materials 1 Presentation of the course and What is public economics? Syllabus, teaching material, exam, grade teaching tools 2 Market efficiency and failures Didactic experiment - Apple Market 3 Public economics: aims and Theory and empirical analysis Chapter 2 tools of analysis Public actors and Tragic Institutions, public choices and choices collective actions, tragic choices 4 5 Market efficiency and failures Pareto efficiency, MRS, MRT, and Chapter 1 and Chapter 3 MRTS, Efficiency. 6 Utilitarianism, happiness, Lecturer: Paolo Santori ethics of virtues 7 Happiness and relational Easterlin’s Paradox, World Happiness goods Report, Economy of Happiness, Francesco’s Economy 8 Welfarist social welfare Utilitarian function, à-la Nash, Rawls Chapter 3 and Chapter 6 functions 9 Individual wellbeing, social Lecturer: Dalila De Rosa relations and satisfaction: a beyond GDP perspective 10 Not Welfarist social welfare Nozick, Sen functions 11 Market power: monopoly Review: Elasticity, Economies of Scale Chapter 6 and Chapter 7 and Purpose, Profit Maximization, Deadweight Loss 12 Market power: monopoly Price discrimination Chapter 8 13 Market power: oligopoly Introduction to game theory – Oligopoly: Chapter 9 Cournot, Bertrand, and Stackelberg 14 Market power: solutions Natural monopoly, relevant market, Chapter 10 subsidy, average cost pricing, price cap 15 Market power: solutions Essential infrastructures, utilities, Chapter 10 liberalizations, and Antitrust legislation 16 Market power Exercises 17 Public goods – Theory Non-rivalry and non-excludability, Chapter 11 demand for public goods, and free riding 18 Public goods – Theory Public supply of private goods Chapter 11 19 Public goods Experiment 20 Public goods Exercises 21 Externalities – Theory Private solutions, Coase Theorem Chapter 11 22 Externalities – Theory Public solutions, Pigouvian taxes, cap Chapter 11 & trade systems 23 Externalities Exercises 24 Information Asymmetries Experiment 25 Exam test simulation 26 Information asymmetries – Market incompleteness, Chapter 12 Theory adverse selection, signaling 27 Information asymmetries – Moral hazard, insurance Chapter 12 Theory 28 Income redistribution and Theory Chapter 13 the welfare state 29 Income redistribution and Health expenditure and pension Chapter 14 the welfare state expenditure 30 Income redistribution and Unemployment support Chapter 15 and Chapter the welfare state 16  Platforms and tools https://meet.google.com/udc-ygyh-jye Course: Public Economics Code: ruchs7w You must always have a device (smartphone, tablet, laptop) with you in class to check attendance / or play quizzes on quizziz.com We may use other platforms for additional activities such as ClassEx or Google forms  Other information Attendance Attendance is (morally) mandatory You can attend both in presence and online It is recorded by completing quizzes Those attending 2/3 of the lessons are considered as attending students. Attendance is an objective fact: either you are present, or you are not (even if for very good reasons) Advantages for attending students The course program is the same for attending and non-attending students, but: The final grade can be increased up to 3 additional points thanks to the results of the quizzes The exam for non-attending students is longer Generally, those who have attended pass this course easily on average  Exam It is composed of two parts: A written exam consisting of two / three parts 30 min. multiple choice questions (quiz) 30 min. commentary/essay 30 min. (not attending students) open questions about the book Exercise An oral exam it covers the entire course program  Commentary/Essay Example ROME — The mayor of one town complained that doctors were forced to decide not to treat the very old, leaving them to die. In another town, patients with coronavirus-caused pneumonia were being sent home. Elsewhere, a nurse collapsed with her mask on, her photograph becoming a symbol of overwhelmed medical staff. In less than three weeks, the coronavirus has overloaded the health care system all over northern Italy. It has turned the hard hit Lombardy region into a grim glimpse of what awaits countries if they cannot slow the spread of the virus and ‘‘flatten the curve’’ of new cases — allowing the sick to be treated without swamping the capacity of hospitals.  Code of conduct We are starting the academic year with a new hybrid model of attendance, partly online and partly in person. To participate in the online classes, you must adhere to the following code of conduct: 1. Your presence is required at least 2/3 (20/30) of the lessons to qualify you as an attendant. Attendance at the class is an objective fact, and any absences of more than 1/3 of the types, although adequately motivated, cannot be justified. Attendance is measured by participating in several online quizzes during the lesson. 2. Participation in the online lesson is subject to the following rules: a. must keep the video camera always on for the duration of the class. b. must keep the audio off unless he is invited to speak. 1. Other rules concerning audio and video settings, rules for discussions, and asking questions will be communicated later. 2. Whether you are in the classroom or attending remotely, you will be visible to all participants, so please always maintain a professional appearance, conduct, and language. 3. You will need to check in advance that you can access the platforms provided for teaching (google meet, quizizz, dropbox, etc.) and that the camera and audio settings work. 4. It is forbidden to share the material used and distributed in the classroom, video or audio material of the lessons with third parties. 5. It is forbidden to film or photograph the screen during the lesson. 6. During the administration of tests in the classroom, such as quizzes, it is forbidden to interact with course colleagues. If not respected, there will be penalties! Let’s start using Quizziz! 1. Pick up the phone 2. Go to quizziz.com 3. Use the site, not the App Enter a JOIN CODE To log in use the code I provide.  Your Quizizz name is… To identify yourself, you MUST use your Student ID Report only the first 5 digits (NO "/ XXX")  Waiting for participants to join… Wait for others to log in too Once everyone (or almost everyone is ready) I unlock the quiz which starts automatically  If you log in with an account Log out Change your name and surname with your registration number If you are using the app, please close it and use the browser.