Public economics is the economics of collective decision making and collective
action. This domain of economics research is concerned with both positive and
normative questions. We will study both how collective actions affect the world,
but also which collective actions we should take. As pointed out by David Hume,
moving from "is" to "ought" is a difficult step, and a passing acquaintance with
politics will show that not everyone agrees about which policies are best. The
goal of this course is to deepen students understanding of several important
issues faced by contemporary society, and how collective responses to those
issues which will shape their futures.
The course will be structured around four themes. Each theme will be broken
up into four segments or modules: The core positive economics of the topic,
the normative or welfare economics of the topic, discussion of recent research,
and debate.
1 Taxation
1. Review of basic public economics results on taxation
2. When is taxation justified? Arguments from efficiency vs arguments from
rights
3. Capital taxation and concentration, arguments from consumer welfare vs
arguments from politics
4. Debate: Should we tax bequests?
2 Inequality
1. Public economics of transfers: A taxonomy of inequality
2. Distributive justice, and when inequality is wrong
3. Poverty, Wealth taxes and transfers
4. Debate: Are open borders incompatible with a welfare state?
3 Climate Change
1. Public economics of climate change
2. How should we treat future people?
3. Uncertainty and disaster
4. Debate: Developing countries should be compensated
4 Automation
1. Public economics and technological change
2. Work in a robot economy, required or protected?
3. Hollowing out the middle: Automation or trade?
4. Debate: Universal basic income, yes or no?