Ateneo - UPO

This course focuses on market failures and inequality issues and analyses the potential role for government interventions to cope with them. Under ideal conditions, competition promotes economic efficiency, leaving little role for the public sector. In some circumstances, however, private markets fail and government intervention to restore efficiency may be desirable. In addition to market failures, government intervention can also be motivated by inequality in the distribution of income, wealth, and opportunities across individuals. Among the main fields of intervention, one of the largest is pensions. In this course we will analyse in depth the rationale at the basis of the public intervention in setting and structuring the pension systems. We will focus, in particular, on the Italian pension system and its long transition towards financial sustainability. We also analyse other redistributive measures together with the main fiscal instruments to finance public activity.

Hindriks J. And Myles G.D. (2013), Intermediate Public Economics, The MIT Press

The course will introduce students to the standard public economic theory. After attending the course, the student is expected: • to be able to manage quantitative microeconomic tools to analyse market failure problems, equity issues and related government interventions; • to have notions on how public economic theory can be fruitfully applied for undertaking sound empirical analysis of policy making concerning public good provision, market power control, externalities, and inequality; • to learn how to summarize and discuss the results of academic research in public economics.

Basic knowledge of static optimization (that is: first derivatives, lagrangian functions...) and microeconomics are required.

Lessons, seminars, STATA sessions in the lab and discussion of papers.

The slides, exercises and any supplementary materials will be uploaded to DIR at the end of each class.

Written exam (80% of final mark) and presentation of a paper selected from the reading list (soon available on the website, 20% of the final mark). For non-attending students, only the written exam is required.

Program Public economics and economic efficiency: - Pareto-efficiency of competition and First Theorem of Welfare Economics - Lump-sum transfers and Second Theorem of Welfare Economics Departures from efficiency: - Public goods - Club goods and local public goods - Externalities - Imperfect competition - Asymmetric Information Taxation - Commodity taxation - Income taxation Inequality and poverty: - Optimality and comparability - Measures of inequality and poverty Size and growth of Public Sector Social security - Rationale, structure, funding, pension rules, reforms - The Italian pension reform: adequacy issues and distributive effects Health sector

Ability to critically analyse the efficiency and distributive properties of the public economic interventions.