Ateneo - UPO

The course analyzes the determinants of so-called “market failures” and income distribution inequality, as well as potential government interventions to address them. Under ideal conditions, competition promotes economic efficiency, leaving little room for public sector intervention. However, in certain circumstances, the market leads to inefficient solutions, and public intervention becomes desirable. In addition to cases of market failure, public intervention can also be justified by issues of inequality in the distribution of income, wealth, and opportunities. On the side of public spending, particular attention will be given to pension systems and health insurance. We will also analyze the main tools of tax imposition.

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.

Students with physical disabilities, Learning Disabilities or Special Education Needs can request specific services and tools via the Staff Sviluppo e Coordinamento Carriere e Servizi alle Studentesse e agli Studenti, consulting the University webpage: https://www.uniupo.it/en/services/servicesstudents-physical-or-learning-disabilities Students with disabilities, learning disabilities or special education needs, once they have contacted the University Staff, can refer to the tutor in charge of the course to define the examination modalities, concerning academic aspects.

Written exam. Students who attend class have the option to give a short presentation, which will be graded from 0 to 2 points. These points will be added to the final exam score.

Extended Program: a) Pareto efficiency in competitive markets: the first welfare theorem, lump-sum transfers, and the second welfare theorem; b) Deviations from efficiency: public goods, club goods, and local public goods, externalities, imperfect competition, informational asymmetries; c) Taxation: on goods and income; d) Inequality and poverty: optimality and comparability; measures of inequality and poverty; e) Size and growth trends of the public sector; f) Social security in Italy: rationale, structure, financing, pension rules, the process of reforming the Italian social security system: adequacy and distributive scope; g) The Italian National Health System.

The course aims to provide students with some key insights for evaluating public policies adopted in modern welfare systems and related reform proposals.