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Teacher(s)

Truyts Tom;

Language

English

Prerequisites

The prerequisite(s) for this Teaching Unit (Unité d’enseignement – UE) for the programmes/courses that offer this Teaching Unit are specified at the end of this sheet.

Learning outcomes

At the end of this learning unit, the student is able to :

Understand the important roles and the functioning of the state in a market economy. Solve exercises related to taught theories. Evaluate the relevance of public policies. Write an academic paper while adhering to specific methodological guidelines. Execute and present an empirical analysis of a public policy problem using realistic micro-data. Identify relevant academic references to address a question of public policy analysis. Summarize the scientific literature on a topic. Orally present a paper.

Content

a) Lectures
The first part of the course will be devoted to the normative analysis of the role of the state in the economy. We first introduce the economic problem and the various coordination mechanisms. We proceed with market efficiency and its limits, public goods, externalities, the analysis of economic inequalities and the redistribution of incomes, collective decision-making processes, and ultimately cost-benefit analysis.
The second part of the course studies the Belgian fiscal framework, and situates the Belgian reality in a historic and international context. We study the Belgian public expenditures by means of the budget and national accounts, and introduce different theories to explain the growth of the public sector. Next, the course focusses on analyzing government revenue. We will study the Belgian tax system, with special attention for the personal income tax, and analyze the role of public debt. We consider the economics of taxation and provide a brief introduction to the theory of optimal taxation.
The third part will develop the theory of fiscal federalism and analyze the federal structure of Belgium.

1. Introduction: the economic problem and public finances (Rosen & Gayer, Chapters 1 & 2)
2. Market efficiency: theorems of welfare economics and market failures (Rosen & Gayer, Chapter 3)
3. Public goods (Rosen & Gayer, Chapter 4)
4. Externalities (Rosen & Gayer, Chapter 5)
5. Analysis of economic inequality and income redistribution (Rosen & Gayer, Chapter 12)
6. Political economy (Rosen & Gayer, Chapter 6)
7. Cost-benefit analysis (Rosen & Gayer, Chapter 8)
8. Public expenditure (in part: Rosen & Gayer, Chapter 6)
9. Taxation and tax policy in Belgium
10. The public debt (Rosen & Gayer, Chapter 20)
11. The Economics of Taxation: Efficiency and Incidence (Rosen & Gayer, Chapters 14-15)
12. The principles of optimal taxation (Rosen & Gayer, Chapter 16)
13. Fiscal federalism and the Belgian federal system (Rosen & Gayer, Chapter 22)

b) Exercise sessions

The exercise sessions will focus on the analysis of a real-world database and the evaluation of public policies.

Teaching methods

a) Lectures
The lectures consist of a theoretical and formal explanation of public economic theory and an introduction to the Belgian institutional context. We devote special attention to a number of case studies and to current societal debates.

b) Exercise sessions
The students learn concrete techniques for analysing economic policy, and then start working in group on a real data set. They present their analyses and findings in a final report, which will be presented in front of the class. The teaching team guides the students through the data analysis and writing process by means of regular meetings during the semester.

Evaluation methods

Oral exam (75% of final result) and evaluation of the group work (25% of final result).

Bibliography

Harvey S. Rosen et Ted Gayer (2014) Public Finance, Global Edition, MacGraw-Hill, New York.
Syllabus à base des diapositives des exposés magistraux disponible au service de reprographie.

Faculty or entity

> ESPB