Public Finance and Public Policy
Course facts
- Payment: Free, no certificate
- Credits: Non Credit
- Learning style: Self-paced, start anytime
- Resources: Exam Solutions; Exams; Lecture Videos; Problem Set Solutions; Problem Sets
- Before you start: The prerequisite for this course is 14.01 Principles of Microeconomics.
MIT OpenCourseWare details
- As taught in: Fall 2024
- Department: Economics
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The economics of government: externalities, public goods, social insurance, health care, redistribution, and taxation, in recorded lectures.
Why does government intervene in the economy, how far, and how do people respond? This course applies basic microeconomics to policy questions in recorded lectures: externalities and global warming, public goods and cost-benefit analysis, school choice, Social Security and other social insurance, government and private health insurance, redistribution and welfare, and how income, wealth and corporate taxes are set.
What You Will Achieve
- Analyze externalities and policy responses such as those to global warming
- Apply public goods theory and cost-benefit analysis to government spending
- Evaluate social insurance programs, including Social Security and health insurance
- Explain tax incidence and how taxes affect labor supply, savings, and corporations
Program Overview
Externalities and Public Goods
When markets fail and what government can do.
- Why study public finance
- Externalities in theory and practice
- Public goods, cost-benefit analysis, and political economy
- Local public goods, fiscal federalism, and education
Social Insurance and Redistribution
Programs that protect against risk and support incomes.
- Social insurance theory
- Social Security and other social insurance programs
- Health care
- Redistribution and welfare policy
Taxation
Who bears taxes and how they change behavior.
- The tax base and tax incidence
- Tax efficiency and labor supply
- Taxation of savings and wealth
- Corporate taxation and tax reform
Course Completion
Job Outlook
Public finance is used in government budget and policy offices, think tanks, tax and health policy analysis, economic consulting and journalism on public policy.
Good for: Learners interested in policy who want economic tools for judging taxes, social programs and government spending.
Keep in mind: It is built on US programs and tax policy; the only required reading is the instructor’s own textbook, seventh edition.
Bottom line: A recorded public policy course that ties each program and tax to the economic reasoning behind it, with solved problem sets.
Frequently Asked Questions
Which policy questions does the course take up?
The government response to global warming, school choice, Social Security versus private retirement accounts, government versus private health insurance, and how to set individual and corporate income tax rates.
Can I practice with past exams?
Yes. Six problem sets come with solutions, and sample exams from earlier years, a 2022 midterm and a 2020 final, are published with their solutions.
Is there a required textbook?
The only required reading is Public Finance and Public Policy by Jon Gruber, seventh edition, which the recitations also follow chapter by chapter.
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