This course provides a foundational introduction to public finance. The first part examines the role of the state in the economy, covering the theoretical and empirical tools of public finance and discussing the rationale for government intervention — including externalities, public goods, and their effects on goods and factor markets, with a particular focus on environmental, health, and labour market issues. The second part turns to the structure of public budgets, addressing budget analysis, deficit financing, and public expenditure at various levels of government, including spending on education and social insurance. The third part focuses on analytical methods used in public finance research, introducing students to cost-benefit analysis, political economy considerations, and the interpretation of empirical and econometric studies in the field.

Upon completion of the course, students will have a solid understanding of fundamental concepts and current developments in public finance, including its key institutional structures. They will be able to apply economic logic to complex public sector issues — such as taxation, regulation, and social insurance — analyze relevant policy problems, and evaluate the welfare effects of different policy options. Students will also be able to critically interpret statistical and econometric analyses.

Attendance is compulsory on the specified dates. A maximum of two missed sessions per specialisation and semester is permitted (regardless of whether excused or unexcused). The third absence from any one session will result in a failing grade at the end of the semester. No compensatory work is required for missed sessions. If you are unable to sit one of the tests for a valid reason (e.g. due to illness), you must provide appropriate evidence.

Lecture, literature analysis, discussion.

Assessment:
•    3 homework assignments: 3 × 6 points= 18 marks.
•    1st test = 30 Points
•    2nd test = 30 Points
•    Report (2–3 pages) on a selected research paper in Focus Area 2 = 12 points. 

A maximum of 100 points can therefore be achieved in total.

Minimum requirement:
A minimum of one point needs to be achieved in each subtask to receive a passing grade.

Grading scale:

< 60 points:             Unsatisfactory
60 points or above: Sufficient
70 points or above: Satisfactory
80 points or above: Good
90 points or above: Excellent

Permitted aids for the exams:

- Calculators without a text storage function
- Candidates whose first language is not German may use a general dictionary (not a business dictionary).

Critical use of LLMs (e.g. ChatGPT) is permitted for take-home assignments.

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A basic understanding of microeconomics.

Consultation hours: by appointment – please register via email

email: shushanik.margaryan@wu.ac.at

Please note that attendance at the first session of the course is compulsory. Failure to attend will result in you losing your eligibility to participate in the course. If you are unable to attend the first session, please contact the course leader in advance.