This course covers the theoretical foundations of public economics, exploring key concepts such as fundamental theorems of welfare economics, public goods, externalities, moral hazard, adverse selection, tax incidence, and tax efficiency. The course begins with a discussion of theoretical tools in public economics and the efficiency of private markets. We then discuss inefficiencies associated with market failures and possible solutions. Next, we introduce a theoretical analysis of the effects of taxation. We analyze the rationales behind public unemployment insurance, health insurance, and pension insurance. We discuss the methods used to evaluate the efficiency of government spending. Finally, we apply theoretical knowledge to a discussion of some of the most important challenges of recent years: climate change, the Covid-19 pandemic and population aging.

Students will:

• Learn about theoretical tools of economic policy analysis
• Learn to distinguish between the direct effects intended by regulations and unintended consequences due to market adjustments.
• Apply theoretical knowledge in the discussions on the most pressing economic policy issues
• Understand the importance of the efficiency-equity trade-off

This is a course with immanent examination character (PI), attendance is mandatory. Students may have a maximum of 2 absences.

Teaching methods include lecturing, interactive tasks, discussion in class, and written individual assignments.

Grading scale:
100%- 90% = Excellent
 89% - 80% = Good
 79% - 65% = Satisfactory
 64% - 51% = Sufficient
   50% - 0% = Inadequate

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