Master's Studies

Graduate program:                        Business Studies (M.Sc.)

Module area:                                  Electives

Module:                                          Elective module 1

Course:                                           Public Sector Economics

                                                        (Ökonomik des öffentlichen Sektors)

Course ID:                                      07-M37-10-01-04

Semester:                                       1st Semester

Credit:                                             6 CP (180 hours)

Examination:                                  Oral examination

Contents of the course

The seminar “Public Sector Economics” gives master’s degree students of the master’s degree program “Business Studies” a further overview of the theoretical and institutional foundations of the economic activities of the public sector. This subject usually is called public finance. “This term is something of a misnomer because the fundamental issues are not financial (that is, relating to money). Rather the key problems relate to the use of real resources. For his reason, some authors prefer the label public sector economics or simply public economics” (Rosen and Gayer 2014: 2).

We will examine the theoretical and empirical issues concerning the microeconomic functions of government, the provision and allocation of public goods and services, publicly provided private goods and services, interventions in the case of positive or negative (environmental) external effects as well as normative and positive aspects of taxation. In addition, the Political Economy will be addressed.

Because boundaries of public finance sometimes unclear, the course follows tradition by focusing on government spending and taxation, but also regulatory policies are part of the course occasionally.

Learning outcomes

After having studied the seminar, with comprehensive economic state-of-the-art analytical instruments the students will be able to identify economic reasons for current state interventions in the case of imperfect market conditions (market failure) and to assess the impact of specific current economic and fiscal policy instruments within a market economy.

• Teaching the ability to understand the economic justification of public activities and its problems.

• Teaching comprehensive economic state-of-the-art analysis.

• Get a comprehensive overview of current relevant economic theory of public activities within a social market economy.

• Teaching the abilities to use and to improve acquired skills to understand current complex problems in the context of public expenditure and taxation.

Competences

• Students will be able to analyze and evaluate an economic market system and its benefits in theoretical terms.

• Students can identify current economic problems in a market system.

• Students can discuss current issues of state intervention into a market system.

• Students can analyze and evaluate the use of several instruments of fiscal policy within a market economy to solve economic problems.

• Students can discuss reform options or economic alternatives.

Workload

Presence:                                       =        28 hours             14 weeks x 2 hours (90 min net)

Preparation and follow-up:             =        70 hours

Self-learning phases:                     =        56 hours

Exam preparation:                         =        26 hours

Sum:                                                       180 hours     

Outline

Chapter 1:                 An Introduction to Public Finance and Public Sector Statistics

Chapter 2:                 Equilibrium and Efficiency

Chapter 3:                 Theory of Public Goods, Common Pool Resources, and Club Goods

Chapter 4:                 Externalities, Basics of Environmental Policy, and Internalization Instruments

Chapter 5:                 Network Infrastructures, Natural monopolies, and Regulation

Chapter 6:                 Public Choice and Political Economics

Chapter 7:                 Taxation and its Problems: General Tax Analysis and Special Tax Analysis

Timetable for blocked course (Kyiv National Economic University)

March 2021 (draft)

Lecture:         total 1,250 minutes net (equiv. 28 SWS in Bremen; in Kiev including discussion)

                       excluding examination

Basic Literature (Textbook)

Rosen, Harvey S. and Ted Gayer (2014), Public Finance. 10th Global Edition, McGraw-Hill, Maidenhead, UK.

Additional Literature (Textbooks; Extracts)

• Hindriks, Jean and Gareth D. Myles (2013), Intermediate Public Finance. 2nd edition, MIT Press, Cambridge, MA, USA.
• Krugman, Paul and Robin Wells (2018), Economics. 5th edition, Palgrave Macmillan, New York.
• Tresch, Richard W. (2008), Public Sector Economics. Palgrave Macmillan.
• Pindych, Robert and Daniel Rubinfeld (2017), Microeconomics. 9^th Global Edition, Pearson.