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KAFP 3350 - Public Economics - Level 2

Type d'enseignement : Lecture and tutorials

Semester : Autumn 2017-2018

Number of hours : 36

Language of tuition : English, French

Pre-requisite

Students will find it easier if they have taken a basic course in microeconomics

Course Description

Why does the state need to intervene in markets? The course starts by reviewing the view of the world under perfect competition, where the invisible hand is at work. In this world, there is no room for intervention. We will then explore various causes of departures from this view, what are called market failures. The first category of failures finds its root in concentrated markets, where firms have excessive power. To study such environments we will introduce the tools of game theory. The second category is linked to informational problems. We will examine problems of adverse selection and moral hazard, that were of high relevance for instance in the recent financial crisis. The third category is linked to the absence of markets (such as the absence, until recently of markets for pollution). This gives rise to what is known as externalities. We will study solutions in these kind of instances. We will study public policies aimed at finding solutions to these essential problems: antitrust policy, tax policy, labor laws. The course will be strongly grounded in practical examples, including case studies and newspaper articles.

Teachers

HENRY, Emeric (Associate Professor, Department of Economics, Sciences Po)

Course validation

The course will be evaluated on the basis of a final exam (50%) and a group project (50%). The group projects (done in groups of 3-4 of members of your TD) will study a market failure in practice and what solutions could be proposed to solve it. Several sessions of the TD will be reserved to help you determine your specific topic.

Required reading

“Interemediate Public Economics” (J. Hindricks and G. Myles)

Senior lecturers

  • BATUT, Cyprien (Etudiant doctorant)
  • BELLUE, Suzanne (Assistante de recherche)
  • LOUIS-SIDOIS, Charles (ATER)