Face-to-face , first term, 30 hours of theory.

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The lectures and exam are given in English. Most of the readings will be in English, although there may be an occasional article in French.

This course analyses how the government chooses its tax and spending policies and how those choices affect the behavior of individuals and companies in the economy. The main objective is for the student to understand what makes for "good" government policy. By understanding the features of a good tax and spending policy, the student should acquire the ability to distinguish between a government policy that has beneficial effects and one that has detrimental effects. The student should be able to evaluate whether a government policy meets the efficiency and equity objectives of public finance.

The course examines the general role of the public sector, that is, the government, in the economy. The course covers the cases for governmental intervention and the role the government plays in areas such as education, social welfare, public transportation, arts and sciences, national defense, and health care. The course also covers issues concerning how the government funds its programmes. These topics include income taxation, environmental taxation, efficient and equitable taxation, and tax incidence.

By the end of the course, students should be able to evaluate the economic arguments in favor or against certain policies, such as an income tax cut, for example, or for increasing spending on public transportation.

A secondary objective of the course is to develop students' ability to deal with quantitative material such as tables and graphs. They should be able to analyse such material and draw sensible conclusions from it.

Political Economy A and B. Students from all backgrounds are welcome.

The course is divided into two parts.

The first half of the course covers the basic issues of public finance, including the role of government and the analysis of public expenditures. The second half of the course focuses on tax policy issues.

As part of the course, students will be asked to apply their understanding of tax and spending policies to solve an economic problem. For this project, students will write a brief paper addressed to a senior government official describing an economic problem, possible solutions to that problem, and the advantages and disadvantages of the recommended solution. In preparing the memo, students will use the analytical tools developed during the course. In previous years, students have written their memos on topics such as using tax policies to reduce pollution, problems relating to immigration, the impact of rising prices of gasoline, the ban on smoking in restaurants, subsidies for the arts, and ways to reduce unemployment.

The course will focus on developing the tools to analyse current policy problems. These tools will be acquired through lectures, problem sets, and the policy memo.

The formal course requirements include preparing a policy memo and taking a written final examination.

The final exam will cover the material presented in lectures, in the readings, and in the text book. Students will be assessed on their ability to explain clearly their understanding of the economic questions presented.

The textbook for this course is Jonathan Gruber, Public Finance and Public Policy (2nd ed., New York: Worth, 2007).

Students are encouraged to follow economic policy events in the daily press. Through the process, they will gain a better understanding of how the theoretical material presented in this course applies to real world policies. The daily news will also be the best way to learn about policy issues under discussion in Belgium, in the European Union, and in the United States.

Since the textbook generally focuses on public finance issues from the U.S. perspective, it will be supplemented by readings and examples addressing issues of concern in Belgium and Europe. These articles and discussions form an important part of the course. Since the majority of this material is not available in the textbook, it is important that students attend the lectures to understand the material that will be covered on the exam.

A detailed course outline will be distributed in class. Students may work in groups on the problem sets and on the memo.