Title of Subject:Economic Policy / NEPTUN code of Subject:GTGVÖ111BNA
Type of Subject:
Lecturer:Zoltán BARTHA, PhD
Suggested Semester: spring / Preliminary learning conditions:Macroeconomics
No.of Lessons: 30/semester / Examination:end-term exam
Credit:3 / Type of Course:
Brief description of the subject:
The purpose of the course is to explain students how their individual welfare or the well-being of their family members may be affected by economic policy decisions, or measures taken by public sector agents in general. During the course we develop tools that help students in evaluating both the micro- and the macroeconomic effects of economic policy instruments.
Summary of lectures:
  1. Why do we need economic policy at all?
  2. Basic rules of the markets vs. markets with government intervention
  3. Social surplus and deadweight loss – simple tools in assessing the macroeconomic effects of government interventions
  4. Public choice and the microeconomics of the public sector
  5. Path dependence – to what extent are market economies similar
  6. Fiscal policy in Europe: public finances and public debt
  7. Fiscal policy in Europe: flat rate tax vs. progressive tax
  8. Monetary policy in Europe: Eurozone in or out
  9. Presentations made by students
  10. Education: externalities and the role of choice
  11. Education: approaches to higher education. Social mobility vs. efficiency
  12. Healthcare: asymmetric information, supply side restrictions and different models
  13. Pensions: What makes a system fair and efficient?.
  14. Government reform: e-government solutions in Europe
  15. Midterm exam (optional)

Method of Mid-Semester Task:Students have to actively participate in class discussion, and are required to make a ppt presentation on a topic agreed during the first class.
Evaluation of the Subject:
The final grade is made up of two components:
  • A maximum of 15 points are awarded for taking part in classroom discussions and making a ppt presentation.
  • A further 15 points can be accumulated by writing the test at the end of the semester.
The accumulated points translate to grades in the following way:
Points / Grade
0-14 / F
15-18 / D
19-22 / C
23-26 / B
27-30 / A
Required reading:
1.Sara Connolly & Alistair Munro: Economics of the public sector. London: Prentice Hall, 1999. Pp. 1-56, 121-202, 339-409..
2.Zoltán Bartha: Network Economics (online material)
3.Buchanan: What should economists do? Indianapolis: Liberty Press, 1979.
Suggested reading:
1.Recent issues of The Economist:
2.Thaler-Sunstein: Nudge. London: Penguin Books, 2008
3. Galbraith: The Culture of Contentment. New York: Houghton Mifflin, 1992.