Public Policy 621/Module

Economics for Policy AnalysisWheatley 5/030

Fall 2006287-6958 or 6950

Mary Stevensonoffice hours: MW 5.15-6.00

or by appointment

Required Text

Pindyck & Rubinfeld, Microeconomics, 6th edition, Prentice-Hall, 2005

Course Description

This first module of Public Policy 621/622 (9 weeks, or roughly 1/3 of the academic year) focuses on how consumers and producers interact in a competitive setting, and how each group would use economic principles in makings its decisions. Thus, this first module is an examination of the market mechanism when it is working optimally; it is a precursor to the 2nd module of the course, which examines market failure.

Course Grade

During the 9-week span of the first module, there will be four take-home assignments, coming at approximately two-week intervals. Each assignment counts for 25% of your first-module grade. Your first module grade counts for 2/3 of your final grade in Public Policy 621.

Course Outline

  1. Introduction; Basic Concepts

Chapters 1 & 2 (omit section 2.6)

  1. Consumer Behavior

Chapters 3 & 4 (omit sections 3.6 & 4.6)

  1. Theory of the Firm; Competitive Markets

Chapters 6, 7, 8, 9 (omit sections 7.6 & 7.7)

  1. Market Power

Chapters 10 & 11 (omit section 11.6)

Public Policy 621/

Economics for Policy AnalysisWheatley 5/30

Fall 2006/Spring 2007287-6958

Mary Stevensonoffice hours: MW 5.15-6.00, or by appointment

Module II

Course Description

This portion of Public Policy 621/622 is a continuation of the previous portion focusing on market structures, and also includes a portion examining microeconomics and public policy. It spans the last third of the fall semester and the first third of the spring semester. We will continue to use Pindyck & Rubinfeld, Microeconomics, 6th edition, as our text. The other assigned readings are on reserve in the library, or may be borrowed from me.

Course Grade

There will be two take-home assignments each semester, coming at approximately two-week intervals. The first two take-home assignments will, together, count for 1/3 of your final grade in Public Policy 621; the last two will count for 1/3 of your final grade in Public Policy 622. This may sound cumbersome, but it is a necessary consequence of the fact that this portion of the course straddles both semesters.

Course Outline

  1. Theories of Perfect and Imperfect Competition, Continued

PindyckRubinfeld, Ch. 12 (omit pp. 443-452; start again with section 12.4)

  1. General Equilibrium and Welfare Economics

PindyckRubinfeld, Ch. 16

Rosen, Public Finance,Ch. 4

  1. Market Failure and the Rationale for Government Intervention

Pindyck & Rubinfeld, Chs. 17 & 18

Levitt & Dubner, Freakonomics, pp. 7-9

Gladwell, “The Moral Hazard Myth,” New Yorker, August 29, 2005, pp.44-49

Warsh, “A recipe for understanding,” Boston Sunday Globe, February 15, 1998

Coase, “The Problem of Social Cost,” J. Law & Economics, 3, October 1960

Blau, “Discrimination Against Women: Theory and Evidence,” in W. Darity, ed., Labor Economics: Modern Views

Darity, “The Human Capital Approach to Black-White Earnings Inequality: Some Unsettled Questions,” J. Human Resources, Vol. 17 #1, 1982

Gladwell, Ch. 3 & Conclusion, Blink: The Power of Thinking Without Thinking

Levitt & Dubner, Freakonomics, pp. 77-79

  1. Economics of the Public Sector

Steiner, “The Public Sector and the Public Interest,” in Haveman & Margolis, Public Expenditure and Policy Analysis

Landsburg, “Win, Place, and No! The only true fair election is the one with one voter,” Slate, February 5, 1999

ApgarBrown, Ch. 15

L. Friedman, Microeconomic Policy Analysis, Ch 15

  1. Funding the Public Sector: Taxation and its Incidence

Rosen, Public Finance, Ch. 13 (pp.274-293), Ch. 14 (pp. 305-314), Ch. 15 (pp.330-336)

  1. Principles of Regulatory Economics

Caves, American Industry: Structure, Conduct, Performance, Chs. 6 & 7