A Course in Public Economics

This 2004 textbook explores how markets operate and governments' roles in addressing market failures.

This 2004 textbook in public economics explores the government's role in the economy. It is intended for third or fourth year undergraduate students and first year graduate students. The core topics covered include markets, externalities, public goods, imperfect competition, asymmetric information and efficiency, and asymmetric information and income redistribution.A Course in Public Economics, first published in 2004, explores the central questions of whether or not markets work, and if not, what is to be done about it. The first part of the textbook, designed for upper-level undergraduates and first-year graduate students, begins with an extended discussion of the two theorems of welfare economics. These theorems show that competitive markets can give rise to socially desirable outcomes, and describe the conditions under which they do so. The second part of the book discusses the kinds of market failure - externalities, public goods, imperfect competition and asymmetric information - that arise when these conditions are not met. The role of the government in resolving market failures is examined. The limits of government action, especially those arising from asymmetric information, are also investigated. A knowledge of intermediate microeconomics and basic calculus is assumed.