Course Title: Public Finance Course Number: ECON 332
Prerequisite: ECON 202 Instructor: Prof. Ghosh
Quarter: Office: SS 427
Day/Time: Office Hours: To be announced.
Office Phone: 963-1014

TEXT: Public Finance, 5th Edition, by David Hyman (Dryden Press)


This course develops an understanding of the economic basis for government activity. The course focuses on issues such as efficiency, market failure, externalities and analyses of the role of government in these concepts. Principles of government finance and public policy debates are also discussed. The following goals will be pursued:

Critical Thinking
Develop an understanding of positive and normative issues, and an ability to distinguish between efficiency and equity criterion, as they are applied in the debate surrounding the role of the government in an economy.

Mathematical Analysis
Demonstrate an ability to critically analyze alternate tax structures, effects of externalities and subsidies, using mathematical models, and graphs

Develop an understanding of marginal analysis and the skill to use this framework for analyzing policy issues, and for appreciating the economic theory of public goods and public choice.

Current Debates
Engage in a discussion of the current policy debates being conducted at the federal and state level.


There will be three exams given in this course (two midterms and final). The last and final exam will be comprehensive. The exact date, time and place of the exams will be announced in class at least one week prior to their occurrence.


Make-up exams will be given ONLY under the MOST COMPELLING circumstances and I must be notified WELL BEFORE the scheduled date.


The student with the highest cumulative point total in the class is guaranteed to receive an "A" in the course. The median cumulative point total for a class will be considered to be a "C+." Although a grade of an "F" is unlikely, it is not impossible to attain.


Core Topics




Introduction to Public Finance Ch. 1
Efficiency Markets and Government Ch. 2
Externalities Ch. 3
Public Goods Ch. 4
Public Choice Ch. 5
Government Finance Ch. 10
Taxation, Prices, Efficiency and the Distribution of Income Ch. 11
Selected Topics


Budget Deficits and Government Debt Ch. 12
Taxation: Theory and Structure Ch. 13-17
State and Local Government Finance Ch. 18
Special Topics


Cost Benefit analysis and Government Investments Ch. 6
Government Subsidies and Income Support Ch. 7
Social Security and Social Insurance Ch. 8
Government and Health Care Ch. 9