Intermediate Public Economics, 2e

by Hindriks, Myles

ISBN: 9780262313780 | Copyright 2013

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Table of Contents (pg. vii)
Preface to Second Edition (pg. xxi)
Preface to First Edition (pg. xxiii)
List of Figures (pg. xxv)
Part I. Public Economics and Economic Efficiency (pg. 1)
Chapter 1. An Introduction to Public Economics (pg. 3)
1.1 Public Economics (pg. 3)
1.2 Methods (pg. 3)
1.3 Analyzing Policy (pg. 5)
1.4 Preview (pg. 6)
1.5 Scope (pg. 9)
Further Reading (pg. 9)
Exercises (pg. 10)
Chapter 2. Equilibrium and Efficiency (pg. 13)
2.1 Introduction (pg. 13)
2.2 Economic Models (pg. 13)
2.3 Competitive Economies (pg. 14)
2.4 The Exchange Economy (pg. 15)
2.5 Production and Exchange (pg. 22)
2.6 Efficiency of Competition (pg. 26)
2.7 Lump-Sum Taxation (pg. 39)
2.8 Discussion of Assumptions (pg. 41)
2.9 Summary (pg. 43)
Further Reading (pg. 43)
Exercises (pg. 44)
Chapter 3. Behavioral Economics (pg. 51)
3.1 Introduction (pg. 51)
3.2 Behavioral Individuals (pg. 53)
3.3 Behavioral Markets (pg. 64)
3.4 Behavioral Policy (pg. 67)
3.5 BehavioralWelfare (pg. 71)
3.6 Other-Regarding Preferences (pg. 76)
3.7 Conclusions (pg. 80)
Further Reading (pg. 81)
Exercises (pg. 82)
Part II. Government (pg. 87)
Chapter 4. Public Sector Statistics (pg. 89)
4.1 Introduction (pg. 89)
4.2 Historical Development (pg. 89)
4.3 Composition of Expenditure (pg. 94)
4.4 Revenue (pg. 97)
4.5 Government Debt (pg. 107)
4.6 Measuring the Government (pg. 112)
4.7 Conclusions (pg. 114)
Further Reading (pg. 115)
Exercises (pg. 115)
Chapter 5. Theories of the Public Sector (pg. 119)
5.1 Introduction (pg. 119)
5.2 Justification for the Public Sector (pg. 119)
5.3 Public Sector Growth (pg. 123)
5.4 Excessive Government (pg. 129)
5.5 Conclusions (pg. 138)
Further Reading (pg. 139)
Exercises (pg. 140)
Part III. Departures From Efficiency (pg. 145)
Chapter. 6 Public Goods (pg. 147)
6.1 Introduction (pg. 147)
6.2 Definitions (pg. 148)
6.3 Private Provision (pg. 150)
6.4 Efficient Provision (pg. 154)
6.5 Voting (pg. 156)
6.6 Personalized Prices (pg. 159)
6.7 Mechanism Design (pg. 163)
6.8 More on Private Provision (pg. 170)
6.9 Fund-Raising Campaigns (pg. 178)
6.10 Conclusions (pg. 182)
Further Reading (pg. 183)
Exercises (pg. 184)
Chapter 7. Club Goods and Local Public Goods (pg. 191)
7.1 Introduction (pg. 191)
7.2 Definitions (pg. 192)
7.3 Single-Product Clubs (pg. 193)
7.4 Clubs and the Economy (pg. 199)
7.5 Local Public Goods (pg. 208)
7.6 The Tiebout Hypothesis (pg. 212)
7.7 Empirical Tests (pg. 214)
7.8 Conclusions (pg. 216)
Further Reading (pg. 217)
Exercises (pg. 218)
Chapter 8. Externalities (pg. 223)
8.1 Introduction (pg. 223)
8.2 Externalities Defined (pg. 224)
8.3 Market Inefficiency (pg. 225)
8.4 Externality Examples (pg. 228)
8.5 Pigouvian Taxation (pg. 236)
8.6 Licenses (pg. 239)
8.7 Internalization (pg. 241)
8.8 The Coase Theorem (pg. 242)
8.9 Nonconvexity (pg. 247)
8.10 Conclusions (pg. 248)
Further Reading (pg. 249)
Exercises (pg. 250)
Chapter 9. Imperfect Competition (pg. 255)
9.1 Introduction (pg. 255)
9.2 Concepts of Competition (pg. 256)
9.3 Market Structure (pg. 257)
9.4 Welfare (pg. 260)
9.5 Tax Incidence (pg. 268)
9.6 Specific and Ad valorem Taxation (pg. 274)
9.7 Regulation of Monopoly (pg. 277)
9.8 Regulation of Oligopoly (pg. 282)
9.9 Unions and Taxation (pg. 285)
9.10 Monopsony (pg. 286)
9.11 Conclusions (pg. 288)
Further Reading (pg. 289)
Exercises (pg. 291)
Chapter 10. Asymmetric Information (pg. 297)
10.1 Introduction (pg. 297)
10.2 Hidden Knowledge and Hidden Action (pg. 300)
10.3 Actions or Knowledge? (pg. 301)
10.4 Market Unraveling (pg. 302)
10.5 Screening (pg. 307)
10.6 Signaling (pg. 314)
10.7 Moral Hazard (Hidden Action) (pg. 323)
10.8 Public Provision of Health Care (pg. 330)
10.9 Evidence (pg. 334)
10.10 Conclusions (pg. 336)
Further Reading (pg. 336)
Exercises (pg. 337)
Part IV. Political Economy (pg. 343)
Chapter 11. Voting (pg. 345)
11.1 Introduction (pg. 345)
11.2 Stability (pg. 345)
11.3 Impossibility (pg. 347)
11.4 Majority Rule (pg. 350)
11.5 Alternatives to Majority Rule (pg. 361)
11.6 The Paradox of Voting (pg. 365)
11.7 The “Alabama” Paradox (pg. 371)
11.8 Political Competition (pg. 372)
11.9 Conclusions (pg. 381)
Further Reading (pg. 381)
Exercises (pg. 383)
Chapter 12. Rent-Seeking (pg. 387)
12.1 Introduction (pg. 387)
12.2 Definitions (pg. 388)
12.3 Rent-Seeking Games (pg. 390)
12.4 Social Cost of Monopoly (pg. 398)
12.5 Equilibrium Effects (pg. 401)
12.6 Government Policy (pg. 404)
12.7 Informative Lobbying (pg. 408)
12.8 Controlling Rent-Seeking (pg. 413)
12.9 Conclusions (pg. 414)
Further Reading (pg. 414)
Exercises (pg. 415)
Part V. Equity and Distribution (pg. 421)
Chapter 13. Optimality and Comparability (pg. 423)
13.1 Introduction (pg. 423)
13.2 Social Optimality (pg. 424)
13.3 Lump-Sum Taxes (pg. 427)
13.4 Impossibility of Lump-Sum Taxes (pg. 430)
13.5 Redistribution In-Kind (pg. 434)
13.6 Aspects of Pareto-Efficiency (pg. 436)
13.7 SocialWelfare Functions (pg. 440)
13.8 Arrow’s Theorem (pg. 441)
13.9 Interpersonal Comparability (pg. 443)
13.10 Comparability and SocialWelfare (pg. 446)
13.11 Conclusions (pg. 450)
Further Reading (pg. 451)
Exercises (pg. 453)
Chapter 14. Inequality and Poverty (pg. 457)
14.1 Introduction (pg. 457)
14.2 Measuring Income (pg. 458)
14.3 Equivalence Scales (pg. 460)
14.4 Inequality Measurement (pg. 466)
14.5 Poverty (pg. 481)
14.6 Unequal Opportunities (pg. 489)
14.7 Intergenerational Inequality (pg. 492)
14.8 Conclusions (pg. 496)
Further Reading (pg. 497)
Exercises (pg. 498)
Parti VI. Taxation (pg. 503)
Chapter 15. Commodity Taxation (pg. 505)
15.1 Introduction (pg. 505)
15.2 Deadweight Loss (pg. 506)
15.3 Optimal Taxation (pg. 509)
15.4 Production Efficiency (pg. 513)
15.5 Tax Rules (pg. 515)
15.6 Equity Considerations (pg. 521)
15.7 Applications (pg. 523)
15.8 Efficient Taxation (pg. 528)
15.9 Public Sector Pricing (pg. 530)
15.10 Conclusions (pg. 531)
Further Reading (pg. 531)
Exercises (pg. 532)
Chapter 16. Income Taxation (pg. 537)
16.1 Introduction (pg. 537)
16.2 Equity and Efficiency (pg. 538)
16.3 Taxation and Labor Supply (pg. 539)
16.4 Empirical Evidence (pg. 544)
16.5 Optimal Income Taxation (pg. 547)
16.6 Two Specializations (pg. 555)
16.7 Numerical Results (pg. 561)
16.8 Voting over a Flat Tax (pg. 563)
16.9 Conclusions (pg. 565)
Further Reading (pg. 566)
Exercises (pg. 567)
Chapter 17. Tax Evasion (pg. 573)
17.1 Introduction (pg. 573)
17.2 The Extent of Evasion (pg. 574)
17.3 The Evasion Decision (pg. 576)
17.4 Auditing and Punishment (pg. 583)
17.5 Evidence on Evasion (pg. 586)
17.6 Effect of Honesty (pg. 588)
17.7 Tax Compliance Game (pg. 590)
17.8 Behavioral Models (pg. 593)
17.9 Compliance and Social Interaction (pg. 599)
17.10 Conclusions (pg. 600)
Further Reading (pg. 601)
Exercises (pg. 602)
Chapter 18. The Limits to Redistribution (pg. 607)
18.1 Introduction (pg. 607)
18.2 Revelation Principle (pg. 609)
18.3 The Tax Principle (pg. 614)
18.4 Tax Mix: Separation Principle (pg. 620)
18.5 Capital Income Tax (pg. 624)
18.6 Non–Tax Redistribution (pg. 626)
18.7 Conclusions (pg. 628)
Further Reading (pg. 629)
Exercises (pg. 630)
Part VII. Multiple Jurisdictions (pg. 633)
Chapter 19. Fiscal Federalism (pg. 635)
19.2 Arguments for Multi-level Government (pg. 636)
19.3 Optimal Structure: Efficiency versus Stability (pg. 640)
19.4 Accountability (pg. 643)
19.5 Risk-Sharing (pg. 646)
19.6 Hard and Soft Budgets (pg. 650)
19.7 Evidence on Decentralization (pg. 653)
19.8 Conclusions (pg. 657)
Further Reading (pg. 658)
Exercises (pg. 659)
Chapter 20. Fiscal Competition (pg. 665)
20.1 Introduction (pg. 665)
20.2 Tax Competition (pg. 665)
20.3 Income Distribution (pg. 681)
20.4 Intergovernmental Transfers (pg. 686)
20.5 Evidence (pg. 691)
20.6 Conclusions (pg. 694)
Further Reading (pg. 696)
Exercises (pg. 698)
Chapter 21. Issues in International Taxation (pg. 703)
21.1 Introduction (pg. 703)
21.2 International Efficiency (pg. 704)
21.3 Capital and Corporations (pg. 709)
21.4 Transfer Pricing (pg. 717)
21.5 Location (pg. 720)
21.6 Harmonization of Taxes (pg. 725)
21.7 Tax Principles (pg. 729)
21.8 Tariff Policy (pg. 732)
21.9 Trade Agreements (pg. 736)
21.10 Conclusions (pg. 741)
Further Reading (pg. 741)
Exercises (pg. 742)
Part VIII. Issues of Time (pg. 749)
Chapter 22. Intertemporal Efficiency (pg. 751)
22.1 Introduction (pg. 751)
22.2 Overlapping Generations (pg. 753)
22.3 Equilibrium (pg. 758)
22.4 Optimality and Efficiency (pg. 762)
22.5 Testing Efficiency (pg. 769)
22.6 Conclusions (pg. 770)
Further Reading (pg. 770)
Exercises (pg. 771)
Chapter 23. Social Security (pg. 775)
23.1 Introduction (pg. 775)
23.2 Types of System (pg. 776)
23.3 The Pensions Crisis (pg. 778)
23.4 The Simplest Program (pg. 781)
23.5 Social Security and Production (pg. 783)
23.6 Population Growth (pg. 787)
23.7 Sustaining a Program (pg. 790)
23.8 Ricardian Equivalence (pg. 794)
23.9 Social Security Reform (pg. 797)
23.10 Conclusions (pg. 802)
Further Reading (pg. 803)
Exercises (pg. 804)
Chapter 24. Economic Growth (pg. 809)
24.1 Introduction (pg. 809)
24.2 Exogenous Growth (pg. 810)
24.3 Endogenous Growth (pg. 823)
24.4 Policy Reform (pg. 829)
24.5 Empirical Evidence (pg. 833)
24.6 Conclusions (pg. 837)
Further Reading (pg. 838)
Exercises (pg. 840)
Part IX. Applications (pg. 845)
Chapter 25. Cost–Benefit Analysis (pg. 847)
25.1 Introduction (pg. 847)
25.2 What Is Cost–Benefit Analysis? (pg. 848)
25.3 The Process of CBA (pg. 851)
25.4 Principles of CBA (pg. 856)
25.5 Valuing Life (pg. 865)
25.6 Valuing the Future (pg. 869)
25.7 Theoretical Foundations of CBA (pg. 876)
25.8 Conclusions (pg. 889)
Further Reading (pg. 889)
Exercises (pg. 890)
Chapter 26. Economics of Climate Policy (pg. 895)
26.1 Introduction (pg. 895)
26.2 Special Features (pg. 897)
26.3 The Science of GlobalWarming (pg. 900)
26.4 Integrating Economics and Climate (pg. 910)
26.5 Competing Generations (pg. 917)
26.6 Ecological Discounting (pg. 924)
26.7 Climate Policy in Practice (pg. 929)
26.8 Conclusions (pg. 940)
Further Reading (pg. 941)
Exercises (pg. 942)
Index (pg. 947)

Jean Hindriks

Jean Hindriks is Professor in the Economics Department and Codirector of the Center for Operations Research and Econometrics (CORE) at the Université Catholique de Louvain.


Gareth D. Myles

Gareth D. Myles is Head of Department and Professor of Economics at the University of Exeter and a Research Fellow at the Institute for Fiscal Studies. He is the author of Public Economics.


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