9780716766315

In the past twenty years, the field of public finance has undergone a dramatic evolution, with a growing interest in the study of transfer programs and social insurance. The field has also moved from predominantly theoretic approaches to putting more emphasis on high-quality empirical work, both in the traditional areas of tax and direct spending and in the newer areas of transfer programs and social insurance. Jonathan Gruber's "Public Finance and Public Policy" is the first text to acknowledge those changes. Written specifically with those developments in mind, it brings the realities of contemporary public finance to the classroom in ways no other text can match.

Part I. Background
  1. Why Study Public Finance?
    The Four Questions of Public Finance
    Why Study Public Finance? Facts on Government in the U.S. and Around the World
    Why Study Public Finance Now? Policy Debates over Social Security, Health Care, and Education

  2. Theoretical Tools of Public Finance
    Constrained Utility Maximization
    Putting the Tools to Work: TANF and Labor Supply Among Single Mothers
    Equilibrium and Social Welfare
    Welfare Implications of Benefit Reductions: The TANF Example Continued
    Appendix: The Mathematics of Utility Maximization

  3. Empirical Tools of Public Finance
    The Important Distinction between Correlation and Causality
    Measuring Causality with Data We'd Like To Have: Randomized Trials
    Estimating Causation with Data We Actually Get: Behavioral Observations
    Appendix: Cross-sectional Regression Analysis Example

  4. Tools of Budget Analysis
    Federal Budgeting
    Do Debts and Deficits Mean Anything? A Long Run Perspective
    Why Do We Care About the Government's Fiscal Position?


Part II. Externalitites and Public Goods
  5. Externalities: Problems and Solutions
    Externality Theory
    Private Sector Solutions to Externalities
    Public Sector Solutions to Externalities
    Distinctions between Price and Quantity Approaches to Regulation

  6. Externalities in Action: Environmental and Health Externalities
    Acid Rain
    Global Warming
    The Economics of Smoking
    The Externalities of Other Addictive Behaviors

  7. Public Goods: Problems and Solutions
    Optimal Provision of Public Goods
    Private Provision of Public Goods
    Public Provision with Private Provision
    Appendix: Mathematics of Public Goods

  8. Cost/Benefit Analysis
    Measuring the Benefits of Public Goods
    Measuring the Costs of Public Goods
    Putting it all Together: Cost/Benefit Comparisons

  9. Implementing Public Goods: Political Economy and Public Choice
    Optimal Financing of Public Goods and its Problems
    Mechanisms for Aggregating Individual Preferences
    Representative Democracy and the Median Voter Theory
    Public Choice Theory: The Foundations of Government Failure

  10. State and Local Government Expenditures
    Fiscal Federalism in the U.S. and Abroad
    Optimal Fiscal Federalism
    Should We Redistribute Across Communities? Intergovernmental Grants

  11. Public Goods in Action: Education
    Why Should the Government be Involved in Education?
    How Should the Government be Involved in Education? Crowding Out and Vouchers
    Measuring the Returns to Education
    The Role of the Government in Higher Education


PART III. SOCIAL INSURANCE AND REDISTRIBUTION
  12. Social Insurance
    What is Insurance and Why do Individuals Value it?
    Why Have Social Insurance?
    Social Insurance vs. Self-Insurance: How Much Consumption Smoothing?
    The Problem with Insurance: Moral Hazard
    Putting it All Together: Optimal Social Insurance
    Appendix: Expected Utility Model and Adverse Selection

  13. Social Security
    What is Social Security and How Does It Work?
    Consumption Smoothing Benefits of Social Security
    Social Security and Retirement
    Social Security Reform

  14. Unemployment Insurance, Workers' Compensation and Disability Insurance
    Institutional Features of UI, WC and DI
    Consumption Smoothing Benefits of Social Insurance Programs
    Moral Hazard Effects of Social Insurance Programs
    The Costs and Benefits of Social Insurance to Firms
    Implications for Program Reform
    Appendix: Quasi-experimental Estimates of the Effects of UI

  15. Health Insurance I: Health Economics and Private Health Insurance
    An Overview of Health Care in the U.S.
    The Efficiency Costs of Health Insurance: Patient-side Moral Hazard
    The Efficiency Costs of Health Insurance: Provider-side Moral Hazard

  16. Health Insurance II: Medicare and Medicaid
    The Medicaid Program for Low Income Mothers and Children
    What are the Effects of the Medicaid Program
    The Medicare Program
    What are the Effects of the Medicare Program?
    Long Term Care
    Lessons for Health Care Reform in the U.S.

  17. Income Distribution and Welfare
    Why Redistribute?
    Welfare Policy in the U.S.
    The Costs of Welfare Policy
    Reforming Welfare


PART IV. TAXATION IN THEORY AND PRACTICE
  18. Taxation in the U.S. and Around the World
    Types of Taxation in the U.S. and Other Nations
    Basic Structure of the Income Tax in the U.S.
    Measuring the Distributional Properties of Tax Systems
    Defining the Income Tax Base
    Externality/Public Goods Rationales for Deviating from Haig-Simons
    The Appropriate Unit of Taxation

  19. The Equity Implications of Taxation--Tax Incidence
    The Three Rules of Tax Incidence
    Tax Incidence Extensions
    General Equilibrium Tax Incidence
    The Incidence of Taxation in the U.S.
    Appendix: The Mathematics of Tax Incidence

  20. Tax Inefficiencies and Their Implications for Optimal Taxation
    Taxation and Economic Efficiency
    Optimal Commodity Taxation
    Optimal Income Taxation
    Tax/Benefit Linkages and the Financing of Social Insurance Programs
    Appendix: The Mathematics of Optimal Taxation

  21. Taxes on Labor Supply
    Taxation and Labor Supply: Theory
    Taxation and Labor Supply: Evidence
    Tax Incentives and Labor Supply Decisions: The Earned Income Tax Credit
    The Tax Treatment of Child Care Expenditures

  22. Taxation of Savings
    Taxation of Savings: Theory
    Taxation of Savings: Evidence
    Tax Incentive for Savings

  23. Taxes on Risk Taking and Wealth
    Taxation and Risk-Taking: Theory and Evidence
    Tax Evasion
    Capital Gains Taxation
    Estate Taxation
    Property Taxation

  24. Issues of Corporate Taxation
    What are Corporations and Why Do We Tax Them?
    The Structure of the Corporate Tax
    The Efficiency Consequences of the Corporate Tax--Investment
    Treatment of International Corporate Income
    The Efficiency Consequences of the Corporate Tax--Financing

  25. Tax Reform
    Tax Rates and Tax Revenues
    Tax Simplicity
    Tax Reform Dynamics: The Politics of Tax Reform
    Consumption Taxation and Other Fundamental Tax Reforms

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Public Finance and Public Policy

Public Finance and Public Policy

0716766310

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