AØKA08035U Public Finance

Volume 2013/2014
BSc in Economics
MSc in Economics
The course focuses on the relationship between the government and the market and tries to answer such issues as when should the government intervene, and what problems can arise due to government interventions when governments operate under imperfect information and other imperfections.

The course will cover a range of the many critical decisions facing policy makers regarding both the expenditure side and the financing of the public sector. Examples of questions addressed in the course are:

  • How large should governments be?
  • What are the main arguments for government intervention?
  • How do individuals and firms respond to government policies and why is it important?
  • How can empirical methods be used to identify behavioral responses to government policy?
  • Should governments provide private goods?
  • How large are tax distortions and how are they minimized?
  • How big is the trade-off between equality and efficiency?
  • How high is the tax rate on the rich and how high should it be?
  • How big a problem is tax evasion and what is the optimal strategy to fight it?
  • Who bears the cost of a tax (often nothing is as it seems)?
  • How do globalization affect the optimal tax policy?
  • What is the scope for fiscal stimulus policy during economic crisis?
  • What are the right and wrong policies to deal with the climate challenge?
Learning Outcome
The course introuces students to main topics and theoretical and empirical methods in modern public finance. At the end of the course, students are expected to:

  • know the main motives for and against public sector involvement in the economy
  • know about key concepts as well as theoretical and empirical results in modern public finance
  • be able to demonstrate a thorough understanding of the underlying mechanisms behimd the theoretical results
  • be able to apply the empirical methods introduced in the course
The grade 12 is awarded to students who show full capability of meeting these stipulated expectations.
Hindriks, Jean and Gareth Myles (2013): “Intermediate Public Economics”, 2nd edition, MIT Press (OBS: New edition).
Knowledge of first and second year micro- and macro-economics.
3 hours of lectures per week for 14 weeks
  • Category
  • Hours
  • Exam
  • 3
  • Lectures
  • 42
  • Preparation
  • 161
  • Total
  • 206
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
A 3 hours written examination taking place at Peter Bangs Vej 36.
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censurship
Exam period
Will be updated before the start of the semester
Same as ordinary. But if only a few students have registered for the re-exam, the exam might change to an oral exams with a synopsis to be handed in. This means that the examination date also will change.
Criteria for exam assesment
The Student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.