Public Economics (ECON467) | GSÜ - ECTS Information Guide

Content

Objective

This course aims to explore the fundamental issues of public economics. It analyzes situations where efficiency principles differ from those of the market, particularly due to externalities that operate outside the price mechanism. Beyond these core foundations, the course addresses key questions of resource allocation, inequality management, and political economy.

Course Content

The course covers the efficiency of competitive equilibrium and justifies public intervention in the presence of market failures (information asymmetry, public goods, externalities). It then examines countercyclical macroeconomic policies, government tools for addressing inequality, and the analytical frameworks provided by political economy.

Course Learning Outcomes

By the end of this course, students will be able to explain the foundations of competitive equilibrium and analyze various forms of public intervention. They will be able to identify government policy levers in relation to its diverse objectives: market regulation, growth support, inequality reduction, and the factors shaping government re-election.

Teaching and Learning Methods

Lectures, numerical examples, quiz

References

Hindriks, Jean, and Gareth D. Myles. Intermediate public economics. MIT press, 2013.
Mueller Dennis Public Choice III, Cambridge University Press; 3 edition, 2003
Béjean, S., & Peyron, C. (2003). Microéconomie (1?? éd.). Dalloz.
Descamps, C. (2012). Précis de macroéconomie. Ellipses.
Association française d'économie politique, Guy, Y., Henneguelle, A., & Puissant, E. (dir.). (2023). Grand manuel d'économie politique. Dunod.

Weekly Contents

Theory Topics
Week	Weekly Contents
1	General Equilibrium and Allocative Efficiency: Microeconomic foundations and the First Fundamental Theorem of Welfare Economics
2	Optimum and Equity: Second Welfare Theorem, social surplus, and the trade-off between efficiency and distributive justice
3	Externalities and Public Goods: Allocation failures, tragedy of the commons, and intervention instruments (Pigouvian taxes, quotas)
4	Natural Monopolies and Regulation: Market power, marginal/average cost pricing, and competition policies
5	Information Asymmetries: Adverse selection, moral hazard, public contract design, and insurance regulations
6	Fiscal Policies and Business Cycles: Automatic stabilizers, Keynesian multiplier, and business cycle management
7	Monetary Policies and Sustainability: Fiscal-monetary interaction, rules vs. discretion, and public debt dynamics
8	Structural Policies and Growth: Principles of the IS-LM model in closed and open economies
9	Foundations and Models of the Welfare State: Social protection principles (Beveridge, Bismarck) and risk insurance
10	Transformations and Reforms of the Welfare State: Demographic factors, financial sustainability, and institutional adjustments
11	Measurement and Determinants of Inequality: Indicators (Gini, Palma), top income dynamics, and wealth inequalities
12	Optimal Taxation and Redistribution: Progressive taxation, capital taxation, and work disincentives (Laffer curve)
13	Equality of Opportunity and Social Mobility: Public education spending, means-tested transfers, and pre-distribution
14	Public Choice, Cycles, and Electoral Strategies: Preference aggregation, opportunistic cycles, and re-election behaviors

Assessment System

Contribution to Overall Grade
Activities	Number	Contribution
Contribution of in-term studies to overall grade	1	50
Contribution of final exam to overall grade	1	50
Total	2	100

In-Term Studies
Activities	Number	Contribution
Assignments	0	0
Presentation	0	0
Midterm Examinations (including preparation)	1	50
Project	0	0
Laboratory	0	0
Other Applications	0	0
Quiz	0	0
Term Paper/ Project	0	0
Portfolio Study	0	0
Reports	0	0
Learning Diary	0	0
Thesis/ Project	0	0
Seminar	0	0
Other	0	0
Make-up	0	0
Total	1	50

Relation of Proficiency

No	Program Learning Outcomes	Contribution
No	Program Learning Outcomes	1	2	3	4	5
1	Understanding the major theories, concepts, foundations, and methodologies used in the study of politics.			X
2	Identifying the structure and operation of the political system in Turkey and other political systems in the world.	X
3	Identifying and gathering information from credible primary and secondary sources; analyzing and synthesizing the acquired knowledge.	X
4	Generating and testing empirically hypotheses about political processes, institutions, mechanisms and relationships.
5	Designing, conducting and interpreting the results of original research in accordance with the scientific and ethical principles by using basic research methods.
6	Showing awareness and sensivity towards issues related to democracy, human rights and social peace.		X
7	Appraising the sources of societal conflict and how they can be resolved by political means.			X
8	Examining critically the nature of change in the global political community, and the complex character of processes such as globalization.	X
9	Taking a role in a teamwork in political science and general fields of other related disciplines.
10	Following publications in foreign languages and communicating with the colleagues in the international environment by using French which is the language of education in Galatasaray University and English, the compulsory foreign language.
11	Using required level of information and communication technologies.

ECTS

Activities	Number	Period	Total Workload
Class Hours	14	3	42
Working Hours out of Class	13	3	39
Assignments	0	0	0
Presentation	0	0	0
Midterm Examinations (including preparation)	1	9	9
Project	0	0	0
Laboratory	0	0	0
Other Applications	0	0	0
Final Examinations (including preparation)	2	12	24
Quiz	0	0	0
Term Paper/ Project	0	0	0
Portfolio Study	0	0	0
Reports	0	0	0
Learning Diary	0	0	0
Thesis/ Project	0	0	0
Seminar	0	0	0
Other	0	0	0
Make-up	0	0	0
Yıl Sonu	0	0	0
Hazırlık Yıl Sonu	0	0	0
Hazırlık Bütünleme	0	0	0
Total Workload			114
Total Workload / 25			4.56
Credits ECTS			5