Politica economica e Scienza delle finanze - eng

ECONOMIC POLICY AND PUBLIC FINANCE (CLEA)
Prof. Giorgia Casalone, Prof. Paolo Ghinetti, Prof. Martin Zagler

Course Code: E0366
Subject code: SECS-P/02 and SECS/P03
12 ECTS – 96 hours
Location: Novara



•    Teaching language.
Italian. Possibility to take the exam in English.

•    Short contents
This course aims at analyzing the economic systems, the role played by the State and the associated problems. It consists of two modules.

The module of Public Finance aims at illustrating the role of the State both in principle and in practice. The focus is on the various tax and spending programs used to achieve the State economic goals. The course includes also some study of State and Local governments and fiscal federalism.

In the module on Economic Policy the main models for the analysis of the functioning of the economy are presented. We analysed economic policy for economic growth, the importance of expectations to explain the economic crisis, monetary policy and inflation, fiscal policy and public debt, the significance of the exchange rate in an open economy.

•    Course material
Module 1
o    R. Artoni, Elementi di Scienza delle Finanze, Ed. Il Mulino, last ed., chapters 1, 2, 3, 4, 5, 8, 9, 11.6, 12.
o    Further information can be found on the web page of the course at the URL https://eco.dir.unipmn.it/

Module 2
o    O. Blanchard, A. Amighini, F. Giavazzi, Scoprire la Macroeconomia: I. Quello che non si può non sapere, il Mulino, Bologna, 2011, cap. 6, 11 – 13.
o    O. Blanchard, A. Amighini, F. Giavazzi, Scoprire la Macroeconomia: II. Un passo in più, il Mulino, Bologna, 2011, capp. 1 – 13.
o    L’Unione economica e monetaria e l’euro, 2013, available at: http://europa.eu/pol/emu/index_it.htm
o    Further information can be found at http://sites.google.com/site/upodisei/

For non Italian speaking students texts in English will be suggested upon request.


•    Educational objectives
The aim of the course is to provide students with the necessary tools for the analysis of how government intervention inflicts the economy.
With passing the exam, the student will be able to:
- Evaluate the efficiency and fairness of the tax system and public spending;
- Understanding the effects of economic policy on market outcomes.
•    Prerequisites
Economics. For students who choose Economic Policy as an elective, Mathematical Methods 1.

•    Teaching methods
This is an integrated course over two terms separated in two modules. The course consists of lectures, exercise classes and possibly testimonials and seminars


•    Examination

The exam is written and consists of two parts, one for each module, 45 min. each. The exam is passed with a grade of not less than 18 and if in both parts have a grade of not less than 15. The final grade is the average of the marks obtained in the two parts, rounded up.
To take the exam you must register by the third to last working day prior to the date of the test. Each student can take the exam for a maximum of three times in the course of a calendar year.

•    Detailed contents of the course
The first Module (Public Finance) will be taught in the first semester (October-December 2015), the second Module (Economic Policy) in the second semester (February-May 2016), according to the academic time-table.

Module 1- Public Finance (Dr. Giorgia Casalone, Prof. Paolo Ghinetti) - 6 ECTS

1.    INTRODUCTION
o    The Public Sector: role and definitions
o    Public expenditures and public revenues
o    Taxation: definitions and classifications
o    Tax progressivity

2.    PERSONAL INCOME TAXES
o    Generalities
o    Outline of the Italian income tax (IRPEF)
o    Principles behind the Italian income tax
o    The design of the income tax (types of incomes, individual or household income)

3.    CORPORATE TAXES
o    Generalities
o    Outline of the Italian corporate tax (IRES)
o    The link between personal income and corporate taxes
o    The incidence of the corporation income tax and its effect on efficiency

4.    CAPITAL INCOME TAXES
o    Generalities
o    The special treatment of capital income
o    International capital taxation

5.    TAXES ON CONSUMPTION
o    Generalities
o    General taxes on transactions and value-added taxes
o    Types of taxable transactions
o    Taxes on international transactions

6.    THE HEALTHCARE SYSTEM
o    Rationale for a role of government in the health care sector
o    Private health insurances and failures
o    Public health insurance
o    A comparison among healthcare systems (US, UK and Italy)

7.    THE PENSION SYSTEM
o    Rationale for a role of government in the pension system
o    Pay-as-you-go versus funded pension schemes
o    Effects on savings
o    Pension systems risks
o    The Italian pension system and the recent reforms

8.    LOCAL TAXES AND EXPENDITURES
o    Rationale for decentralization
o    Financing local authorities
o    Transfers to local authorities in Italy
o    Redistribution and fiscal federalism

9.    THE BUDGETARY PROCESS AND THE EVOLUTION OF THE PUBLIC FINANCE
o    The budget law
o    The budgetary process in Italy
o    The Internal Stability Pact


Module 2- Economic Policy (Prof. Paolo Ghinetti, Prof. Martin Zagler) - 6 ECTS

10.    ECONOMIC GROWTH POLICY
o    Stylized Facts
o    The Solow growth model
o    Technical Progress
o    The relationship between short, medium and long run

11.    EXPECTATIONS
o    Prices
o    Basic notions
o    Fisher equation
o    Financial markets and expectations
o    Expectations, consumption and investment
o    Uncertainty

12.    INFLATION AND MONETARY POLICY
o    Cost of inflation
o    Hyperinflation
o    Monetary Policy
o    Transmission mechanisms
o    Monetary Policy: rules and constraints

13.    DEBT AND FISCAL POLICY
o    Public deficit and debt
o    The determinants of public debt
o    Public debt sustainability   

14.    THE OPEN ECONOMY
o    The IS-LM model in the open economy
o    Economic policy in the open economy
o    Exchange rate regimes

15.    EUROPEAN ECONOMIC POLICY
o    European institutions
o    The economic and monetary union
o    The euro