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Public Economics

  • Teacher(s):   C.Terrier   M.Fourati  
  • Course given in: English
  • ECTS Credits: 6 credits
  • Schedule: Spring Semester 2020-2021, 4.0h. course (weekly average)
  •  sessions
  • site web du cours course website
  • Related programme: Master of Science (MSc) in Economics
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Lectures – Wednesdays 10am-12am (Location: Zoom)


Camille Terrier (

Maleke Fourati (

Teaching assistant

Ha My Bui (

This course studies the role of the government in the economy. The aim is to provide an understanding of reasons for government intervention in the economy, analyzing the benefits of possible government policies, and the responses of economic agents to the government's actions. The first part of the course covers tax incidence, theories of optimal labor tax, labor supply responses to taxes, and responses of taxable income to taxes. The second part covers market failures and government interventions. After having focused on labor taxation in the first section, we will cover capital taxation and corporate taxation in the second part, as well as topics on externalities, public goods, development, and specific areas of public spending such as health insurance, retirement policies, unemployment insurance, or public spending on education. The last class will focus on experimental measures of preferences for redistribution.

The class will combine lectures from Profs Terrier and Fourati, presentations of recent research work by researchers in public economics, and presentations of research papers by students from the class.


The classes will cover the following topics:

Part 1: Introduction and theory of optimal taxation

Class 1: Introduction to public economics

Class 2: Tax incidence and optimal labor tax

Class 3: Optimal labor tax

Class 4: Guest presentations by:

  • Matthias Krapf on "Behavioral responses to wealth taxes"
  • Malka Guillot on "Tax Incidence Among the Working Superrich"

Part 2: Market failures and government interventions

Class 5: Capital taxation and corporate taxation

Class 6: Externalities and Public Goods

Class 7: Public Economics and Development

Class 8: Special session on Thomas Piketty’s book “Capital in the 21st century”

  • Students will team up to present chapters of the book

Class 9: Cost / benefit analysis and Political Economy

Class 10: Social Insurance and Health Insurance

Class 11: Education Policies and Public Spending on Education

Class 12: Unemployment Insurance

Class 13: Preferences for redistribution

Class 14 (June 2): Special session on a public economics conference

Course organization

Each class will consist in:

1. Pre-recorded videos

  • We will share the videos one week before the class on Moodle.
  • We expect students to watch the videos before coming to class.
  • To incentivize watching the classes, we will organize quizz at the beginning of some sessions and group brainstorms in Zoom breakout rooms.

2. Weekly live sessions on Zoom

  • On Wednesday from 10am to 12am
  • We will share the Zoom link with the students registered to the class.


Jonathan Gruber, Public Finance and Public Policy, 6th edition, Macmillan, 2019 is an optional textbook (the slides follow the Gruber book).

The other readings discussed in the lecture notes can be found in the reference list for each lecture. The pdf of the papers will be posted on moodle.


Students should be comfortable with undergraduate microeconomics and econometrics classes.


First attempt

Written 2h00 hours


The evaluation will consist of a final exam and papers presentation:

  • The final exam (2h) will be open book and conducted via Moodle. The exam will consist of a combination of multiple-choice questions and questions related to the lectures. It will cover the content of all lecture notes but not students' presentations nor guest speakers' presentations. The grade will account for 50% of the final grade.
  • Presentations (30 minutes). Students will present
  • Research papers. (20%) The presentations will last for 20 minutes and will be done live by the students during the class. Evaluations criteria for these presentations will be presented in class.
  • A book chapter from T. Piketty’s book (10%) – Class 8
  • A summary of a conference talk (10%) – Class 14
  • In-class Participation (10%)
  • Class attendance (with video on)
  • Class participation


Written 2h00 hours

The retake exam will consist of 50% of the final grade. Presentation still accounts for the remaning 50%.

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