POLICY 702 Course Outline 2015
DEPARTMENT OF ECONOMICS
Course Outline 2015
POLICY 702: ECONOMICS OF POLICY (15 POINTS)
Semester 1 (1153)
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Course Prescription
Applies economic reasoning to current problems in policy and government. Covers
behavioural models in economics; the structure of the macroeconomic system; taxation;
market failure; and economics of social issues.
Programme and Course Advice
Prerequisite: STATS 101
This course is part of the Masters of Public Policy programme (MPP) run by the
Department of Political Studies and is designed for students who may have little
economics background.
Goals of the Course
The course teaches the basic economic concepts and shows how economic reasoning
applies to current policy problems in a mixed market economy. It covers the role of
government in the economy; taxation; market failure; cost benefit analysis, distribution
and contemporary economic and social issues.
The necessary theoretical and empirical tools will be introduced in and motivated by
selected case studies of specific policy issues and problems.
Learning Outcomes
By the end of the course it is expected that the student will be able to:
1.
use concepts and techniques of economics to analyse and solve policy problems.
2.
appreciate the strengths and weaknesses of the economic framework as it applies to
collective decision making.
3.
distinguish between normative and positive economics;
4.
identify the sources of market failure and the potential ways in which Governments
respond to these.
5.
Understand the basic workings of the New Zealand economy and current
economic and social policy debates.
Content Outline
Week
Topic
Part I: Micro to macro
1
Microeconomics: an
introduction
The market model
2
Market Failures and
Microeconomic Policy
3
Micro to macro
Circular flow
Concepts
Readings
Division of labour
Gains from exchange
Market mechanisms
supply and demand
St John and Fargher
chpt 1
Monopoly
Missing markets
Externalities
TBA
St John and Fargher
chpt 1
Treasury 2014 The
New Zealand Economic
and Financial Overview
4
5
Measurement of output,
growth and inflation
The macro economy
Global economic issues
Role of money
6
Student test
Part II: Macro and Social Policy
7
Macro policy- why don’t
they agree
8
Case: the Budget
Macro concepts
Stocks and flows
Saving investment
Money
Policy framework
Keynsian economics
Classical economics
Monetary economics
Deficits, Debt, state
assets, Budgets
St John and Fargher
chpt 2
St John and Fargher
chpt 3
TBA
Budget 2014
The New Zealand
Economic and
Financial Overview
9
Case: Tax/Welfare
reform
Efficiency, equity,
administrative simplicity
Tax reform
10
Case: child poverty and
making work pay
Distribution and
measurement of poverty
Using the policy
framework
11
Case: Social insurance
and demographic change
Market failure:
uncertainty
12
Student presentations
McLeod Review 2001:
selected chapters
Tax Working Group
Report 2010
The Children’s Monitor
2013
St John, 2011 Working
for Families.
Treasury working
paper 2014
Solow, Trapped in the
new ‘you're on your
own’ world
Learning and Teaching
The expected workload of students, including class attendance, class preparation,
preparation of assignments and case studies, and private study time, will average 10
hours per week, of which at least 2 hours will be class time for lectures and student
presentations.
This course will be taught in the first semester. There will be a total of two hours of
lectures per week: Tuesdays 11:00am-1:00pm.
Teaching Staff
Associate Professor Susan St John, Room 6109, 6th floor, G. Owen Glenn bldg.,
Phone: 923 7432, email: s.stjohn@auckland.ac.nz
Learning Resources
http://www.library.auckland.ac.nz/subjects/bus/infosources/public_policy.htm#govt
Readings to be supplied on Cecil
Assessment
Assessment will be through one test and one case study (each worth 30% of the final
grade), and two assignments (each worth 20% of the final grade).
The Case Studies will be delivered through class presentations (20-30 minutes) followed
by submission of a written essay (2000-3000 words).
Learning
Outcomes
1
2
3
4
Test 1
X
X
Case Study
2
X
X
X
X
_____________________
Assignments
1 and 2
X
X
X
X