Saint Martin’s University
Spring 2006
Public Finance (ECN410)
Syllabus
Professor:Heather Grob, PhD
Office hours:MTW 2:00-4:00, or by appointment, OM371
Phone:(360) 438-4292
Email:
Website:
Class times: T,Th 9:30-10:50am, Old Main 354
COURSE DESCRIPTION AND RESOURCES
Course Description: This course will cover theories, policies and practices relating to government revenues, expenditures and debts. We will examine issues concerning the allocation of public goods and services, taxation, budgeting and public administration. This course is taught with the expectation that students have completed Principles of Finance, Money and Banking, Investment Analysis and/or Principles of Economics.
Course Objectives: This course will enable you to:
1.Learn methods of public policy evaluation such as cost-benefit analysis.
2.Understand the purpose and performance of social programs.
3. Understand political and economic issues surrounding the U.S. and WashingtonState tax system.
4. Gain an overview of budgetary issues facing the U.S. and the State of Washington
5. Apply knowledge through assignments, in-class discussion and research projects.
Text and Required Reading: The principle text for this class isPublic Finance (7th edition) by Harvey S. Rosen. Students are also responsible for additional readings that are announced in class. Each student should be prepared to contribute to every class session and expect peers to do the same. In order to contribute to class discussions, I recommended students find examples of public finance issues in The Wall Street Journal, New York Times, or The Economist.
Materials on Reserve: The following texts will be on 2-hour reserve at the O’Grady Library. Many readings are also available on-line.
Auerbach, et al. 1997. Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy in Baker and Elliot, eds. Readings in Public Finance: 473-489.
Baker, Samuel and Catherine Elliott (eds) 1997. Readings in Public Finance.South-WesternCollege Publishing.
Blank, Rebecca. 2000. Fighting Poverty: Lessons from Recent US History. Journal of Economic Perspectives Vol.14 pp.3-19.
Currie, Janet 2001. Early Childhood Education Programs.Journal of Economic Perspectives, Vol 15, Num 2, pp213-238.
Gravelle, Jane. 2003. “The Enron Debacle: Lessons for Tax Policy.” Discussion Paper No. 6. The Urban Institute: Washington, DC.
Grob, Heather. 2002. “Defining Responsibility: Exploring Government’s Role in Regulating Multiemployer Arrangements.” In Voos, Paula, ed. Proceedings of the 54th Annual Meeting Jan 4-5, 2002. Atlanta. IRRA Series: Champaign, IL.
Ladd “School Vouchers, A Critical View.” Journal of Economic Perspectives 16 (Fall 2002), pp. 3-24.
McKinnon, John D. and Greg Hitt “How Treasury Lost In Battle to Quash a Dubious Security Instrument Issued by Enron and Others.” Wall Street Journal. Feb 2, 2002.
Orr, Doug. 2004. “Social Security Isn’t Broken: So Why the Rush to Fix it?” in Real World Macro, 22nd Ed. (pages 30-33) Boston, MA: Dollars and Sense Cooperative.
Postrel, Virginia. 2000. The U.S. Tax System is Discouraging Married Women from Working. The New York Times (11/2/2000): C2.
Spriggs, William E. 2004. “African Americans and Social Security.” in Real World Macro, 22nd Ed. (pages 63-66) Boston, MA: Dollars and Sense Cooperative.
Tilly, Chris. 2004. “Geese, Golden Egges, and Traps: Why Inequality is Bad for the Economy” in Real World Macro, 22nd Ed. (pages 30-33) Boston, MA: Dollars and Sense Cooperative.
Kotlikoff, Laurence and Scott Burns, 2004.The Coming Generational Storm: What you need to know about America’s Economic Future.Cambridge, MA: MIT Press.
Wallis, John J. 2000. “American Government Finance in the Long Run: 1790 to 1990.” Journal of Economic Perspectives (Winter) 14: 61-82.
Wu, Yonghong. 2005. “The Effects of State R&D Tax Credits in Simulating Private R&D Expenditure: A Cross-state Empirical Analysis.” Journal of Policy Analysis and Management, Vol 24, No 4, 785-802.
EXPECTATIONS AND EVALUATION
Evaluation: Evaluation will be based on weekly homework assignments (25%), two 5-7 page papers (25%), a comprehensive final examination (20%), individual contribution to and presentation of a team project (20%)and class participation (10%).
Assignment and Exam Schedule: Assignments are due at the beginning of the class as scheduled on the “Readings and Assignments”list below. Late assignments will be penalized 10%. Assignments handed in more than one week after the due date will not be accepted. Assignments that have been accepted may be revised and resubmitted for half credit. All final papers and assignments must be turned in by May 4: no exceptions. The comprehensive final exam will be given during finals week. This examination is currently scheduled for Wednesday, May 9 from 8-10 a.m.
Papers: You will be required to write two 5-7 page papers worth 25% of your grade (12.5% each). You may select from a set of questions I will provide, or you may propose a topic to be approved by me. I am available to help you brainstorm topics and to comment on drafts.
Papers will be due before the spring break and before the final exam on the dates indicated in the Schedule below. Both papers are due at the start of class on their respective due dates; late papers will be lowered by one letter grade per business day late. Your papers may be revised and resubmitted before May 4.
When I grade papers, I am looking foremost for content and demonstrated understanding of Public Finance issues. The structure and writing clarity is important as well as proper grammar and format. Your final paper should be a complete and logical statement. You need to include a clear thesis statement and purpose for writing the paper (besides the fact that I have assigned it!) with substantial evidence. The arguments you present must be well reasoned and well supported by economic theory and research.
All papers should be typed in a standard 12-point font, double-spaced, numbered and stapled, with one-inch margins on all sides. In the top left-hand corner, type your name, the course name and section, and the assignment due date. Please cite all sources correctly (MLA format is recommended) and attach a Works Cited page.
I expect you to do original work. Proper citation should be given to authors whose work you use in your paper. Failure to provide proper citation, whether intended or not, is plagiarism. It is a serious offense and could result in referral to the Vice President of Academic Affairs. This could result in a failed grade for the assignment or for the entire course, or suspension.
Participation is Required! Participation means that you have done the reading, you comprehend the material, and you are ready to discuss it with me and your fellow classmates. You should view each class time as part lecture, part seminar. Come to class prepared with some questions and observations of your own and be prepared to discuss the material with enthusiasm. Study groups may help you to stage a debate or find additional case studies or material that will energize our classroom experience. I will ask students to take special leadership responsibility for seminar time, and I expect you to sign up for at least one session. Ultimately, this class will be what you make of it through seminar discussions. Take charge of your education!
Team project: You will have the opportunity to work on an economic problem with fellow students, and perhaps also interested members of the Olympia community and government employees from the State of Washington. In any community related work, remember that we are counting on you to be good representatives of St. Martin’s University. I will help you to brainstorm team projects and plans, to arrange community meetings and phone calls from my office, and to obtain additional material to further define your projects.
Just as in the workforce, your teamwork will be judged on your ability to work with others to research and solve a problem. Each of you will rate your team’s and teammates’ performance. You will present your final project to the class, and each team member should present at least 3 minutes. Your final grade will be based on the performance of the team as a whole, your ranking in the team rating, your presentation, and your final write-up of the team assignment. Your final write-up will describe the problem, your analysis and your findings. Practice your presentations and feel free to invite me to any meetings in preparation for the final presentation. Further instruction and guidance will be available throughout the semester.
Extra credit: At times in the semester I will announce possibilities for extra credit that may require you attend a presentation outside of class time or do additional reading.
Evaluation: In summary, your grade will be comprised of the following elements:
Homework assignments (25%)
Papers (25%)
Final examination (20%)
Team project individual grade (20%)
Class participation (10%)
Grade scale:
A 90-100
B 80-89
C 70-79
D 60-69
FBelow 60
SPECIAL NEEDS: If you need course adaptations or accommodations because of a disability, if you have a medical and/or safety concerns to share with me, or if you need special arrangements for the classroom or in case of evacuation, please make an appointment with me as soon as possible.
ECN410 Public Finance Schedule
The following is a planned course of study and may be revised according to schedules of guest speakers. Any revisions will be discussed with students and posted on my website.Date / Topic / Readings and Assignments due today
Introduction
Jan 17 / Introduction to Public Finance / Rosen, Chapter 1
Jan 19 / A Primer on Microeconomics / Rosen, pp. 552-563
Jan 24 / Public Finance History / Wallis article (on reserve)
Methods
Jan 26 / Methodology / Rosen, Ch 2
Jan 31 / Methodology
Team formation / Rosen, Ch 3
Assignment 1 due
Feb 2 / Guest speaker Dan Rubin, CHOICE Regional Health Network
Feb 7 / Cost Benefit Analysis / Rosen, Chapter 11
Assignment 2 due
Feb 9 / Cost Benefit Analysis Applications
Guest speaker Cathy Carruthers, Dept of Ecology / Currie, 2001 “Early Childhood Educ”
(handouts)
Public Expenditure
Feb 14 / Public Goods / Rosen, Ch 4
Ladd, 2000, “School Vouchers, A Critical View.” JEP
Assignment 3 due
Feb 16 / Externalities
Team discussions / Rosen, Ch 5
Feb 21 / Political Economy / Rosen, Ch 6
Assignment 4 due
Feb 23 / Income Transfer Programs / Rosen, Ch 7
Feb 28 / Social Programs / Rosen, Ch 8
& Blank, 2000. “Fighting Poverty: Lessons from Recent US History”. JEP
Paper 1 Due
Mar 2 / Team Projects Discussion
Mar 7-9 / Spring Break / (no classes)
Mar 14 / Social Insurance
Guest speaker: Marc Baldwin, Governor’s Policy Office / Rosen, Ch 9
Mar 16 / Health Care / Rosen, Ch 10
& Grob, 2002. “Defining Responsibility”
Taxation
Mar 21 / Tax Analysis: Income Distribution / Rosen, Ch 12
Assignment 5 due
Mar 23 / Tax Analysis: Efficiency & Equity / Rosen, Ch 12&13
Mar 28 / Personal Income Tax / Rosen, Ch 15
Postrel, 2000. The U.S. Tax System is Discouraging Married Women from Working. NYT
Assignment 6 due
Mar 30 / Corporate Taxation / Rosen, Ch 17
Apr 4 / Case Study: The Enron Debacle / Gravelle, 2003. The Enron Debacle
McKinnon and Hitt, 2002.Assignment 7 due
Apr 6 / Tax Incidence
Guest speaker: Lorrie Jo Brown, Department of Revenue / Wu, Yonghong. 2005. “The Effects of State R&D Tax Credits…” JPAM 24(12):785-802.
Apr 11 / Deficit Financing
Team preliminary reports / Rosen, Ch 18
Apr 13 / WashingtonState’s Budget Process
Guest speaker: TBA
Apr 18 / Sales & Consumption Tax / Rosen, Ch 19
Paper 2 due
Apr 20 / State Investments
Guest speaker: Joe Dear, State Investment Board
Apr 25 / Federalism / Rosen, Ch 20
Assignment 8 due
Apr 27 May2 / (Presentations) / Team Presentations
May 4 / Review / Final written team projects and evaluations due
Final date for resubmission of work
May 9, 8am / Final Exam
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