IBE316-fin - IBE 316 Economic Policy Stiglitz Economics of the Public Sector Final Review Keisuke OTSU Sophia University FLA Spring 2008 OTSU(Sophia

IBE316-fin - IBE 316 Economic Policy Stiglitz Economics of...

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IBE 316 Economic Policy Stiglitz: Economics of the Public Sector Final Review Keisuke OTSU Sophia University FLA Spring 2008 OTSU (Sophia University FLA) IBE 316 Spring 2008 1 / 16
Chapter 10 The Analysis of Expenditure Policy Need for program Market failures Alternative forms of government intervention Importance of particular design features Private sector responses to government programs E¢ ciency consequences Distributional consequences Equity-e¢ ciency trade-o/s Public policy objectives Political process OTSU (Sophia University FLA) IBE 316 Spring 2008 2 / 16
Chapter 11 Cost-Bene°t Analysis Social cost-bene°t analysis is di/erent from private cost-bene°t analysis because the government deals with non-marketed goods the government might discount the future di/erently from the private sector For cost-bene°t analysis the government should take into account for non-monetized costs and bene°ts the present discount value of social cost and bene°ts from projects the risk premium distributional e/ects OTSU (Sophia University FLA) IBE 316 Spring 2008 3 / 16
Chapter 12 Health Care Market failures lead to excessive expenditures on health care imperfect information, limited competition, no pro°t motive, third-party payment & fee for service Health insurance has problems: moral hazard, adverse selection, high transaction costs Government is trying to reduce the cost of health care expenditure US: cap tax bene°ts, Medicaid & Medicare reform Japan: Long term elderly medical care (article on moodle) OTSU (Sophia University FLA) IBE 316 Spring 2008 4 / 16
Chapter 13 Defense and Technology Defense expenditure should be made at MC=MB The US defense strategy earlier focused on deterrence during the cold

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