Curriculum Econ 101, Part 10: Public Economics Deep Dive
Econ 101, Part 10: Public Economics Deep Dive
How economists think about what government should do and how to pay for it - the Laffer curve, optimal taxation, Pigouvian taxes, income vs consumption taxes, third-party reporting, social insurance, merit goods, hidden taxes, targeting, debt sustainability and good tax design.
- What Public Economics Studies The central questions of public economics - when should government intervene, how should it raise money, and how to balance efficiency and fairness. 📄 Read-aloud
- The Laffer Curve Why raising tax rates beyond a point can reduce revenue, what evidence says about where that point lies, and how the idea has been used and misused. 📄 Read-aloud
- Optimal Taxation: The Ramsey Rule How economist Frank Ramsey showed that taxes cause less harm on goods whose demand doesn't change much, and why this efficiency rule clashes with fairness. 📄 Read-aloud
- Pigouvian Taxes: Making Polluters Pay How taxes on harmful activities can correct externalities, the idea's origins with Arthur Pigou, and practical examples from fuel to plastic. 📄 Read-aloud
- Taxing Income or Taxing Spending? The economic trade-offs between taxing what people earn and taxing what they spend, including effects on saving, fairness and administration. 📄 Read-aloud
- Why People Pay Taxes: Third-Party Reporting Why tax compliance is high when employers or banks report income to the government, and how India uses TDS and data to widen its tax net. 📄 Read-aloud
- Econ 101, Part 10: Checkpoint 1 Quick checkpoint - five questions on public economics, the Laffer curve, the Ramsey rule, Pigouvian taxes and third-party reporting. 5 questions
- Why Governments Provide Social Insurance Why private markets often fail to provide insurance against unemployment, old age and illness, and why governments step in with social insurance. 📄 Read-aloud
- Merit Goods and Paternalism Why governments encourage some goods like education and vaccines and discourage others like tobacco, and the debate over when government knows best. 📄 Read-aloud
- Hidden Taxes: Why Salience Matters How people respond differently to taxes they notice and taxes they don't, what an experiment in supermarkets showed, and why this matters for tax design. 📄 Read-aloud
- Targeted or Universal Benefits? The trade-offs between giving benefits only to the poor and giving them to everyone, including exclusion and inclusion errors and administrative costs. 📄 Read-aloud
- When Is Government Debt Sustainable? How the interest rate compared with the growth rate determines whether government debt rises or falls relative to GDP, and why this simple rule matters. 📄 Read-aloud
- Principles of Good Tax Design The principles economists use to judge tax systems - efficiency, fairness, simplicity and stability - drawing on the Mirrlees Review, plus a recap of the module. 📄 Read-aloud