This is a course on how economists think about government revenue and government expenditures – how governments raise and spend public money. Public Finance is a subfield of microeconomics. In the course, we will begin by delving more deeply into rationales for government intervention in the market (introduced in Micro A/B), including public goods, externalities, and equity. We will then use the tools of economics to analyze a number of important public policy issues, such as public health insurance, social security, and anti-poverty programs. The second part of the course will cover tax policy, and we will explore how the burden of taxation is distributed, how taxes affect the economic behavior of individuals and firms, and options to reform the tax system. The course will cover the theory of public finance in depth, but the ultimate aim will always be to apply the concepts to real world policies and programs. Toward that end, we will spend substantial time both inside and outside of the classroom applying the concepts and reviewing existing empirical evidence. The course focuses on the US, but we will discuss comparisons with other countries from time to time.
Professor of Public Policy; Professor of Economics
Stevenson is a labor economist who publishes widely about the labor market and the impact of public policies on outcomes both in the labor market and for families. Her research explores women's labor market experiences, the economic forces shaping the modern family, and how these experiences and forces influence each other. She served as the chief economist of the U.S. Department of Labor from 2010 to 2011, participating as the secretary's deputy to the White House economic team.