Public Economics juraj.nemec@umb.sk juraj.nemec@econ.muni.cz Main course goals •A: To understand the role of the state (with the respect to the normative background of the student) • •B: To know in detailed way and to understand „own – thesis based -specialisation“ Course requirements •Written essay Neoclassical view on the economic role of the state •Allocative function (market failure): •Distribution (welfare state, solidarity) •Stabilisation (macro) •Regulation (rule of law) – • „Market failure“ •Competitive markets are expected to „produce“ first best, if: •A: Individuals and firms behave rationally •B: Full information exists •C: Full competition exists •D: Collective goods do not exist •E: Externalities do not exist „Government failure“: Public Choice •General issues •Voting rules •Bureaucracy