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Public FinancePublic Finance
Mojmír Sabolovic
mojmir.sabolovic@law.muni.cz
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Opening Remarks
Mojmír Sabolovič
e-mail: mojmir.sabolovic@law.muni.cz
office: No. 122
office hours: Tuesday 8:30-9:30 p.m.
Thursday 10:00-11:00 p.m.
All infomations are available on the PF
website in terms of IS
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Todaýs Session
­ Detailed course outline
­ Principles of Public finance
­ Tasks elaboration
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General Rules
For successful graduation participants are
obliged to attend 5 seminars
Term of assignment submission is a week
before the last seminar
Assignment presentation in module 6
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Assignment
Topic of assigment is macroeconomic
analysis of selected EU member state
focused on public finance
Students carry out assignment in pair
Min. duration of time series is 5 years
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Structure of Assignment
Title
Abstract
Keywords
Content
Introduction (Aim, Subject, Methodology)
Theoretical background
Data analysis (graphs, tables)
Conclusion/Discussion
List of references
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Formal requirements for assignments
Writing an assignment on a PC using
WORD
Minimum length of paper 10 pages
Page layout: margins 2,5 cm, lines 1,5,
letter size 12
Quotations have to follow
The Dean dirrection No.1/2006 and
standard ISO 690
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Data Requirement
­ Government deficit
­ Government debt
­ Inflation
­ GDP
­ Exports and Imports of goods and services
­ Unemployment
­ Cost of living
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Course Objectives
To give you the capacity to understand the theory
and apply, in real world situations, the techniques
that has been developed in public finance.
If it cannot be applied, who cares?
To give you the big picture of public finance so
that you can understand how things fit together.
You can forget the details, but don't miss the
story.
To show you that public finance is fun.
It takes more work, but it is more fun.
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TasksTasks
Personal expectancy of this subject
Try to characterize Public Finance
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Principles of Public finance
..........Quantity of disparate
conceptions...............
What is Finance?
What is Public finance?
All these terms are concepts of
economics
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Economics
"Economics is that way of understanding
behavior that starts from the assumption that
people have objectives and tend to choose the
correct way to achieve them." (D.Friedman)
,,Economics is the social science that studies the
consumption, production and distribution of
goods and services. The word 'economics' is
from the Greek term for oikos (house) and nomos
(custom or law), hence "rules of the household.,,
(VK Publications)
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Assumptions of Economic Policy
Economic policy concerns basic functions
of government that enters the economy as
a specific subject with the view of
compensating market failures.
Major Functions in general:
Allocation
Redistribution
Stabilization
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Instruments of Economic Policy
Monetary Policy
,,Is is a policy of influencing the economy
through changes in the money supply and
credt availability in the economy."
(D.Colander)
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Instruments of Economic Policy
Fiscal Policy
Is the term that defines the set of
principles and decisions of a government
in setting the level of public expendictures
and how that expenditure is funded.
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Role of Economic Policy
(Korytárová)
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Magic tetragon
(Korytárová)
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Sorts of "Finance"
Personal finance ­ used by
individuals
Corporate finance ­ used by
business
Public finance ­ used by government
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Public Finance vs. Public Sector Economics
The scope of public finance is not always exactly clear
Statement of problem - Dichotomy of 2 Approaches
Theory of Public Finance Public Sector Economics
Preference
Public funding Economic Role of State
Public revenues Public Sector Activity
Public Expenditures
Budgetary Policy Production Functions
Public Budget Deficit Efficiency
Public debt
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Scope of Analyses
Our focus is on the microeconomic
functions of government, the way of
government affects the allocation
resources and distribution of income
Use term Public finance
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Scope of Analyses
Real World of Government Activity
Science
University Subject
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Elementary axioms of Public Finance
Irrevocable performance
Anticoincident fulfillment
Involuntary
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In the End ­ what the Public Finance Is
Public finance concerns economic
performance of all state authorities
together, and include government budget,
budget of local authorities, special funds
and budgets of state-owned enterprises
Public Fincne is nothing else than a
sophisticated discussion of relationship
between the individual and state. There is
no better school of training than public
finance
(Václav Klaus)