ECON 3403 [0.5 credit] Introduction to Public Economics: Expenditures

Winter, 2021

Professor: Frances Woolley

Synchronous session: Tuesdays 10:35 to 11:25 a.m. (see notes below)

Office hours (group sessions) Tuesdays 3:00 to 4:00

Office hours (individual meetings) Tuesdays 4:00 to 5:00

TA: Matarr Sambou.


Course description: The role and nature of the government sector in the economy, the theory of public goods, the equity and efficiency effects of public expenditures, voting rules and fiscal politics, techniques of public expenditure analysis, and intergovernmental fiscal relations.

Preclusions and prerequisites: Precludes additional credit for ECON 3003 (no longer offered) and ECON 3408 (no longer offered). Credit will not be given if taken concurrently with or after ECON 4402 (no longer offered) or ECON 4403. Prerequisite(s): ECON 1001 and ECON 1002 or ECON 1000 or FYSM 1003.

Class format: Video lectures on CuLearn (asynchronous), approximately 2 hours per week, plus one hour per week (synchronous) session for problem solving, examples, break-out groups or discussion.

Synchronous sessions: Links to the synchronous sessions will be sent via email and posted on culearn. Participation in the synchronous sessions is strongly recommended but not mandatory. Because I want to protect the privacy of students participating in the sessions, and encourage attendance, I will not be taping the synchronous sessions. Students are not required to have their computer video on during the mandatory sessions, but will need computer audio to participate in discussions. Students who are unable to attend the synchronous sessions are strongly advised to reach out to me (Prof Woolley) for guidance, form their own study groups with other students in the class, and attend the group session office hours.

Office hours: Prof Woolley will be holding weekly office hours Tuesdays from 3:00 to 5:00, as noted above. TA Sambou will hold additional office hours prior to exams, and when major assignments are due. TA office hours will be announced on CuLearn under “office hours”.

Textbook: Economy, Society and Public Policy. Free on-line textbook available at https://www.core-econ.org/espp/


Week
Title
Doing Economics
1
  Introduction.
  Background
  and basic
  concepts.
  Introduction.
  Readings: Economy, Society and Public Policy. unit 1. Capitalism and democracy:
  Affluence, inequality, and the environment . https://www.core-
  econ.org/espp/book/text/01.html
  Hans Rosling, 200 years in 4 minutes ( https://tinyco.re/5696325 ), Tim Harford, 50
  things that made the modern economy, episode on the Lightbulb,
  https://www.bbc.co.uk/programmes/p04knm03 .
  Episode on the Limited Liability Company
  https://www.bbc.co.uk/programmes/p058qrk3
  Episode on the iphone: https://www.bbc.co.uk/programmes/p04hyzm5
  Optional: Hans Rosling, the magic washing machine https://youtu.be/BZoKfap4g4w
  Skill-building exercise: Doing economics Empirical Project 1 https://www.core-
  econ.org/doing-economics/book/text/01-01.html . Do the project in Excel (go to
  https://carleton.ca/its/ms-offer-students/ to find out how to download a free copy
  of Excel). Complete up to part 1.1, question 5.
2
  Social
  interactions
  and economic
  outcomes
  Readings: Economy, Society and Public Policy Unit 2 https://www.core-
  econ.org/espp/book/text/02.html Key concepts: externality, public good, common
  property, dominant strategy, Nash equilibrium.
  Videos: Lecture plus Golden Ball video (6 minutes)
  https://www.youtube.com/watch?v=S0qjK3TWZE8&t=324s
  CORE video: The Invisible hand game (4 minutes)
  https://www.youtube.com/watch?v=Sfh0Qj78dvA
  The coordination game (6 minutes) https://www.youtube.com/watch?v=HtA6I-
  5pFq8
  Additional resources: Excel course here https://edu.gcfglobal.org/en/excel/
  Skill building exercise. Complete Empirical Project 2 Part 2.1: Collecting and
  analysing data from experiments https://www.core-econ.org/doing-
  economics/book/text/02-01.html Work in teams of 4 to 10 students. Each student
  in the team should submit a copy of the assignment. It’s o.k. for students on the
  same team to hand in the same assignment – just include a list of your team mates’
  names in your assignment. We will devote this week’s synchronous session to
  working on this assignment, so you can find team mates there. Please submit your
  excel spreadsheet and a word document answering the questions in Part 2.1 of the
  empirical exercise
3
  Public policy
  for fairness
  and efficiency.
  Readings: Economy, Society and Public Policy Units 3 and 7. https://www.core-
  econ.org/espp/book/text/03.html Skip section 3.9. (Unintended consequences of a
  redistributive tax) https://www.core-econ.org/espp/book/text/07.html Most of
  unit 7 should be review, but be sure to understand section 7.11. Key concepts:
  Pareto efficiency, Pareto improvement, Coase theorem.
  Videos: Lectures on culearn. Kathryn Graddy Fishing for Perfect Competition Video
  (4 minutes) https://www.youtube.com/watch?v=5hJF8zNJg5I
  Skill building exercise: Work through and submit “Weeks 1 to 3 practice problems”
  available on cu-learn. Write your answers by hand using pen (or pencil) and
  paper, scan or photograph them, and upload them to culearn. Zero marks will be
  given for your assignment if it does not have your name on it, or if it is not hand
  written.
4
  Work
  decisions and
  income
  support
  Readings: Economy, Society and Public Policy Unit 4. https://www.core-
  econ.org/espp/book/text/04.html
  Basic information on social assistance in Ontario:
  https://www.ontario.ca/page/social-assistance
  Canada’s Forgotten Poor pages 1 to 25 (skip the commentary) https://irpp.org/wp-
  content/uploads/2020/09/Canada-Forgotten-Poor-Putting-Singles-Living-in-Deep-
  Poverty-on-the-Policy-Radar.pdf
  The pros and cons of Canada’s child benefit (note: this is from a source that
  supports traditional family values and is opposed to child care)
  https://ifstudies.org/blog/the-pros-and-cons-of-canadas-child-benefit
  Skill-building exercise: Go to
  https://docs.google.com/spreadsheets/d/1FsWWjscwHfWUSEd2Yu8IhiU8VU-
  QkWobcDtacyLqvG8/edit#gid=0 . Click “file” and then “download” to download the
  spreadsheet. Use the spreadsheet to answer the “Work decisions and income
  support” questions on CuLearn.
5
  Causes and
  Measurement
  of Inequality
  Required readings: Economy, Society and Public Policy Unit 5.
  The Economy, unit 19, available here: https://core-econ.org/the-
  economy/book/text/19.html
  Fortin, N., Green, D. A., Lemieux, T., Milligan, K., & Riddell, W. C. (2012). Canadian
  inequality: recent developments and policy options. Canadian Public Policy, 38(2),
  121-145. Available through Carleton library (search Omni)
  Max Roser and Esteban Ortiz-Ospina, specific readings to be announced,
  https://ourworldindata.org/income-inequality
  Videos: Lectures on culearn.
  Skill building exercise: Many photographers have tried to capture income inequality
  in pictures – see, for example, the photographs here
  https://www.bbc.com/news/in-pictures-45257901 , Gapminder’s “dollar street”
  https://www.gapminder.org/dollar-street/ or this collection of photo essays here
  https://www.theguardian.com/world/ng-interactive/2015/sep/24/photograph-
  inequality-sustainable-development-goals-poverty-climate-change-action2015 .
  Take a photograph of something that represents inequality to you, and write a brief
  explanation (maximum 250 words) of what your photograph shows, and how it
  relates to economic inequality.
6
  Firms,
  Workers, and
  Employment
  Insurance
  Readings: Economy, Society and Public Policy unit 6 https://www.core-
  econ.org/espp/book/text/06.html especially sections on labour discipline, efficiency
  wages, unemployment insurance. Also review unit 4
  Pierre Brochu Till Gross and Christopher Worswick Temporary foreign workers and
  firms: Theory and Canadian evidence, Canadian Journal of Economics – access
  through Carleton University library – read introduction and concluding remarks
  only.
  Skill building exercise: Work through and submit “Weeks 4 to 6 practice problems”
  available on cu-learn. Write your answers by hand using pen and paper, scan or
  photograph them, and upload them to culearn. Zero marks will be given for your
  assignment if it does not have your name on it, or if it is not hand written.
7
  Catch-up, pre-
  midterm
  review.
  Downloading
  data and
  creating
  beautiful
  charts
  Lecture notes +
  Prof. Woolley’s “chart to watch” for 2021 (see CuLearn).
  How to download data from Statistics Canada website:
  https://www.youtube.com/watch?v=4jdlqFu6Yak
  How to make charts in Excel – video #23, Charts, in this series:
  https://edu.gcfglobal.org/en/excel/
  Chart design videos:
  How to make data visual (6 minutes)
  https://www.youtube.com/watch?v=w8Z6_0VS6Wc
  5 eye-tracking discoveries for optimal chart design (5 minutes):
  https://www.youtube.com/watch?v=wc_caViJGQg
  Optional: The visual language of data (first 23 minutes)
  https://www.youtube.com/watch?v=OHltZdFNvg0&t=1297s
  Skill building exercise (done in teams of two or three, come to the synchronous
  session or the group office hours to find someone to work with on this assignment):
  download some data from the Statistics Canada website and create a chart. Trade
  charts with your team member. Import your team member’s chart into a word
  document. Write 150 to 300 words about your team member’s chart – what does
  the chart show? Why should anyone care about the chart? How could the chart be
  improved? Submit your word document. Be sure to include your name and your
  team member’s name on the submission.
8
  Midterm

9
  Employment
  Insurance
  Readings: Economy, Society and Public Policy unit 6 https://www.core-
  econ.org/espp/book/text/06.html especially sections on labour discipline, efficiency
  wages, unemployment insurance. Economy, Society and Public Policy unit 8,
  sections to be determined https://www.core-econ.org/espp/book/text/08.html
  EI Failed So We Made CERB: Now What Should We Learn?
  https://ppforum.ca/publications/ei-failed-so-we-made-cerb-now-what-should-we-
  earn/
  Modernizing EI for the Future of Work: https://ppforum.ca/wp-
  content/uploads/2019/05/PPF-Modernizing-EI-for-Future-of-Work-April-2019-
  EN.pdf
  Video: IRPP Webinar on the future of EI within Canada’s social safety net
  https://irpp.org/irpp-event/webinar-the-future-of-ei-within-canadas-social-safety-
  net-access-adequacy-and-work-incentives/
  Skill-building exercise: Go to
  https://docs.google.com/spreadsheets/d/1FsWWjscwHfWUSEd2Yu8IhiU8VU-
  QkWobcDtacyLqvG8/edit#gid=0 . Click “file” and then “download” to download the
  spreadsheet. Go to the Go the tab marked “EI”. Create your own EI system by
  changing the parameters in red under MYO (MY Own). Your option will appear in
  red on the graph “potential income constraint”. Copy the graph into a word
  document and explain why you think your system is better (or worse) than the
  existing EI system.
10
  Externalities
  and public
  goods
  First draft of
  chart
  assignment
  due.
  Required readings: Economy, Society and Public Policy, unit 11.
  The Economy, unit 20.
  Podcast (9 minutes): 50 Things that Made the Modern Economy: Antibiotics
  https://www.bbc.co.uk/programmes/p04pfn2z
  Skill building exercise: participate in in-class experiments and class discussion held
  during this week’s synchronous session - “provision point public good game” and
  “volunteers dilemma” at http://veconlab.econ.virginia.edu/
11
  Governments
  and markets
  in a
  democratic
  society
  Required readings: Economy, Society and Public Policy, unit 12 https://www.core-
  econ.org/espp/book/text/12.html
  Question and answer session with Member of Parliament Garnett Genuis. MP
  Genuis is a former ECON 3403 student and B PAPM graduate. He serves as MP for
  Sherwood Park-Fort Saskatchewan, and is currently the Conservative Party’s
  Shadow Minister for International Development and Human Rights.
  Skill-building exercise: Write 250 to 500 words describing what you learned from
  MP Genuis’s talk.
12
  Health and
  Education in
  Canada
  Readings: : Economy, Society and Public Policy, unit 12 https://www.core-
  econ.org/espp/book/text/12.html
  Chart assignment due Wednesday April 7th at 4 p.m.
  Make-up skill-building exercise (may be handed in at any time up to the last day of
  class). Take a photograph of something that represents an externality or a public
  good to you. Write 250 to 500 words explaining what your photograph represents,
  why this is an externality/public good, and what type of public policies (for example:
  enforcement of property rights, regulations, subsidies, fines, taxes etc) could be
  used to address issues associated with this externality/public good.
13
  Catchup and
  pre-midterm
  review
  Skill-building exercise/final review: Work through and submit “Weeks 9 to 12
  practice problems” available on cu-learn. Write your answers by hand using pen
  and paper, scan or photograph them, and upload them to culearn. Zero marks will
  be given for your assignment if it does not have your name on it, or if it is not
  hand written.


Evaluation:

  Due date
  Component
  Weight
  Every Wednesday at 4:00 p.m., from January
  Skill-building exercises
  15
  Week 8 (March 9th)
  Midterm
  30
  Week 9 (March 17, 4 p.m.)
  Chart assignment (first draft)
  5
  Week 12 (April 7)
  Chart assignment (final)
  10
  Final exam
  As scheduled
  40



Note on evaluation, expectations and late policies:

Skill-building assignments: Skill-building assignments will be marked on a pass/fail basis. Students who submit their assignments on time, submit their own original work (except where group work is authorized), and have made a good attempt to complete the entire assignment will receive a passing grade. Students receive two marks per passing grade for the first 5 assignments submitted, and 1 mark per passing grade for the next 5 assignments submitted. No marks are given for late assignmentshowever there is a make-up assignment (see week 12) for students who are unable to complete one or more of the skill-building exercises.

Midterm exam: The midterm exam will be a mix of multiple-choice, short answer (problem solving) and essay type questions. There will be no make-up exam for students who are unable to write the midterm; students who are unable to write the midterm will have the weight of the midterm shifted to their final exam. Similarly, students who do better on the final exam than on the midterm exam will have the weight of the midterm shifted to their final exam.

Chart assignment: Download data from Statistics Canada, Finances of the Nation, or another source of high quality, reliable, Canadian data. Use the data to create a clear, well-labelled graph, and write 500 to 750 words describing the graph. More information on expectations and evaluations will be given in the lectures and on culearn. Students who have a valid reason for being unable to complete the chart assignments on time must submit the declaration of illness form (found here https://carleton.ca/registrar/wp-content/uploads/self-declaration.pdf) as soon as practically possible.

Final exam: The final exam will be cumulative, and similar in format to the midterm exam.


Requests for Academic Accommodation:

You may need special arrangements to meet your academic obligations during the term. For an accommodation request, the processes are as follows:

Pregnancy obligation: Please contact your instructor with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist. For more details, visit the Equity Services website:

Religious obligation: Please contact your instructor with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist. For more details, visit the Equity Services website:

Academic Accommodations for Students with Disabilities: If you have a documented disability re- quiring academic accommodations in this course, please contact the Paul Menton Centre for Stu- dents with Disabilities (PMC) at 613-520-6608 or [email protected] for a formal evaluation or contact your PMC coordinator to send your instructor your Letter of Accommodation at the beginning of the term. You must also contact the PMC no later than two weeks before the first in- class scheduled test or exam requiring accommodation (if applicable). After requesting accommodation from PMC, meet with your instructor as soon as possible to ensure accommodation arrangements are made. For more details, visit the Paul Menton Centre website.

Survivors of Sexual Violence: As a community, Carleton University is committed to maintaining a positive learning, working and living environment where sexual violence will not be tolerated, and where survivors are supported through academic accommodations as per Carleton’s Sexual Violence Policy. For more information about the services available at the university and to obtain in- formation about sexual violence and/or support, visit: https://carleton.ca/sexual-violence-support.

Accommodation for Student Activities: Carleton University recognizes the substantial benefits, both to the individual student and for the university, that result from a student participating in activities beyond the classroom experience. Reasonable accommodation must be provided to students who compete or perform at the national or international level. Please contact your instructor with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist. For more details, see the policy at: For more information on academic accommodation, please contact the departmental administrator or visit: https://students.carleton.ca/course-outline.

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