Public Economics Assignment
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Public Economics & Political economy?
Public Economics studies all aspects of state intervention in the economy. It provides a basis for analyzing whether and to what extent public intervention in the market is necessary or not. Aspects currently covered by Public Economics are taxes, publicly provided insurance, public goods, state pensions, public health, and public education.
Political economy is at the limit between political science and economics: as a political science, it is interested in issues of collective choice, conflicts, and institutions; Like economics, it focuses not on processes, but on results. He is concerned about how the political environment (political system — democracy, dictatorship, type of regime — private, parliamentary, etc.) affects economic outcomes (the size and form of redistribution programs, the amount and type of public goods provided, the tax burden through various fiscal bases, the size of the deficit and debt, etc.).
The main questions he touches on are: how are collective decisions made? How do the various “rules of the game” (institutions) affect the allocation of resources? Methodologically, he models the government (politicians and bureaucrats) as an organization of rational agents (far from the simplified view of the government as a benevolent centralized planner who “fixes” market failures), which also interact rationally with citizens. They are analyzed using game theory.
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