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Course Outline:
1. Theory (12 lectures)
(a) The Limitations of
Government (1 lecture)
- Stiglitz 2000, Chapter 1
- "Government Failures in Development"(Krueger 1990)
(b) The welfare theorems
(2 lectures)
- Stiglitz 2000, Chapters 3, 4, and 5
(c) Public Goods, Externalities,
Market Failures and Institutions (6 lectures)
- Stiglitz 2000, Chapters 6, 8 and 9
- "Natural Monopolies: Regulation and Franchise Auctions”
(Leonard, mimeo)
- "The market for `Lemons': Quality uncertainty and the market
mechanism"(Akerlof 1970)
- "The Role of Institutions in the Revival of Trade" (Milgrom,
North, and Weingast 1990)
(d) Taxation (3 lectures)
Taxes can be used for raising government income
and taxes can be used to distort consumer and producer decisions.
- Stiglitz 2000, Chapters 17, 18, 19, 20, and 21
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