Student guide Faculty of Economics A.Y. 2008/09

The course is designed to give students of the Faculty of Economics a comprehensive overview of the main topics of Public Economics, focusing in particularon the aspects relating to taxation, the workings of the pension system, deficit financing of public spending and fiscal federalism, with reference to the Italian institutional framework.
 
The Financial Science course is divided into three teaching modules. Module 1introduces and informally discusses the first and second theorems of welfare economics, which are the foundations of Public Economics, as well as introducing some fundamentals of public-sector accounting. Module 2provides an overview of Italian public finance, within the framework of the constraints imposed by membership of the European Union. The topics of deficit spending, social expenditure and the pension system are discussed, with an emphasis on their associatedmechanisms of redistribution. Module 3 coversthe topic of taxation, with a particular focus on the Italian system. This is followed by an economic analysis of taxation (excessive tax burden and tax incidence), with anexamination of IRE (personal income tax), IRES (corporate income tax), VAT and IRAP (regional business tax). Finally, the topic of the allocation of expenditure and revenuesamong different levels of government (fiscal federalism) is addressed.

Microeconomics ideas: consumption, production, costs, perfect competition, monopoly.

Module 1
Introduction to Public Economics
Positive analysis
Regulatory analysis
Economics of welfare and redistribution
 
Module 2
Public finance in Italy
Fiscal policy in the European economic and monetary union
Deficit spending
Taxation and macroeconomic distortions
Ricardian equivalence
Sustainability of public debt
 
Module 3
Taxation and distribution: theoretical aspects
Taxation and efficiency
Personal taxes and individual behaviours: taxes on earned income
Overview of taxes in Italy
Personal income tax (IRE)
Corporate income tax (IRES)
Taxation of unearned income.
Taxation of consumption (VAT)
Financing of Regions and Local Authorities (IRAP regional business tax, and ICI local housing tax).

There will be a written exam, consisting of exercises and open questions relating to the course programme.

P. Bosi e M.C. Guerra, I Tributi nell’Economia Italiana, Il Mulino, Bologna, edizione 2008
P. Bosi, Corso di Scienza delle Finanze, il Mulino, quarta edizione, 2006
Additional reading materials made available to students on the course website.
Exercises made available to students on the course website.