This policy-oriented module offers an introduction to the role and limits of government interventions in the microeconomic management of developed economies. Overall, the emphasis is placed on: (i) the identification of most common market failures and the options available for government to address them; (ii) the choice and design of economic and regulatory policies to mitigate these market failures.
The module also touches on the drivers of government failures and the interactions between economics and politics as constraints on the design of public policies, including a wide range of policy issues and trade-offs.
More specifically, focuses on three aspects of the economy. First, the module examines competition policy by studying monopoly industries: the sources, creation and exercise of monopoly power and the principles and practice of monopoly regulation.
Second, the module examines issues surrounding the urban economy. Cities are the locus of global economic dynamism. Dense urban spaces provide advantages to firms, by improving their access to markets and prospects for innovation, and workers, by increasing both their productivity and their leisure opportunities. However, density also causes problems in the form of greater congestion, higher housing costs, and elevated risk of disease exposure. We will examine key policy issues in this context, based around the monocentric city model.
Finally, the module covers a broad range of concepts, theories, and topics related to the economics of health and health care. It builds on the insights of microeconomic theory and has a focus on how governments balance efficiency and equity concerns in setting health policy.
The module aims to provide students with an understanding of many aspects of public policy at the microeconomic level, with a focus on: competition policy; urban planning and policy, and health care provision. Upon completion of the module students should be able to, for example, describe the behaviour of a monopolist and describe the difficulties faced by a regulator in controlling these behaviours. Equally, students should be able to understand why government play such an important role in urban planning and the health care sector.
Lecture 1: Introductory Concepts in the Regulation of Markets
Motta, chs 1, 2 OR Viscusi chs 10, 11, (2 and 12 optional)
Lecture 2: The Regulation of Market Structure and Conduct
Motta, chs 3.1, 3.2, 4,1, 4,2, 5.1, 5.2, 5.3, 6.1, 6.2, 7.1, 7.2 OR Viscusi chs 3, 5, 7, 8
Zenger, H., and Regibeau, P, (2022) Mergers with Homogeneous Products, A Primer. Research Handbook on Global Merger Control, forthcoming, Available at SSRN: https://ssrn.com/abstract=4154423 or http://dx.doi.org/10.2139/ssrn.4154423
Lecture 3: Innovation
Viscusi, ch 4 AND
European Commission, Directorate-General for Competition, Montjoye, Y., Schweitzer, H., Crémer, J., Competition policy for the digital era, Publications Office, 2019, https://data.europa.eu/doi/10.2763/407537
Lecture 4: Introduction to Urban Economic Policy – Key Economics Concepts for Urban Areas
O'Sullivan chs 1&2
Lecture 5: Amenities and Agglomeration – Sprawl and Market Failures in Cities
O'Sullivan: chs 4-6
Lecture 6: Private and Public Policy Responses – Tiebout, Trams, and more
O'Sullivan, chs 18-20
Lecture 7: Socioeconomic disparities in health
Bhattacharya, Hyde and Tu, ch 4
Lecture 8: Equity and efficiency concerns in health policy
Bhattacharya, Hyde and Tu, ch 15
Lecture 9: Different models of health policy
Bhattacharya, Hyde and Tu, ch 16
Lecture 10: Student Presentations and Review