Economics for Public Policy

In this initial module, you will meet your learning community.

Your first module will focus on two topics: rational choice, and supply and demand. Based on the activities in this week, you can expect to be able to do the following:

• Discuss what the mainstream economic approach is, and evaluate potential applications and limitations of the theory of rational individual choice;
• Differentiate some key concepts used by economists following this approach: demand, supply, and market equilibrium.

The two topics in this module are: markets and efficiency, and trade. Based on the activities in this week, you can expect to be able to do the following:

• Critically assess how economists evaluate outcomes (of economic interaction);
• Be aware of the conditions under which market outcomes are Pareto efficient;
• Understand the theory of comparative advantage and its implications for patterns of trade.

In this module, there is a topic, imperfect competition, and a case study, US versus Microsoft. Based on the activities in this week, you can expect to be able to do the following:

• Be aware of the different assumptions in the models of perfect competition and monopoly, and understand why monopoly (and market power more generally) is a source of market failure;
• Outline the range of policy responses to natural monopoly and the challenges of competition policy.

In this module, there is a topic, imperfect information, and a case study, The Affordable Care Act. Based on the activities in this week, you can expect to be able to do the following:

• Be aware of different forms of asymmetric information, and understand why these asymmetries are sources of market failure;
• Appreciate how private providers respond to asymmetric information, and the extent to which policymakers can intervene to address this source of market failure.

In this module, there is a topic, missing markets for external effects, and a case study, Carbon Pricing. Based on the activities in this week, you can expect to be able to do the following:

• Be aware of the different sources of external effect: negative externalities, public goods, and common-pool resources, and understand why there is market failure in each case;
• Appreciate the range of policy responses to external effects, including current debates concerning ways to reduce carbon emissions.

There are two topics in this module: tax incidence and optimal taxes. Based on the activities in this week, you can expect to be able to do the following:

• Understand the concept of the economic incidence of a tax and how economists assess the ‘fairness’ of tax systems;
• Appreciate the main lessons of the theory of optimal taxation, and be aware of the extent to which these lessons have been followed in practice.

There are two topics in this module: macroeconomic fundamentals, and downturns and policy responses. Based on the activities in this week, you can expect to be able to do the following:

• Understand key macroeconomic variables and make comparisons across economies and over time;
• Be able to link the different components of the monetary policy transmission mechanism;
• Appreciate the economic basis for responses to different types of economic fluctuations.

In this final module, you will be given a fictional policy scenario and two technical reports that the fictional government commissioned from economists.

The task is in two parts. First, you will answer a series of knowledge checks to test your comprehension of the material in the reports. Once complete, you will prepare a policy brief that covers the aspects discussed in previous modules.

Most economic issues and decisions are viewed through the eyes of political beliefs. In turn, these beliefs turn into policies. Therefore, it is an advantage for public policy professionals to have at least a basic understanding of economics concepts so they can communicate with economists effectively in their work.

Our Economics for Public Policy course takes eight weeks to complete, with 3-5 hours of study time per week recommended.

There are no specific entry requirements for the Economics for Public Policy course, but please be aware that this is a master’s level programme; a certain level of commitment will be expected. Tasks and activities must be completed in order to successfully complete the course and gain a certificate.

This course would best suit public policy professionals, or those aspiring to work in the sector, who need a better understanding of the relationship between economics and public policy.