《公共部门经济学》（双语）课程教学大纲

《公共部门经济学》（双语）课程教学大纲

课程代码：REVE3014

课程性质：专业必修课程

授课对象：财政学专业、税收专业以及社会保障专业

开课学期：秋

总学时：54学时学分：3学分

讲课学时：54学时

指定教材：根据英美同名教材编写讲义

参考书目：

1.EconomicsofthePublicSector,JEStiglitz-W.W.NORTON&COMPANY

2.Theeconomicsofthelocalpublicsector,DLRubinfeld-《HandbookofPublicEconomics》

^MeasuringPublicSectorEfficiency:AStudyofEconomicsDepartmentsatAustralian

UniversitiesGaryMadden,ScottSavage,StevenKemp-{EducationEconomics》

色Reformingthelocalpublicsector:economicsandpoliticsinprivatizationofwatersndsolid

waste,GermaBol,XavierFagcda-《JournalofEconomicPolicyReform》

5.Behavioraleconomicsperspectivesonpublicsectorpensionplans,JBeshears,JJChoi,

DLaibson,…-HarvardKennedySchoolofGovernment

6.AnalysisofUrbanPublicSpacesBasedonPublicSectorEconomics,BWLing,WWang-《Urban

PlanningForum》

7.NEWINSTITUTIONALECONOMICSANDTHEANALYSISOFTHEPUBLICSECTOR

,BDollery,《ReviewofPolicyResearch》

8.ModernPublicFinance:TheStudyofPublicSectorEconomics，MSComiez,BPBerber,(Journal

ofFinance》

%Publicsectoradministrationofecologicaleconomicssystemsusingmediatedmodeling

»dBMVan,JRKenyan,EKrueger,《AnnalsoftheNewYorkAcademyofSciences》

10.Theeconomiesandpoliticsofpuhlic.sectorpayandthecrisis,DHall,^Inventiones

Mathematicae^

lljublicfinanceintheoryandpractice,RAMusgrave,PBMusgrave,清华大学出版社

12.Thedesignoftaxstructure:Directversusindirecttaxation,ABAtkinson,JE

Stiglitz,《JournalofPublicEconomics》。

教学目的:

本课程教学H的在于使学生通过学习公共部门经济学这门课，掌握有关公共部经济学基本理论框架

体系，在深入理解原有专业知识的同时能够直接运用英语进行科研活动，分析和解决公共经济问题。

具体来说，这门课程的教学目标：

1.提高学生专业英语运用水平；

2.培养学生直接运用英语进行财政学科研活动的能力；

3.培养学生运用英语进行国际学术交流的能力；

4.培养学生的国际视野，随时跟踪财政学科的国际新动态。

Chapter1GovernmentandtheMarket

课时：3周，共9课时

教学内容：

Section1Governmentinamarketsystem

Section2Thestructureofgovernment

Section3Measuringthesizeandscopeofgovernments

1.Whatcausesthegrowthofagovernment?

2.Measuringthesizeofagovernment

A.AbsoluteB.Relative

•Thestructureofgovernments

•Measuringthesizeandscopeofgovernments

1.Howbigshouldgovernmentbe?

A.proportionsofrevenue&expenditure;

B.ER/GDPandFE/GDP-----internationalcomparison

2.Whatmakesgovernmentgrow?

A.Citizendemand;B.Bureaucracy-drivendemand;

C.Elasticrevenuesources;D.Feeforservice

E.lackofabudgetconstraint

3.Constrainingthegrowthofgovernment

思考题：

1.Whatisgovernment?Andwhatismarketeconomy?

2.Howtodealwiththerelationshipbetweengovernmentandthemarket?

3.Whyshouldthegrowthofgovernmentbeconstrained?andhowtodothat?

Chapter2TheoreticalFoundations

课时：3周，共9课时

教学内容：

1.Publicgoodsandexternalities

2.Decisionmakinginthepublicsector

3.Functionsofpublicfinance

1)Allocationofresources;

2)Incomedistribution

3)Economicstabi1ityandgrowth

思考题：

1.Howtounderstandtheexternalitiesofpublicgoods?

2.Howtodistinguishbetweenpublicandprivategoods?

3.Pleasedescribethemainfunctionsofpublicfinance.

Chapter3.PubIicRevenue:Taxation

课时：2周，共6课时

教学内容：

I.Definitionoftaxation

1)Westernscholars:

A.acompulsorylevymadebythepublic

authoritiesforwhichnothingisreceiveddirectlyinreturn.(S.James)

B.atransferofresourcesfrompi'ivatesectorstothepublicsector(J.Stiglitz)

C.theIBFD'sdefinition

2)Domesticscholars:

acompulsoryandgratuitouslevymadebythestateforfulfillingitsfunctionsonenterprises

orindividualsinaccordancewiththecollectionstandardsfortaxlawsorrules,reflecting

akindofspecialdistributiverelationshiptakingthestateasthesubject(Denziji)

3)Asimplecomparison

4)DistinguishingbetweenTAXandTAXATION

II.Principlesoftaxation

1.Definitionofprinciplesoftaxation

2.AdamSmith*sandAdolphWagner*sprinciplesoftaxation

3.Principlesoftaxationinamodernsociety

(1)Equity--------horizontalandvertical

(2)Criteriaforequity-------------

A.Thebenefittheoryoftaxation

B.Theabilitytopaytheoryoftaxation

(3)Measurementsforequity

A.PropertyB.ConsumptionC.Income

(4)Proportional,regressiveandprogressive:axes

Directandindirecttaxation----------Implica:ionsforequity

(5)Efficiency-------maximizationofbenefitsarisingfrom

taxationattheminimizedcostsofcollection

A.Efficiencyofallocationofresources-------Paretostandard.

B.Efficiencyofeconomicperformance--------Thoughtofneutrality

C.Efficiencyoftaxadministration-----Minimizationofcostofcollection

(6)Stability-------built-inandartificialstabilizers(Figure1.and2.)

(7)Abasicconclusion

III.Configurationandmouldsoftaxation

•Configurationoftaxation----------

acomparisonoftaxstructuresofbothdevelopedanddevelopingnations

A.taxstructuresindevelopedcountriesrelyondirecttaxessuchaspersonal

andcorporateincometaxes,andsocialsecuritytaxetc.whiletaxconfigurationsofdeveloping

countriesgiveprioritytoindirecttaxesincludingVAT,excise,salestaxandsoforth.

B.Intheaspectofdirecttaxes,developednationsrelyontaxationofindividualinccmewhile

developingcountriesplaceemphasisonthetaxationoncorporateincome.

C.Moreandmoregovernmentshavepaidmuch<ittentiontotheroleoftheVATinthefunctioning

oftaxsystems,especiallyinEUcountries;

D.Theexcessiverelianceontaxesonforeigntradeisstilloneoftheprominentfeatures

oftaxconfigurationindevelopingnations.

E.Thesocialsecuritytaxsystemtendstobeincreasinglyimportantwiththeadventoftheageing

populationera;

F.Taxationofthepropertiesholdsthesignificantpositioninlocaltaxsystemsof

industrializedcountriesbutisrelativelyimperfectanditsstatusastheprincipaltax

raisingrevenueforlocalgovernmentsisnotstrikingindevelopingcountries.

•patternormouldoftaxsystems

A.themouldoftaxsystemgivingprioritytodirecttaxes

B.thepatternoftaxsystemplacingmuchemphasisonindirecttaxes;

C.themouldoftaxsystemwithlowerleveloftaxation:taxheavens

I).China,soptionsasregardtothepatternoftaxsystem:adebate

IV.Developmentsoftaxation

•Taxlegality--------fourphasesfortheevolutionoftaxlegality:

A.thevoluntarydonationstage;

B.thecontractingimpositionperiod;

C.theautocraticlevyphase;

D.theconstitutionaltaxationstage.

•Functionsoftaxation------

Fromasinglerevenue-raisingfunctiontothemuHi-functionsof

regulatingincomedistributionandfacilitatingeconomicgrowth;

•Formsofcollection-------

Fromthepaymentinkindtothepaymentwithmoneyandthentothee-payment;

•Sizeoftax

A.absolutesize-------Thesizeoftotaltaxrevenue

increaseswiththedevelopmentinnationaleconomy

B.relativesize:T/FR;T/GDP

C.theoptimalleveloftaxation----theLafferCurve

V.Taxbui'den:shiftingandincidence

1)Natureandeffectsoftaxburdenshiftingandincidence

A.NatureB.Effects

2)Formsoftaxburdenshiftingandincidence

A.forwardshiftingB.backwardshifting

C.mixedshiftingD.diffusedshifting

E.capitalizationoftax

3)Factorsaffectingtheshiftingandincidenceoftaxburden

VI.TaxationofIncome

1)Incometeixation:generaldefinition

2)Featuresandfunctionsofincometaxation

A.FeaturesB.Functions

3)Classificationofincometaxation—PIT,CIT

4)Personalincometaxation

A.taxpayerB.taxaoleincome

C.taxrate.

D.administration

E.Presentissuesandpossiblereform

5)Corporateincometaxation

A.taxpayerB.before-taxdeductionsC.taxrate

D.administration

E.Existingissuesandfurtherreform

6)IntegrationofbothPITandCIT

Howtoalleviateoreliminatedoubletaxationofdividendsincome?

7)Socialsecuritytax

VII.Taxationofcommodity(TheB2Vreform

1)Commoditytaxation:generaldefinition

2)Featuresandfunctionsofcommoditytaxation

A.FeaturesB.Functions

3)Categoriesofcommoditytaxation

VAT,excise,salestax,duties,etc.

4)TheValue-addedtax

In-classassignments:

ConsumptiontaxandVATpayable(课堂作业：应纳消费税和增值税计算)

1)KLtd,on22April2015,soldabatchoftaxableconsumergoodsfor¥1170,000(including

VAT).On2April2015,thecompanypurchasedabatchofrawmaterialsusedtomanufacture

taxableconsumergoods,andpaidaninputtaxof¥102,000.Thetransportfeerelatingtothe

puixhaseofrawmaterialswas¥580.TherelevantVATspecialinvoiceswerederivedbythecompany

andgotthroughtherecognitionofthelocalcompetenttaxauthoritiesattheendofthemonth.

Requirement

CalculatetheconsumptiontaxandVATpayablebyKLtdinApril2015,assumingthattheVAT

rate

applicabletorawmaterials&taxablegoodsis17%,theVATratetothetransportfeeis11%,

and

theconsumptiontaxrateis10%.0

2)PLtdentrustedMLtd,acigarettesmanufacturer,toprocessabatchofcuttobaccointo

cigarettesforthesalepurposes.Thematerialscostofthisbatchofcuttobaccowas¥1520,000

netofVAT.PLtdpaidtheprocessingfeesof¥42,000netofVATtoMLtd.

Requirement

Computetheconsumptiontaxamountwithheldby

MLtdwhenPLtdwaspickingupgoods,asumming

therateapplicabletoconsumptiontaxoncut

tobaccois30%.

3)NLtd,on20May2015,distributedabatchoftaxableself-manufacturedcomsumergoodscosting

¥128,000,toallinvestorsofthiscompany.Thecost-profitratiois15%.Theconsumption

taxrateis

10%.TheVATrateis17%.

Requirement

CalculatetheconsumptiontaxandVATpayablebyNLtdinMay2015.

4)InOctober2015,ALtdsold120boxesofself-madecigarettesfor¥2,580,000netofVAT.

Requirement

CalculatetheconsumptiontaxpayablebyALtdinOctober2015providedthattheoutward

transfer

priceofthisbatchofcigarettesis¥72/percarton.Thespecificrateoftaxis¥150per

standardbox.

5)InSeptember2015,QLtdimportedabatchofmakeupsfroirFrance,withthecostof¥1280,000,

insurencepremiumof¥225,()00,andairfreightof¥85,000.Thetariffrateis50%.Theconsumption

taxrateis30%.TheVATrateis17%.

Requirement

CalculatethetotaltaxespayablebyQLtdatthelinkofimportinSeptember2015.

Readingmaterials

HowbusinessescanadapttoChina'sVATreform?

VID.TaxationofProperty(ThelegislationoftherealestatetaxinChina)

(1)Developmentsandnaturesoftaxesonproperties

A.acomparisonwithtaxesonincome;

B.acomparisonwithtaxesoncommodity;

C.naturesoftaxationofproperty--------

stock-basedtax;directtax;regulartaxandlocaltax.

(2)Classificationoftaxesonproperty

A.generalpropertytaxvsspecificpropertytax;

B.staticpropertytaxvsdynamicpropertytax;

C.nominalpropertytaxvsrealpropertytax;

D.propertyvaluetaxvspropertyvalue-addedtax;

E.regularpropertytaxvstemporarypropertytax.

(3)Advantagesanddisadvantagesoftaxesonproperty

A.fromtheangleoffiscalrevenue;

B.fromtheviewpointofincomedistribution;

C.fromtheperspectiveoftaxadministration

IX.Newdevelopmentsinmoderntaxationtheoriesandsystems

1.AnIntroductiontodevelopmentsofmoderntaxation

2.InternationalTaxCompetition

Curbingharmfulinternationaltaxcompetition:effortsbytheOECD

■TheattractionofFD1andfightingagainstharmfultaxcompetition:some

challengesforChina

A.IssuesinthepreferentialtaxregimeaimingtoattracttheFDI;

B.FurtherimprovementofthepreferentialtaxregimeinChina

C.Strengtheninternationalcooperation

withOECD

3.Taxationofthee-commerce

■Basicfeaturesoftheelectroniccommerce:Paperless;addressless(hiddenandmoveable);

Lowcostoftransaction;

■ImportantChallengesfacingbytraditionalinternationaltaxation:

A.HowdoestheresidentcountryforinternetusersimposeataxontheISP?

B.Theconceptofpermanentestablishmenttendstobevague;.

C.Itisdifficulttodistinguishbetweentangiblegoodsandservices;

D.Conflictinthelaxjurisdictions:theissueofwithholdingtux

■Taxationofthee-conunerce:differentcittitudesandcountermeasuresbytheUSA,EUandOECD

USA:1)notaxoninternetconnection;

2)nodoubletaxationofe-conunerce

3)nodiscriminatorytaxone-commerce;

4)thetaxauthoritiescouldnotexpandtheirtaxingpower

andfederaltaxoninternetprohibited

EU:1)noadditionaltaxone-commercebutthecurrentVATsystemneedstobeimproved;

2)Goodstransmittedthroughthee-instrumentshouldbeviewedasservicesprovided;

3)Theabove-mentionedservicesaretaxedonlywhentheyareconsumedwithinEU.

OECD:1)Traditionalprinciples(neutrality,equity,certainty,simplicity,and

efficiency,flexibility)arcalsosuitableforthetaxationofc-commcrcc;

2)Taxtreatmentasregardtothee-commerceshouldbenon-discriminatory;

3)Theapplicationofeachprincipleshouldbebasedontherespectofamember

state*sfiscalsovereignty.

4)Strengthencooperationwithnon-OECDmemberstates.

■Taxationofthee-commerce:policiesandcountermeasuresbyChina

A.ImposenonewtaxonE-commcrceactivities;

B.Improvethecurrenttaxsystemsandstrengthentaxcollection&administration;

C.strengtheninternationalcooperationespeciallywithOECD.

4.EnvironmentalTaxation

•Climatewarming:aglobalissue

•Theoreticalargumentsforenvironmentaltaxation

A.Negativeexternalities

B.Correctivetaxes-----ThePigouvianta

•Debateonenvironmentaltaxation

l)Pollutiontaxvsregulatorypolicy

2)Greentaxvstradablepermitsystem

3)Environmentaltaxvssubsidypolicy

•Canecologicaltaxesgiverisetotheso-called"doubledividends"?

•Severalissuesinthedesignandadministrationofgreentaxes

•ThedesignofenvironmentaltaxsysteminChina

A.Levyingnewenvironmentaltaxes

B.Reformingthecurrentexciseandresourcelaxsystems.

5.Optimumtaxation

•Introductiontooptimumtaxation

A.James.MirrleesandWilliam.Vickrey

B.Theconceptofoptimumtaxation

C.First-besttaxsystemvssecond-besttaxsystem:adilemma

•Theoriesofoptimaltaxationsystem

A.OptimaltaxationtheoriesofthePredominantSchool

B.OptimaltaxationtheoriesoftheSupply-sideEconomics

C.OptimaltaxationtheoriesofthePublicChoiceSchool

X.Worldtaxreform

本堂课外阅读材料------Furtherreadings:TAXREFORMTRENDSINOECDCOUNTRIES

思考题：

1.WhatistaxandhowtodistinguishbetweenTAXandFEES?

2.Discusstheprinciplesoftaxation.

3.Whatistaxburdenshifting?Andhowtounderstandthenatureoftaxburdenshiftingand

incidence?

4.Pleasemakeabriefcomparisonoftaxstructuresofbothdevelopedanddevelopingnations?

5.HowtomeasuretheequityofTAXATION?

6.Pleaseexpoundthemeritsanddemeritsofincometaxation.

7.Describenewdevelopmentsinmoderntaxationtheoriesandsystems.

8.Discussthemaincharacteristicsofworldtaxreformsincemid1980s.

9.DiscussthemaincontentsandeffectsoftheB2Vreform.

Chapter4.PublicExpenditure

课时：2周，共6课时

教学内容：

I.Definitionofpublicexpenditure

-----Theprocessinwhichfiscalfundsincludingtaxrevenuearearrangedforvariouspublic

uses(Secondstageoffiscaldistribution)

II.Classificationofpublicexpenditure

•Accordingtothefunctionsofthepublicsector

♦Inthelightoftheeconomicnatureofexpenditure

•Inaccordancewiththecompensatorynatureofexpenditure

•Accordingtothelevelof'thepublicsectorwhicharrangesandmanagesexpenditure

HLTheoreticalexplanationtothegrowthofpublicexpenditure

1.Historicalevolutionofpublicexpenditure

OAbsolutescale(sincethe1930s)

ORelativescale(publicexpenditureaspercentofGDP)

2.Theoreticalexplanationtothegrowthofpublicexpenditure

OThelawofrisingpublicexpenditure(A.Wagner)

OThetheoryonreplaceir.ent-effectofpublicexpenditure(Peacock&Wiseman)

OThetheoryongrowthcfpublicexpenditurebystage(P.&R.Musgrave)

OTheLheoryofpublicchoice(J.Buchanan)

IV.Contentsofpublicexpenditure

◎Expenditureforpublicinvestment

◎Expend!tureforscience,educationandculture,andmedicare£health

◎Expenditureforpublicadministration

◎Expenditurefornationaldefense

◎Expenditureforsocialsecurity

◎Expenditurefordiplomaticrelations

V.Principlesofpublicexpenditure

■Efficiency

1.Equilibriumofallocationofresources

2.Input-outputmodelVSCost-benefitanalysis

■Equity

1.Principleofabilitytoreceive

2.Horizontalequity

3.Verticalequity

■Stability-------built-inandartificialstabilizers

VI.Managementofpublicexpenditure

1.Controlofpublicexpenditure

★Restraintheusesofpublicfunds

/Controlthegrowthofpublicadministrationexpenditure

2.Performanceappraisalofpublicexpenditure

★Cost-benefJtanalysis(CBA)

才Minimumexpensechoice(MCC)

★Chargesonpublicservices(CPS)

★Planning-Programming-BudgetingSystem(PPBS)

VII.OptimumofpublicexponditurestructureinChina

1.controltherapidgrowthofexpenditureforpublicadministration

2.ensurethatbasicfundsrequirementforsignificantandmajorpublicinvestmentprojects

shouldbemet

3.Strivingtokeeparisinglevelofexpenditureforscience,education,andculture,andother

publicutilities

4.Furtherimproveexistingsocialsecuritysystem

5.Maintainareasonablelevelofexpenditurefornationaldefense

VOLGovernmentprocurementsystem

1.Definitionofgovernmentprocurementsystem(GPS)-----<ipackageoffiscalarrangementunder

whichgovernmentspurchaseawiderangeofpublicgoods&servicesthroughmarketchannels

2.Evolutionofgovernmentprocurementsystem

•Westerncountries•China

3.Featuresofgovernmentprocurementsystem

・Fairness•publicity•legal•socialresponsibility

4.Contentsofgovernmentprocurementsystem

•lawfulframework•scopeofprocurement•implementationofprocurementprocedure•

managementofprocurementactivities

5.GPSinChina:issuesandfurtherreform

Issues

1)Currentlawfulframeworkisimperfect

2)Drawbacksintheimplementation:lowtransparency;

/ackofpublicityofinformaliondisclosure;

lackoffairness

3)Issuesinaspectofmanagement

lackofhigh-qualityprofessionaltalents;

corruption;

lackofeffectivesupervision&controlofprocurementbudget

lackofeffectiveauditingofprocurementprocess

XFurtherreform

1)Perfecttheexistingrelevantlawsorrules

2)Enhancethepublicityandtransparencyofinformationrelatingtoprocurement

3)Cultivatehigh-qiuilitytalentsforprocurement

思考题：

1.Howtoclassifypublicexpenditure?

2.Describethereasonsforthegrowthofpublicexpenditure.

3.DiscussthesituationsandissuesofgrowthofpublicexpenditureinChina.

4.Whatisgovernmentprocurement?Andhowtotreatthesituationsandissuesofgovernment

procurementsystemofChina?

Chapter5PubIicbudgetsandborrowing

课时：2周，共6课时

教学内容：

I.Definitionofpublicbudget

II.Classificationofpublicbudget

•zero-basebudgetvsincrementbudget

•singlebudgetvsdualisticbudget

•principal,temporary,additionalbudgets

•centralandlocalbudgets/federal,stateandlocalbudgets

III.Procedureofpublicbudgeting

III.Procedureofpublicbudgeting

Xpreparation

j^ratification

^implementation

Xfinalaccountingofrevenueandexpenditures

IV.ReformofPublicbudgetingsystem

1)Improvelegislationforpublicbudgeting

2)Perfectthemechanismforsupervision&controlofpublicbudgeting

3)Harmonizethebudgetaryrelationsacrossgovernmentsatalllevel

V.Publicsectorborrowing

1)Borrowingmoneyfromdomesticbanksthroughoverdraft

2)borrowingmoneyfromthepublicbyissuingbonds

3)Borrowingmoneyfromforeigngovernmentsorfinancialsectors

VI.Publicdebts

1)Definition-----publicsectorborrowing------akindofdebt-financingarrangementunderwhich

thepublicsectorasade9torraisesfundsthroughpublicchannelssuchasissuingbonds

2)Functionsofpublicdebts

・Off-setfiscaldeficit

•raisefundsforgovernment

•stabi1izefinancialmarket-----openmarketoperations

•Instrumentforabalancebetweenaggregatedemandandsupply

3)Burdenofpublicdebts

Isthereanintergenerationalburdenofpublicdebt?

4)Systemofpublicdebts(publicbonds)

・Issuanceofpublicbonds

•scale•method0price•interest

・Circulationofpublicbonds

♦transactioninsideexchange•transactionoutsideexchangedfuturesexchange•buy-back

exchange

■Repaymentofpublicdebts

•Budgetaryappropriation#fiscalsurplus#taxincrease•repaymentofolddebtsthrough

issuingnewbonds•debt-reimbursingfunds

5)Managementofpublicdebts

•domesticdebts

--------determineareasonablescaleofdebts(indicators)

------setupaperfectstructureofdebts

•foreigndebts

6)publicsectorborrowingrequirement(PSBR)

-----scaleofdomesticsocialcapitai

-----thegovernmentalneedforoff-settingdeficit

-----stabilityofmoney-lendingarrangementoffinancialsectors

-----attractivereturnrate

思考题：

1.Howtoclassifypublicbudget?

2.Describepreparationandimplementationandmanagementofpublicbudget.

3.Howtounderstandthefunctionsofpublicdebts?

4.PleasediscussthesituationsandissuesofmanagementofnationaldebtinChina.

5.Whatispublicsectorborrowingrequirement(PSBR)?Anddiscusstheissuesofsuchasystem

inwesterncounties.

Chapter6.FiscalPolicy

课时：2周，共6课时

教学内容：

I.Definitionoffiscalpolicy-----apackageoffiscalsystemandmeasurestakenbythepublic

sectortoachieveexpectedmacro-ormicro-economicobjectivesbywayoftheapplicationof

variousfiscalandtaxationinstruments

II.Crucialelementsforfiscalpolicy

•policyobjectives•policysubjects•policyinstruments

III.Classificationoffiscalpolicy

-----Inthelightofthelevelofthepublicsectorasapolicy-maker

-----Accordingtotheimpactsoffiscalpolicyonaggregatedemand

----Inaccoidancewilhtheeffcclsoffiscalpolicyonaggregatesupply

-----Fromthepointofviewofregulatoryprinciplesoffiscalpolicy

-----Accordingtotheangleofpolicyregulation(aggregateorstructural?)

IV.Applicationoffiscalpolicy

IV.Applicationoffiscalpolicy

1.Fiscalpolicyinrelationtoeconomicstability

progressivetax;fiscalgrant-in-aid

2.Fiscalpolicyinrelationtoemployment

---unemploymentreliefandgrants

3.Fiscalpolicyinrelationtoredistributionofincomeandwealth

-------progressiveincometax;estatetax(IHT);fiscalsubsidyandgrants;transfer

payment,etc.

4.Fiscalpolicyinrelationtoeconomicgrowthandthestandardofliving

--------taxcut;fiscalgrant-in-aid

V.Fiscalandmonetarypolicies:aneffectivemix

1.Distinctionbetweenfiscalandmonetarypolicies

•regulatingscope•regulatingmechanismSpolicyinstruments-policytime-lag

2.Advantagesanddisadvantagesoffiscalandmonetarypolices

---------Advantagesanddisadvantagesofexpansionaryfiscalpolicy

Advantages:1)mayincreaseoutputgrowthintheshortrun;

2)mayhelpsolveshort-runpoliticalproblems;

3)decreasesunemployment;

Disadvantages:1)budgetdeficitworsens;

2)hurtscountry*sablitytoborrowinthefuture;

3)tradedeficitmayincrease;

4)upwardpressureoninterestrate,discouraginggrowth.

---------Advantagesanddisadvantagesofcontractionaryfiscalpolicy

Advantages:l)mayhelpfightinflation;

2)mayallowabetterfiscal/monetarypolicymix;

3)tradedeficitmaydecrease;

4)interestratesmayfall,stimulatinginvestmentand

growthinthelongrun.

Disadavantages:1)risksrecession;

2)increasesunemployment;

3)slowsoutputgrowthintheshortrun;

4)mayhelpcauseshort-runpoliticalproblems.

----------Advantagesanddisadvantagesofexpansionarymonetarypolicy

Adavantages:1)interestratesfall;

2)economymaygrow;

3)decreasesunemployment.

Disadvantages:1)inflationmayworsen;

2)capitaloutflow;

3)tradedeficitmayincre