Friday, September 11, 2020

Public Economics in times of COVID-19

Next week I start a new edition of a graduate course on Public Economics that I have been teaching in the last few years. It is a 10 session (2 hours per session) course in the Master of Economics and Business Administration (MEBA) of the Autonomous University of Barcelona. This is a training (not research) 1 year Master’s program with students coming from all over the world with a diversity of backgrounds. Although this time we’ll have less students than usual due to the difficult travel conditions and fears, it seems there are enough students to start again, using a classroom big enough to keep social distance (or using virtual tools if the pandemic gets worse again).

The experience of the pandemic has made me think about adapting the content and the methodology of the course to what we are learning in the present times.

The course is structured around three blocks: welfare economics, social choice and behavioral economics. In the first part, the more traditional one, we discuss the role of different mechanisms of resource allocation, the two welfare theorems and related results such as the Coase theorem and the theory of the second best. The second part covers the main tools and models of political economy and why when markets are imperfect, we cannot just hope that governments will perfectly fix problems. (These two parts sound very theoretical, but we discuss empirical applications and policy issues related to these theories).The third part introduces students to the relevance of psychological issues in the economic analysis of public policies.

I will start this time by showing students the graphs in the article by Bowles and Carlin about market, state and communities, and their relevance in the current pandemic. In political economy, we’ll reflect about how populism changes the assumptions (or not) of the median voter theorem and how the pandemic may affect the interaction between politics and economics. In the behavioral part, I will try to discuss how the article by Raj Chetty in the American Economic Review on a pragmatic approach to public policies (combining traditional tools and behavioral tools) can be adapted to COVID-19 debates. 

Beyond the Chetty article, I will probably keep the article by Svensson on Eight Questions about Corruption in the Journal of Economic Perspectives, and the Nobel prize lecture by Elinor Ostrom, but I will introduce the article by Herrmann et al. on Public Good experiments (and ask students to replicate the results and do related experiments following one of the empirical projects in CORE), and the debate about Randomized Control Trials between Banerjee/Duflo and Deaton.

In terms of methodology, I will try to use as many of the technological tools I have access to for example through Moodle or Teams, in order to create debates, chats, have online meetings and tutorials. My concern here is that these tools will be used only by the most enthusiastic students, so I will think of strategies to have these more enthusiastic students helping me to involve the others. 

Ideas are very welcome.

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