St. Francis College – Fall 2011
ECO-3334-01 & FIN-3334-01 Government Finance
Instructor: Dr. Julio Huato
Office: SFC 7005 (access through the 6th floor)
Office Hours: M 1PM-3PM; W 1PM-3PM
Office: (718) 489-5331
Video clips:

Catalogue Description: Government Finance: A study of government budgets and the budgetary process. The role of federal, state, and local governments in production and the provision of Social Security. The economic impact of alternative expenditure on income distribution. The impact of government borrowing on financial markets. (3 credits.)

Prerequisites: ECO 3331/FIN 301 Principles of Finance and MAT 109 Mathematics for Managerial Science I.

Required textbook: Harvey S. Rosen, Public Finance, McGraw-Hill Irwin, 2005. (Used copies are fine.)

Students should bring a calculator to each class and follow the instructor’s numerical examples on their own.

Course Objectives: Help students acquire a reasonable understanding of the following concepts and principles:

  1. economic coordination, efficiency, and equity
  2. market failures, public goods, and externalities,
  3. public spending theory,
  4. social cost-benefit analysis,
  5. taxation theory, and
  6. current relevant issues of public finance.

Course Rubric: A detailed description of the instructor’s criteria (and expectations) in evaluating student performance (exams, assignments, class participation, etc.) in the course can be found here:

Grading and Other Policies: The final score (0-100) will be determined by the following grading formula: Final Score = (Midterm Exam × .18) + (Team Presentation × .18) + (Final Comprehensive Exam × .38) + (Assignments × .16) + (Class Participation × .10)

Final score Grade Quality points
95-100 A 4.00
90-94.9 A- 3.67
85-89.9 B+ 3.33
80-84.9 B 3.00
75-79.9 B- 2.67
70-74.9 C+ 2.33
65-69.9 C 2.00
60-64.9 C- 1.67
55-59.9 D 1.00
Below 55 F 0.00

Four or more unjustified absences — consecutive or not — will lead to an F. Letting the professor know or explaining the professor verbally the reason for an absence is appreciated, but does not mean that the absence is justified. Absences are only justified if a serious personal accident or illness, or death in the immediate family, is involved and properly documented.

Attendance after roll call count as Late. 3 Lates = 1 Absence. Students abandoning the classroom in the middle of a class will be counted as Absent. Frequent movement in and out of the classroom, sleeping in class, inattentive behavior, or leaving before the class ends will count as Absent.

No make-up exams or extra credit assignments will be granted. Exception will be made at the discretion of the instructor if a serious accident or illness, or death in the family is properly documented. Class participation is assessed on the basis of quality (participation that enriches the learning experience of the class), and not only of quantity.

At the discretion of the instructor, participation in the events organized by the Economic Society and O.D.E. (Omicron Delta Epsilon), the International Honor Society in Economics, during the “Activity Hours” will count as class participation or as extra credit. Extra credit work is “curved” at the end of the semester and cannot have a weight in the final score exceeding 10%.

Cell phones, PDAs, and laptop computers must always be turned off during class, unless the professor instructs otherwise. Use of cell phones and PDAs is prohibited during tests. Students should bring a regular calculator to the exam. Students without a calculator in a test will do the calculations by hand.

Students are expected to be honest and forthright in their academic endeavors. Students are encouraged to work together in solving the quizzes and assignments. But plagiarism or cheating in any test will lead to failure (F) in the course.

Course Outline:

Item (lectures) [textbook chapters]

  1. Introduction, microeconomics review, welfare economics (4) [Appendix, 3]
  2. Public goods, externalities, political economy (4) [4, 5, 6]
  3. Theory of public spending: education, health care, Social Security, equity (3) [7, 9-10, 11, 12-13]
  4. Social cost-benefit analysis (2) [8]
  5. Theory of taxation (2) [14-16]

Lectures: 14

Student presentations (5 teams): Suggested topics

(Submit team list and suggested topic by Tuesday October 4, 2011.  The topic has to be approved by me.)

  1. Debt crisis vs. unemployment crisis?
  2. Social Security
  3. State and local public finances
  4. Equity vs. efficiency
  5. Public debt and financial markets

Sessions: 5

Total: 19 sessions. A midterm exam, the pre- and post-exam reviews will consume the remaining sessions of the semester. Keep in mind that these are estimates of the time required. We will adapt to circumstances.

Students with Disabilities: If you need course adaptation or accommodations because of a documented disability, please make an appointment during my office hours.

Disclaimer: If any stipulation in this syllabus contradicts the official policies of the college, the college’s policies will prevail.

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Public goods exercise sheet:

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