TrainingsMasterEconomicsCoursesAdvanced microeconomics

Master EconomicsUE Advanced microeconomics

Content

To master the fundamentals of the economics of taxation

Course outline :

Foreword

Modern Public Finance : Why advanced ?

  • The dual approach of consumer choice
  • Mechanism Design
  • Welfare economics

Taxation : The conundrum Capital, consumption, income

  • Consumption better than capital (Chamley-Judd)
  • Income better than Consumption (Atkinson-Stiglitz)
  • Capital better than Income (Allais)

Chap 1 Why Taxation

Public Expenditures and Redistribution

How to define inequality

Hardy-Littlewood-Polya Theorem

Progressivity and Inequality : Jackobson Theoerem

Helping the poor

Universal vs targeted benefits

EITC vs NIT

Chap 2 What Taxes

Firms vs Households

How to defend the corporate tax ?

Globalization and the Destination Based Cash Flow Tax (Devereux Auerbach)

Capital vs Labor (Human Capital)

Capital : Income vs Stock ; Inheritance or Wealth

Income vs Consumption

Chap 3 First best taxation

The second theorem of Welfare Economics

The curse of talented people

Examples of first best taxes : Pigouvian and Land taxes (The Henry Georges theorem)

The Diamond Mirrlees Production efficiency Lemma : The foundation of VAT

Chap 4 Second best taxation and the efficiency cost of taxation

Substitution vs Income effect

The measure of the deadweight loss with the surplus measures

Changes in behavior, labor, saving, risk-taking

Changes in equilibrium and pass through

Partial Equilibrium (competitive vs non-competitive environment)

General Equilibrium (Haberger)

Dupuit’s Approximation formula and the marginal cost of public fund

Chap 5 Social Objectives

Social Welfare functions and Social welfare weights/ Rawls Vs Utilitarianism

Non Welfarist view-points

The Saez Stancheva generalization

Justice in taxation : The equal sacrifice

Chap 6 Ramsey Taxation

The inverse elasticity rule

Generalizations

The Scope of the Atkinson-Stiglitz Theorem

Chap 7 Capital taxation

The Chamley-Judd result (Straub and Werning result)

The Overlapping generation framework and positive result

The Piketty-Saez approach

Chap 8 Optimal Non-Linear Taxation : Analytics

From Mirrlees to Saez

The formulation as a Mechanism design pb

The principle of taxation

The Spence-Mirrlees condition as as sorting condition

Derivation of the pb as the solution of a optimal control pb

Bunching

The small perturbation approach

The ETRI as the sufficient statistics

Chap 9 Applications of the Optimal Non-linear taxation

The ABC formula

The optimal top tax rate

EITC vs NIT

Chap 10 On the research frontier

Nudge, behavioral economics and optimal tax results

More than 1 heterogeneity parameter

Optimal tax in an open economy

Optimal tax and Job search

Language used

Main language used by this course: Anglais.

Bibliography

  • A Mas Collel, M Whinston and J Green : Microeconomic Theory OUP.
  • J. Mirrlees, Reforming the Tax System for the 21st Century – The Mirrlees Review, Oxford University Press, 2010 (An Accurate Encyclopedia about taxation, many references there up to 2010)
  • B. Salanié, Théorie économique de la fiscalité, Economica, 2002 (The Economics of Taxation, MIT Press, 2003) (A compact version of mainly optimal taxation a bit outdated)

+ the papers listed in the reference list of each chapter since 2010

Volume of teachings

  • Lectures: 24 hours

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