CityEconomist 

PACE UNIVERSITY
Dyson College of Arts and Sciences
Department of Political Science
Master of Public Administration Program
www.pace.edu/dyson/mpa

PAA 603  - Economics of Government and Non-Profit Organizations

COURSE DESCRIPTION: This course introduces the principles of economics as applied to the government, health care and nonprofit sectors in the United States. The course will provide an analysis of the role of public and nonprofit institutions in the private market economic systems. Special attention will be paid to the interaction of economics and the political process. Special topics to be covered include: public versus private goals, market failure and externalities, supply and demand analysis, public choice theory, macroeconomic stabilization, the public debt, economic development and growth, and special attention to contemporary policy issues facing the nation. The special focus of this course is on how economics can guide government policy decisions, especially those of local governments. Many services, such as health care, is done by nonprofits under government contract or under the supervision of independent boards appointed by state or local government leaders.

COURSE TEXT: William Baumol (NYU) and Alan Blinder (Princeton University), Economics: Principles and Policy (Thomson South-Western, 10th Ed., 2006). The text has a study guide that is recommended but not required. Every chapter in the text will be covered in the final exam except for the last two. GRADING:  Every assignment is graded out of 100 and a weight is applied as follows:
1. Midterm – 20%
2. Final – 30%
3. Weekly Post on Forums 1-12 on Blackboard – 24% The posts should be on the appropriate Forum in the Discussion Board area. In every case, the post should be 50-150 words for Forums 0 and 1, and 100-200 words starting with Forum 2, not counting tables, charts or citation. Each post should have at least one reference other than the text. Posts are due by midnight on Sunday. The first post, Forums 0 and 1, should be completed before midnight, Sunday, September 17.
4. Paper (2000-5000 words, to be posted in Forum 13 by the Final Exam) and class participation – 26%.

For both the weekly posts and the paper, assignments may be posted before any deadline. Posts late by one day lose 5 points. Posts late by more than one day lose 10 points.

PLAGIARISM: As noted in Pace Student Handbooks, you will at a minimum lose a 10-point reduction in your grade, if you do not in your posts and papers: (1) Put quotation marks around direct quotes AND cite as a footnote or endnote or within parentheses the source, including page number. (2) Even if you don’t quote directly, provide the reference from which you used an idea or a fact.

Date                          Topic                                             Chapters

9/11/06         Part I. GETTING ACQUAINTED. What is Economics? The Economy: Myth and Reality.

FORUM 0 (not graded): Please post 50-150 words on your career to date and your expectations for the course.

FORUM 1: 5 years after 9/11/01, how do the 10 important ideas (p. 13) of economics apply to terrorism? Pick one idea and comment on its implications for U.S., NY State or local public policy towards terrorism (50-150 words).        Chapters 1-2

9/18         Scarcity and Choice. Supply and Demand.

FORUM 2:  Milk (pp. 62-65). Check prices during the week for skim, 1%, 2% and whole (4%) milk in one convenience store and one supermarket (do not duplicate any other students’ stores). Post the prices you collect (with store names) and comment on what this might mean for U.S., NY State or local milk-price regulation.           Chapters 3-4.

9/25         Part II. SUPPLY AND DEMAND.

Consumer Choice. Demand and Elasticity.

FORUM 3: How does cross-elasticity of demand (pp. 113-115) help us understand the counterfeiting threat to local businesses? Compare the price of one counterfeit good vs. the genuine item. How should U.S., NY State or local governments respond?                                                     Chapters 5-6

10/9                Production, Inputs, Cost. Output, Price, Profit. Investing in Business.

FORUM 4: The Treasurer of Orange Co., Calif. (his name was Mr. Citron), invested in derivatives and lost $2 billion (p. 186). Should NY State or local government officials be betting in financial markets? Why or why not?             Chapters 7-9

10/16       Part III. MARKETS AND THE PRICE SYSTEM.

Perfect Competition. Monopoly. Oligopoly. Regulation and Anti-Trust.

FORUM 5: Taxes on pollution are better for society than subsidies for pollution control (pp. 196, 210). Are U.S., NY State or local subsidies for installing solar energy panels different? Why or why not?             Chapters 10-13

10/23       Part IV. THE VIRTUES AND LIMITATIONS OF MARKETS The Case for Free Markets I. The Shortcomings of Free Markets.

FORUM 6: Canada has imposed price ceilings on certain health-care fees (pp. 308, 323, 326-327). Has this kept down the rise in health spending per capita? What lessons do you draw from this for containing U.S., NY State or local health-care costs?             Chapters 14-15

10/30    Mid-Term, covering Chapters 1-15     

11/6         The Case for Free Markets II. Externalities. Taxation.

FORUM 7: Pres. George W Bush enacted tax cuts on inheritances and wealthy individuals in 2001 and 2003 (pp. 376, 390). But Mayor Mike Bloomberg was raising property taxes in NYC. Comment on the impact on NY area taxpayers or lower Federal taxes and higher NY State or local taxes.             16-18 

11/13       Part V. THE DISTRIBUTION OF INCOME Pricing Factors of Production. Labor. Poverty.

FORUM 8: The Bush tax cuts (p. 442). Why do you think (1) A democratic majority elects/re-elects someone who cuts taxes primarily for a wealthy minority? (2) Wealthy candidates do well in elections?  Do you think these patterns in the NYC area improve or detract from (1) general economic prospects and (2) prospects for the area poor?              19-21

11/20       Part VI. THE MACROECONOMY: AGGREGATE SUPPLY AND DEMAND Intro to Macro. Goals of Macro Policy. Economic Growth.

FORUM 9: Why does college tuition keep rising faster than inflation (p. 510, 522, 523)? Do you have any ideas for making Pace University more productive? What would a more efficient university or professional school look like?             22-24

11/27                Aggregate Demand and the Consumer. Unemployment and/or Inflation.

FORUM 10: Why was inflation low while the economy boomed in the second half of the 1990s (pp. 576, 591)? Could these conditions reverse during the next few years? How and why?    25-27

12/4         Part VII. FISCAL AND MONETARY POLICY Fiscal Policy. Money and the Banking System. Monetary Policy.

FORUM 11: Why are banks heavily regulated nationally (p. 616) while insurance companies and hedge funds are not? What does the NY State Superintendent of Banks do that Federal regulators do not? 28-30

12/11                Monetary v. Fiscal Policy. Budget Deficits. Inflation v. Unemployment. PART VIII. THE UNITED STATES IN THE WORLD ECONOMY International Trade and Comparative Advantage

FORUM 12: Should U.S. fiscal policy be rules-based (pp. 668-669)? What about a NY state or local fiscal policies? How do local fiscal issues differ from U.S. ones? Answer with reference to NY State, NY City, Westchester County or a locality.             31-34

12/18       Final Exam, covering Chapters 1-34