Imperfect markets and public sector, 5 cr

Many modern governments collect close to 50 % of GDP in taxes, and use this revenue to fund public services. This course analyzes the reasons for the involvement of the public sector in the market economy. Why do markets sometimes fail to promote individual welfare? Should the public sector address issues such as providing insurance against economic shocks, tackling rising inequality, and combating climate change – and how? On the other hand, what are the implications of high taxation for individuals and businesses?