Public economics
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Public economics (or economics of the public sector) is the study of government policy through the lens of economic efficiency and equity.
At its most basic level, public economics provides a framework for thinking about whether or not the government should participate in economic markets and to what extent it should do so. In order to do this, microeconomic theory is utilized to assess whether the private market is likely to provide efficient outcomes in the absence of governmental interference. Inherently, this study involves the analysis of government taxation and expenditures. This subject encompasses a host of topics including market failures, externalities, and the creation and implementation of government policy. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve social welfare.
See also
- Education economics
- Health economics
- Mixed economy
- Public finance
- Rawlsian social welfare function
- Welfare economics
