Public Finance book cover

Public Finance

A Normative Theory

Public Finance remains the premier textbook on the normative theory of government policy, with the third edition propelling into the twenty-first century its examination of what government ought to be doing instead of what it is doing.

The welfare aspects of public economics receive extensively renewed examination in this third edition. With four new chapters and other significant revisions, it presents detailed and comprehensive coverage of theoretical literature, empirical work, environmental issues, social insurance, behavioral economics, and international tax issues. With increased emphasis on the European Union, it is rigid enough for use by PhDs while being accessible to students less well trained in math.

Advanced undergraduate and graduate students studying public finance and public economics, and more broadly welfare economics.

Hardbound, 534 Pages

Published: November 2014

Imprint: Academic Press

ISBN: 978-0-12-415834-4


  • "I have hoped for years that Richard Tresch would revise his Public Finance text.  This volume is well worth the wait.  It is comprehensive, up-to-date, and very clearly written.  It is a natural reading for a graduate course in public finance.  It will also serve as a fine reference for specialists in the field."  --Harvey Rosen, Princeton University, USA


  • Part I: Introduction: The Content and Methodology of Public Sector Theory

    Chapter 1: Introduction to Normative Public Sector Theory

    Chapter 2: A General Equilibrium Model for Public Sector Analysis

    Chapter 3: First-Best and Second-Best Analysis and the Political Economy of
    Public Sector Economics

    Part II: The Theory of Public Expenditures and Taxation-First-Best Analysis

    Chapter 4: The Social Welfare Function in Policy Analysis

    Chapter 5: The Problem of Externalities--An Overview

    Chapter 6: Consumption Externalities

    Chapter 7: Production Externalities

    Chapter 8: Global Warming: An Application of Externality Theory

    Chapter 9: The Theory of Decreasing Cost Production

    Chapter 10: The First-Best Theory of Taxation

    Chapter 11: Applying First-Best Principles of Taxation-What to Tax and How

    Part III: The Theory of Public Expenditures and Taxation: Second-Best Analysis

    Chapter 12: Introduction to Second-Best Analysis

    Chapter 13: The Second-Best Theory of Taxation in One-Consumer Economies
    with Linear Production Technology

    Chapter 14: The Second-Best Theory of Taxation with General Production
    Technologies and Many Consumers

    Chapter 15: Taxation Under Asymmetric Information

    Chapter 16: The Theory and Measurement of Tax Incidence

    Chapter 17: Expenditure Incidence and Economy-Wide Incidence Studies

    Chapter 18: The Second-Best Theory of Public Expenditures: Overview

    Chapter 19: Transfer Payments and Private Information

    Chapter 20: Social Insurance: Medical Care

    Chapter 21: Social Insurance: Social Security

    Chapter 22: Externalities in a Second-Best Environment

    Chapter 23: Decreasing Costs and the Theory of the Second-Best-The Boiteux

    Chapter 24: General Production Rules in a Second-Best Environment

    Chapter 25: Behavioral Public Sector Economics

    Part IV: Fiscal Federalism and International Public Finance

    Chapter 26: Optimal Federalism: Sorting the Functions of Government Within
    the Fiscal Hierarchy

    Chapter 27: Optimal Federalism: The Sorting of People within the Fiscal

    Chapter 28: The Role of Grants-in-Aid in a Federalist System of Governments

    Chapter 29: International Public Finance


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