Political Economics
This course teaches political economics, a recently-growing area in the field of economics, in which economic theory and game theory are applied to understand political-economic phenomena. The target of this course is undergraduate students who have already learned introductory micro and macro economics and game theory. The coverage of thiis course may be overlapped with Public Choice. But I belive that this course is more inclined to economics than to political science, as compared to the lecture on public choice in this faculty. In particular, my talk will be facused more on the outcome of political decision making rather than its process.
This lecture will cover the following issues after reviewing some basic issues you have studied in the introductory micro economics.
- The invisible hand theorem
- The first and second fundamental theorems of welfare economics
- The first-best world and the second-best world
- The social welfare function
- The paradox of voting and Arrow's impossibility theorem
- The definition of government failure
- The controversy on government failure: Chicago vs. Virginia
- The theory of electoral competition
- The role of campaing promises
- The menu auction model of political contributions
The following books will be useful for the study in this course.
- Persson and Tabellini, Political Economics, MIT Press, 2000.
- Grossman and Helpman, Special Interest Politics, MIT Press, 2001
- Drazen, Political Economy in Macroeconomics, Princeton University Press, 2000
- 小西秀樹，公共選択の経済分析，東京大学出版会（for Japanese students）
