A solutions manual for all 582 exercises in the second edition of Intermediate Public Economics. A solutions manual for all 582 exercises in the second edition of Intermediate Public Economics.

A new edition of a comprehensive text, updated throughout, with new material on behavioral economics, international taxation, cost-benefit analysis, and the economics of climate policy. Public economics studies how government taxing and spending activities affect the economy—economic efficiency and the distribution of income and wealth. This comprehensive text on public economics covers the core topics of market failure and taxation as well as recent developments in both policy and the academic literature. It is unique not only in its broad scope but in its balance between public finance and public choice and its combination of theory and relevant empirical evidence. The book covers the theory and methodology of public economics; presents a historical and theoretical overview of the public sector; and discusses such topics as departures from efficiency (including imperfect competition and asymmetric information), issues in political economy, equity, taxation, fiscal federalism, and tax competition among independent jurisdictions. Suggestions for further reading, from classic papers to recent research, appear in each chapter, as do exercises. The mathematics has been kept to a minimum without sacrificing intellectual rigor; the book remains analytical rather than discursive. This second edition has been thoroughly updated throughout. It offers new chapters on behavioral economics, limits to redistribution, international taxation, cost-benefit analysis, and the economics of climate policy. Additional exercises have been added and many sections revised in response to advice from readers of the first edition.

This solutions manual for Intermediate Public Economics (MIT Press, 2006) offersstudents an opportunity to practice using the analytical tools of public economics at intermediateand more advanced levels. The 424 exercises in the textbook (all of which are covered in thesolutions manual) vary widely in nature and difficulty; some involve reflection on the models usedand the discussion of assumptions and conclusions, while others work through general arguments inthe text using specific functional forms. Several require the use of data to test theoreticalpredictions. The more challenging exercises explore and extend the material in the text. The Manualgives complete solutions to the analytical questions and provides guidance to the major points inthe discussion problems, occasionally extending the discussion to related issues. In answers to theexercises analyzing data, the authors have kept the econometrics simple both in the estimationpackage employed and in the level of econometric sophistication. All regressions equations have beencomputed using Microsoft Excel. Advanced students can employ a wider range of test statistics andconduct appropriate integration tests on time series data. Professors and students will find thisbook an important resource for their work with the textbook.

A comprehensive introduction to contract theory, emphasizing common themes and methodologies as well as applications in key areas. Despite the vast research literature on topics relating to contract theory, only a few of the field's core ideas are covered in microeconomics textbooks. This long-awaited book fills the need for a comprehensive textbook on contract theory suitable for use at the graduate and advanced undergraduate levels. It covers the areas of agency theory, information economics, and organization theory, highlighting common themes and methodologies and presenting the main ideas in an accessible way. It also presents many applications in all areas of economics, especially labor economics, industrial organization, and corporate finance. The book emphasizes applications rather than general theorems while providing self-contained, intuitive treatment of the simple models analyzed. In this way, it can also serve as a reference for researchers interested in building contract-theoretic models in applied contexts.The book covers all the major topics in contract theory taught in most graduate courses. It begins by discussing such basic ideas in incentive and information theory as screening, signaling, and moral hazard. Subsequent sections treat multilateral contracting with private information or hidden actions, covering auction theory, bilateral trade under private information, and the theory of the internal organization of firms; long-term contracts with private information or hidden actions; and incomplete contracts, the theory of ownership and control, and contracting with externalities. Each chapter ends with a guide to the relevant literature. Exercises appear in a separate chapter at the end of the book.