Customer Reviews

Public Finance and Public Policy

5 star:		(5)
4 star:		(2)
3 star:		(1)
2 star:		(1)
1 star:		(1)

 

 

An excellent textbook for an upper level course for economics majors. There is a lot of inertia in textbook choice, but I was finally convinced to adopt Gruber's book when I served as the Lecturer for Stanford University's upper-level seminar in Public Economics. The textbook has high production values and of particular note is its timeliness in covering both current policy issues (Social Security Reform, Fundamental Tax Reform, Education, etc.) and current public economics research (Political Economy, Behavioral Economics, Contract Theory, etc). Most textbooks on the market offer a very dated view of Public Economics, especially in terms of current research. The book explains the findings using intuition and graphs, but provides mathematical detail in mathematical supplements for the ambitious reader. The accompanying website also provides impressive PowerPoint slides. The student response to the textbook was uniformly positive.

The only downsides are the hefty price tag, worsened by the limited secondary market, and for those who want a more mathematically rigorous treatment in courses that require calculus and optimization, the included supplements were helpful, but still limited.

I found this book through MIT's Open Courseware, it is an excellent read if you like the textbook style. The author does not seem to be bent on pushing one economic approach and explains the topics in a common sense manner.

I used this to teach a class. Not many decent public finance/public economics books out there, but this one did the trick for an undergraduate class.

I bought a copy of the text for an Economic Public Finance course requiring the use of the 3rd edition to cut back on costs. When I compared this text to the 3rd edition, there were only a few differences that I noticed-

- Discussion questions had a few differences (Re-arranged, numbers changed slightly, ect)
- Charts and figures in the 3rd edition had more recent information (especially relevant in chapters 21-25)
- Chapter on Social Security had another (small) section in it.

If you need this textbook for a class but do not need the discussion questions, I would recommend this textbook over the newer one. There is virtually no difference between the two. If you need the updated charts and graphs from the newer edition, most of them are available in the PowerPoint presentations on the publisher's website.

This text provides a good combination of real-world examples and mathematical justification for the economic decisions made by governments (particularly the US government).

I had ordered a book and there was an issue with the shipment, but it was quickly resolved by them. They were very understanding and it didn't cost me anything to have the problem resolved. i was very satisfied by how they handled this problem, and i would gladly order books from them again!

I purchased this book for my Public Economics Class and the professor uses this book as a supplement to his lectures. I think this book does a good job in explaining the concepts. I did find a few errors in the book though.

The book came in great condition and quickly!

This book has wet part, it is not good quality for such price. I was very upset when all the damage was not listed.

Chapter 1, Section 1. Political Obfuscation

Believe it or not it starts with politics on page one. The author begins by giving his account of the 2008 financial panic and the subsequent political reaction. This whole two page explanation is riddled with what I consider to be lies and purposeful distortions. At first, i gave him the benefit of the doubt in that he may have been trying to simplify the given reactions and interventions, but this is doesn't hold up towards the end of the several paragraphs.

First, he says that the issue divided the politicians straight down party lines and that the republicans were resistant to the bailouts and that the democrats had pushed for large interventions. He wrongly credits the Obama administration and congress for passing the initial 787 billion dollar stimulus. He says that the bill was passed by a, "Strong Democratic Congress and the newly elected President Obama." "The final stimulus," had more Democratic influence. I find this to be a lie because it was passed in September 2008 and anyone who was paying attention would know that September comes before November and even if it didn't Obama would not be getting credit until the end of January when he took office. He quotes Harry Reid, "Our entire country will suffer and the world will suffer."

He takes a quote from John McCain way out of context. the quote is this, "We're laying out multi trillions of dollars of debt on future generations of Americans. I cannot support such a thing." We all know that McCain flew home from the campaign trail to vote FOR the bill. My estimation is that this quote was taken, not only after the election, but about a different bailout; Obama's $800bn dollar program. The author is lying and selecting false and misleading quotations.

He then says that the public had a 59% approval rating of the passage of the bill, an un cited statistic. My question here is, if the congress didn't pass it and had to be threatened and coarsed (as well know they were) to pass it and the people wanted it so badly, why was the congressional approval rating in the single digits immediately after the passage of the bill?

I submit, this has been written firmly to plant false ideas and progression of events in naive readers. The intended result is to further polarize the economic understanding of those inclined towards education and the public sector (something they don't need any more of!)

Chapter 1, Section 4. Something For the Whole Family



Here the author discusses the merits of, you guessed it, Flu Vaccinations. He starts by saying there are 45 million Americans without health insurance. He says that people who do not take flu shot increase the risk of contaminating others. This carries more negative externalities in the form of causing a rise in medical costs and, because the author is a professor, students grades drop. These are not argument that anyone would make using verbal logic.

-If i get my flu shot i do decrease the risk of others getting it, assuming i am around people who do not have the vaccine, but i do not cause a rise in medical costs in general. After all, if I don't get my vaccine then i do not consume a unit of it. This technically will drop the price because I'm leaving my unit on the market for others, effectively ensuring that the market is +1 unit no matter what because i am not buying one. Costs lower here.

-My flu shot has nothing to do with other students grades, regardless of the complications of externalities. This is not an economic argument that one would make with verbal logic. His logic says that by my getting a flu shot that other's school performance would rise and would lower the costs associated. He is supposedly an economist, are we not considering correlation and causation? (the author uses the technique of leading questions, meaning in a court one could object to almost every premise.)

The bulk of these pages were written as evidence that mandatory vaccines are beneficial and perfectly "rational." Economics says so.

The definition of a negative externality (from the book): "When a decision imposes on others costs that I don't bear."



Chapter 11, Section 1. Productivity through



In this section the author intends to confuse and distort the economic distinctions between wealth creation and wage distribution. This is the worst of all in my opinion. He thinks that since the public funds education system that the public must receive (tangible) benefits in return...dangerous stuff we get into this book.

The story is about Stacy, who goes to college, gets a higher education and therefore, becomes more productive in the workforce. (It should be pointed out that this chapter is about "Education and Productivity" and from the perspective of teachers) A.K.A. a more productive teacher.

Right away the author says "...higher standard of living that comes with increased productivity." But right after this he changes means to the end. "However, this higher standard of living is not an externality if the worker is the only one who reaps the benefit from her higher productivity." He goes on, "For example, if more education raises Stacy's Marginal Product of Labor (MPL) but the increase is fully reflected in her receiving a higher wage from her employer, then there is no positive externality to society from Stacey's education."

-Her education need not 'benefit' anyone but her. It looks like this is an example of a negative externality for paying taxes, no?

The positive externalites he manages to make up are: a. - She encourages others to work harder (haha not likely) and b. The government can tax her in a higher bracket...

This is naked Marxism.



If we think of Stacy as a table maker (something tangibly productive) and she goes to college and becomes more productive at making tables, IE. less materials, less time, etc., then we would say that the marginal cost (MC) of producing the tables have dropped. This allows the seller to sell for less. This encourages more people to buy the tables as a new market has open up, the lower price market, and as more and more people accumulate tables in their houses (something they would not stockpile or buy repeatedly; Diminishing Returns) this is the wealth that is being added to society. When more people have the 'luxury of the table', does that not constitute a raised standard of living? The author overlooks the fact that you do not increase wealth in society by buying things, you increase it by creating them. Therefore, wealth is created while you are working and being paid in wages. Wages (or consumption) show where productivity is further desired by society.

Since when is an 'increase in productivity' NOT mean wealth creation? Her working harder (improving efficiency) DOES add wealth to society.



The book also stresses the difference in EQUITY AND EFFICIENCY. I find this, also, to be a misnomer. TIME IS MONEY. I do not expect equitable results from a project that i put no effort, time, labor, or money into.



Chapter 11, Section 2. Active and Informed Voters

P.293 - Citizenship (Public Education) The author suggests "State funds" be used to encourage "Informed and active voters" in the form of public schools. He is at this point literally calling for the education of immigrants in public schools so that they may be "INFORMED AND ACTIVE VOTERS." He says this will, "improve the democratic process" and is "fairly compelling."

i am starting to get mad.

Later on P. 293 Failure to maximize FAMILY UTILITY. The author implies that parents may not know the right 'level' of education to provide for their child. He looks at the parents concerns for present consumption vs. the child's future income. (when deciding on a money level for education). In other words, the author assumes that parents aren't smart enough or responsible enough to make these decision, but the government econometricians sure do! He overlooks the quantity mechanism of having too many degrees in the job market diluting each others value.

I am a student at the University of Michigan. And having studied this book for our public finance class, I would say that the author can actually trim the book to 40% of its current length. If you are good at math, thinks rationally, and have some common sense of how the world works or should work then you can reach the same conclusions without reading the book.

A lot of the material is simply common sense. It talks about what the best public policy is for governments, why there is corruption, best form of education management...etc. However, if you find a smart friend and have a rigorous debate with him/her about government (like what most college students do nowadays) you can easily come to the same conclusion. Then put what you come up with into a very succinct math equation and you would have learned the entire material on your own.

Seriously, as an aspiring Micro theorist/Financial economist, this stuff is a joke. The book actually devotes four pages to a discussion of what corruption is and how it works in the government. Prof. Gruber could seriously shorten that to a page in succinct form. The student's opportunity costs should be considered!

The problem with this book is that it assumes that 1. you have no common sense. 2. you are horrendous at math, and thus irrational. 3. Long, run-on sentences will not bore you to sleep.

Go study micro and macro theory, have a solid understanding of it, read the news regularly, think, and this material will come to you naturally. The book is only good for mentioning important research papers and names which will aid the student in his thought. Beyond that, it is largely useless. Anyone can find the statistical content on their own.