This text by one of Europe's leading economists covers a wide variety ofpublic economics issues with great clarity and precision, illustrating them with awealth of carefully-chosen examples and problems.Starting from theories of generalequilibrium analysis, Laffont considers issues of market failure, collectivedecisionmaking, and distributional equity. He analyzes the important informationaland motivational problems involved in planning solutions for market failures, andprovides a rigorous justification for the theoretical foundations of publiceconomics.Topics include the theories of externalities, public goods, collectivechoice, consumer surplus, cost-benefit analysis and/or theory of the second best, incomplete markets, and nonconvexities. For each Laffont begins with the classicalfoundations, moves on to consider the topic within a simple model of the economy, and concludes by integrating results from recent journal articles into this simpleframework. In this way students are led to understand the classical tradition in thecontext of modern general equilibrium theory.The book concludes with eight problemswith solutions, each interesting and rich enough to be considered a case study, andnine exercises without solutions; together they provide an excellent review ofmaterial covered in the text. The basic approach in each problem is to set up ageneral equilibrium model, discover the market failure by calculating the unfetteredequilibrium, and develop an explicit planning solution.Jean-Jacques Laffont isProfessor of Economics at the University of Social Sciences at Toulouse.Fundamentals of Economics may be used in either an advanced graduate-level course inpublic economics or in conjunction with a second volume forthcoming by the sameauthor in a course in advanced microeconomics.
- ISBN10 0585134456
- ISBN13 9780585134451
- Publish Date December 1988 (first published 24 March 1988)
- Publish Status Active
- Publish Country GB
- Imprint MIT Press Ltd
- Format eBook
- Language English