Public Economics

Rating:
Summary: A solid book
Review: This is a solid treatment of public economic theory as it has developed since the work of Samuelson. The book starts by developing the general equilibrium approach to studying public economics and proceeds to relax assumptions and introduce new ideas. Most big topics in public econ are treated to some extent.

The book is aimed at graduate students or advanced undergrads. For the latter use one would really require supplementary material introducing some major empirical trends in public finance, unless the students have had it already.

The flipside of the breadth of the book is that its depth is limited on some important topics. Naturally different people have different beliefs about the appropriate stress, but incomplete information in particular received nowhere near the treatment it should have. There's some mention, and naturally some comes through in the treatment of optimal taxation, but it's not enough to enable someone to make any sense of the many and important results treating public econ from a mechanism design standpoint, which is a reasonable goal for a book like this. Bayesian equilibrium is not even formally defined. Laffont's text _Fundamentals of Public Economics_ has some more emphasis on this (his _Economics of Information and Uncertainty_ has even more, though not specifically from a public econ perspective). Chapter 6 of Myerson's _Game Theory_ and chapter 7 of Fudenberg & Tirole's _Game Theory_ may be useful supplements also.