Students of this subject will acquire knowledge and understanding in the following four areas.
I. STATE INTERVENTION
. Knowledge of the variety of situations in which the free market leads to inefficient outcomes or a socially unacceptable distribution of wealth or resources, paving the way for an economic justification for state intervention.
. Understanding of possibilities and difficulties associated with state intervention: public goods, externalities, asymmetric information, and redistribution.
II. SOCIAL CHOICE
. Awareness of the fundamental difficulties in any attempt to aggregate individual preferences for public or collective decisions.
. Familiarity with how to reconcile the idea of economic efficiency and distributional equity in spite these difficulties.
III. INCIDENCE, EFFICIENCY AND EQUITY IN THE TAX SYSTEM
. Acquaintance with the idea that the tax burden does not necessarily falls on the economic agent liable to pay the tax.
. Awareness that any tax policy that alters the economic activities¿ relative prices results in the impoverishment of the economy. Awareness that the distorting change in their behavior that involves a welfare loss is known as the excess burden.
. Ability to analyze the excess burden in three basic cases: the choice of a consumer good or service versus all other goods, the choice between consumption and leisure, and the choice in an inter-temporal consumption model.
IV. FISCAL SYSTEM STRUCTURE AND THE IDEA BEHIND ¿LA REFORMA FISCAL¿.
. Knowledge of the structure and the basic problems plaguing the income tax of individuals, corporation tax, contributions to social security tax, and value-added tax and inheritance transfers.
. Knowledge of the basic ideas on fiscal decentralization.
. Knowledge of the basic economic ideas that are envisaged under the banner of "Tax Reform".
This knowledge and understanding will be complemented by the following skills:
. Ability to analyze the design of the tax system.
. Ability to defend and justify personal beliefs on public economics and the tax system.
. Ability to maintain a critical and analytical perspective and to distinguish between the positive and normative elements of political debate.