This course seeks to enable participants to understand the world views and tool boxes that economists bring to the study of the economy and its role in human activity, to know how to employ the work of economists when specialist knowledge and technique of this kind is called for in public administration and policy, and to appreciate both the strengths and weaknesses of this influential discipline.

Participants will develop an understanding of the merits and the limitations of economics in the collective domain and the ability to use positive ("objective") and normative ("subjective") models to guide efficient and effective government decision-making.

Topics to be covered include:

• The Nature of Economics, Economic Thinking and Government
• The Nature of Markets: how do markets work? How well do markets work?
• Theory of Market Failure: do markets go wrong?
• Theory of Collective Failure: does government go wrong?
• Government, Productivity and Growth: how does government influence productivity and growth?
• Macroeconomics: what determines overall economic activity in an economy?
• International and Global Economics: how does a national economy link to the world?

Five in-class multiple choice exams (10% each); final exam (50%)

This course is incompatible with POGO8016 The Economic Way of Thinking I and/or POGO8019 The Economic Way of Thinking II, POGO8060 Economic Concepts or POGO8064 Government in a Market Economy

Joshua Gans, Stephen King, Robin Stonecash and N. Gregory Mankiw, Principles of Economics, Thompson, Southbank, Vic, 2003 (second edition)