Description
The discipline of economics occupies a central role in the social sciences. Its conclusions are a key reference in public discussions. From a theoretical point of view, however, the foundations of the discipline appear far from being unambiguously established. Its basic prescriptions rest on assumptions which still deserve to be more fully understood and explicitly discussed. The summer school proposes to reexamine a very classic theme in economic thought, the tension between markets and governments, from the perspective of contemporary economic theory. Our starting point will be the conceptual framework which is at the root of standard comparisons between markets and governments: Government interventions can be justified when there are market failures so that potential gains from trade cannot be exhausted. This logic has broad appeal and has been a fundamental reference point in many policy domains. Examples include (i) Market power and antitrust regulation, (ii) Externalities and policies to mitigate climate change (iii) Free-rider problems in public goods provision, or (iv) Equity-efficiency trade-offs in tax design. This approach is indeed biased both in favor of markets and in favor of governments. It is biased in favor of markets because markets are taken to be desirable - unless they are proven to fail. But even if markets work, this does not prove that other mechanisms do no work. It is conceivable that governments work as well. This “In-dubio pro markets” warrants a justification. It is biased in favor of governments because policy intervention are taken to be desirable whenever markets fail. It is conceivable that governments fail as well. Thus, “Governments work when markets fail” also warrants a justification. Recent research on market design and incentive theory puts in question the traditional dichotomy of markets and governments. Markets can be designed in a way that serves distributive objectives, fairness objectives or desires to avoid the use of money as a medium of exchange.
At the same time, market pressures stand in the way when governments seek to reform financial regulation, mitigate climate change or enforce corporate taxation. These policy challenges seem to require a degree of market taming beyond the usual confines of taxation and regulation in market-based economies.
The school aims at offering a critical review of these recent issues. We will alternate traditional lectures by academics who have contributed to different areas of contemporary economic theory, with discussions around the presentation of recently published texts. In particular, the school aims to provide an opportunity to contrast contemporary economic theory with recent developments in political philosophy.
Programme
JUNE 20th: GENERAL EQUILIBRIUM THEORY
- 9:30h-9:50h: Opening
- 9:50h-10:00: Vincenzo Atella (Tor Vergata University) - Welcome Address
- 10:00h-11:30h: Herakles Polemarchakis (Warwick University) - Uninsurable Risk
- 11:30h-11:50h: Coffee break
- 11.50h-13:20h: Gaetano Bloise (Tor Vergata University) - Equilibrium, Welfare and Time
- 13:20h-15:00h: Lunch
- 15:00h-16.30h: Peter Hammond (Warwick University and Stanford University) - Strategy proof Liberalization and Constrained Efficiency with Widespread Externalities
JUNE 21st: THEORY OF INCENTIVES
- 9:30h-10:45h: Claude d’Aspremont (UCL Louvain) - Incentive Compatibility and Mechanism Design
- 10:45h-11:00h: Coffee break
- 11:00h-12:15h: Andrea Attar (CNRS-TSE and Tor Vergata University) - Incentive Theory in Competitive Settings
- 12:15h-14:00h: Lunch
- 14:00h-15:20h: Giacomo Corneo (Free University, Berlin) - Is Capitalism Obsolete? A Journey through Alternative Economic Systems
- 15:20h-15:30h: Coffee break
- 15:30h-16:50h: John Roemer (Yale University) - Notes on How we Cooperate
JUNE 22nd: PUBLIC ECONOMICS
- 10:00h-11:30h: Felix Bierbrauer (University of Cologne) - The Equity-Efficiency-Tradeoff and the Political Economy of Taxation
- 11:30h-11:50h: Coffee break
- 11:50h-13:20h: Maya Eden (Brandeis University) - The Normative Content of Other - Regarding Preferences
- 13:20h-15:00h: Lunch
- 15:00h-16:30h: Jean Charles Rochet (University of Geneve and TSE) - Taxing Financial Transactions
JUNE 23rd: POLITICAL PHILOSOPHY
- 10:00h-11:30h: Simone Sepe (University of Arizona and Toulouse University) - Normative Ethics and Economic Theory
- 11:30h-11:50h: Coffee break
- 11:50h-13:20h: Chiara Cordelli ( University of Chicago) - The Privatized State
- 13:20h-15:20h: Lunch
- 15:00h-16:30h: Daniel Markovits (Yale University) - The Good Life after the Age of Growth
- 16:30h-17:00h: Closing remarks