Principles of Public Finance

Toshihiro Ihori is a professor of economics at the National Gradual Institute for Policy Studies and a professor emeritus of The University of Tokyo. He has a B.A. and an M.A. from The University of Tokyo and a Ph.D. in economics from Johns Hopkins University. His major field of research is public economics. Details are at the web site of the National Gradual Institute for Policy Studies.

• Chapter 1. Public Finance and a Review of Basic Concepts.- 1 The Main Functions of the Public Sector.-  2 A Review of Analytical Basic Concepts.- 3 The Public Sector in Japan.- 4 Organization of the Book.-  Appendix: Japan's Fiscal Management.- References.- Questions.- Part I Macroeconomic Aspects of Public Finance.- Chapter 2 The Macroeconomic Theory of Fiscal Policy I.- 1 The Simple Keynesian Model.- 2 The IS/LM Analysis.- 3 The Open Economy.- 4 The Efficacy of Fiscal Policy and the Policy Maker.- Appendix: Public Investment in Japan.-  References.- Keywords.- Questions.- Chapter 3 The Macroeconomic Theory of Fiscal Policy II.- 1 The Permanent Level of Fiscal Variables.- 2 Consumption and Saving Behavior.- 3 The Labor Market and Supply Function.- 4 Equilibrium in the Goods Market.- 5 The Effect of Fiscal Policy.- 6 Evaluation of the Public Sector.- Appendix: The Size of Government Spending and the Private Sector's Evaluation.-  References.-  Keywords.-  Questions.-  Chapter 4 Public Debt.- 1 Ricard's Neutrality Theorem.- 2 The Shift of the Burden to Future Generations.- 3 Barro's Neutrality.- 4 Policy Implications of the Debt Neutrality Theorem.- 5 The Non-Keynesian Effect.- Appendix: Government Debt in a Overlapping Generations Model.- References.-  Keywords.-  Questions.- Chapter 5 Economic Growth and Fiscal Policy.- 1 A Simple Growth Model.- 2 Optimal Public Investment.- 3 The Solow Model.- 4 The Endogenous Growth Model.- 5 Inequality and Economic Growth.- Appendix A: Taxes on Capital Accumulation and Economic Growth.- Appendix B: Supply-Side Effect of Public Investment in Japan.-  References.- Keywords.- Questions.-  Chapter 6 Fiscal Management.- 1 Understanding Fiscal Management.- 2 Fiscal Bankruptcy.- 3 Fiscal Consolidation.- Appendix: Fiscal Deficits in a Growing Economy.- References.-  Keywords.- Questions.- Chapter 7 The Public Pension.- 1 Justification of the Public Pension.- 2 Economic effect of the Public Pension.- 3 Public Debt and the Public Pension.-  4 Public Pension Reform.- 5 Privatization of the Pay-as-you-go System.- Appendix A: Intergenerational Conflict in an Aging Japan.- Appendix B: Simulation Analysis in an Aging Japan.- Conclusion.- References.- Keywords.- Questions.- Part II Microeconomic Aspects of Public Finance.-  Chapter 8 The Theory of Taxation.- 1 Taxation and Labor Supply.- 2 The Efficiency of Taxation.- 3 Interest Income Tax and Saving.- 4 Investment and Tax.- 5 Consumption Tax.- Appendix: The Savings Elasticity Controversy.-  References.- Keywords.- Questions.- Chapter 9 Tax Reform.- 1 Labor Income Tax and Interest Income Tax.- 2 The Theory of Optimal Taxation.- 3 The Theory of Tax Reform.-  4 General Consumption Tax and Labor Income Tax.- 5 The Timing Effect of Taxation.- 6 Simulation Analysis of Tax Reform.- Appendix A: Optimal Taxation in an Overlapping Generations Economy.- Appendix B: Tax Reform within Lump Sum Taxes.- References.- Keywords.- Questions.- Chapter 10 Income Redistribution.- 1 Progressive Income Tax.- 2 Endogenous Labor Supply.- 3 The Optimal Income Tax.- 4 Nonlinear Income Tax.-  5 Economic Constraint and Redistribution.- Appendix: Optimal Linear Income Tax.-  References.- Keywords.- Questions.- Chapter 11 The Theory of Public Goods.- 1 Public Goods.- 2 Optimal Provision of Public Goods: The Samuelson Rule.- 3 The Theory of Public Good Provision: the Nash Equilibrium Approach.- 4 The Theoretical Analysis of Public Goods: the Lindahl Equilibrium.- 5 The Free Rider Problem.- 6 The Neutrality Theorem of Public Goods.- Appendix: Public Bads, Growth, and Welfare.- References.- Keywords.- Questions.- Chapter 12 Public Spending and the Political Process.- 1 The Failure of Government.- 2 The Voting Model.- 3 The Voting Model and Reality.-  4 Political Parties and Fiscal Policy.- 5 Theoretical Model of the Partisan Business Cycle.- 6 Further Comments.- Appendix A: Fiscal Privileges,Consolidation Attempts and Pigouvian Taxes.- Appendix B: Political Factors and Public Investment Policy in Japan.- References.-  Keywords.- Questions.- Chapter 13 Local Public Finance.- 1 Intergovernmental Finance.- 2 The Supply of Local Public Goods.- 3 Tax Competition.- 4 The Time Consistency of a Tax Policy.- 5 The Principle of Local Tax.- 6 Redistribution among Local Governments.- 7 Further Issues on Intergovernmental Finance.- Appendix: Analytical Model of Central and Local Governments in Japan.- References.- Keywords.- Questions.- Index.