FINANCE

Finance

Finance

Introduction

Public finance, commonly referred to as public economics, is the field of economics that examines the role of the government in the economy and the economic consequences of the government's actions. 1 A notable exception to this definition is the study of the government's effects on the business cycle, which is usually considered to be a part of macroeconomics rather than public finance. Public finance is concerned with both positive and normative economic issues. Positive economics is the division of economics that examines the consequences of economic actions and thus includes the development of theory, whereas normative economics brings in value judgments about what should be done to analyses and often gives recommendations for public policy. Normative economic issues, in fact, are discussed and debated more often in the public finance literature than in the literatures of most other fields in economics.

Discussion and Analysis

Public finance, commonly referred to as public economics, is the field of economics that examines the role of the government in the economy and the economic consequences of the government's actions. 1 A notable exception to this definition is the study of the government's effects on the business cycle, which is usually considered to be a part of macroeconomics rather than public finance. Public finance is concerned with both positive and normative economic issues. Positive economics is the division of economics that examines the consequences of economic actions and thus includes the development of theory, whereas normative economics brings in value judgments about what should be done to analyses and often gives recommendations for public policy. Normative economic issues, in fact, are discussed and debated more often in the public finance literature than in the literatures of most other fields in economics.

Public finance covers a wide range of topics, many of which are central to the ...