The course surveys the theory of economic stabilization and the impact of government revenue and taxes on the level of economic activity. At the conclusion of this course the students will be able to analyze market failure and the need for government intervention in the economy.

Basic spending units that are form public sector and their financing balances, macroeconomic effects of consolidated budget deficits, public sector borrowing, optimal financing of public sector deficit in the context of seigniorage and taxation, maintainability of budget deficits are studied.