The British philosopher and mathematician Bertrand Russell wrote, "Change is one thing, progress is another." In this Ninth edition, we continue to make substantive changes that reflect progress made in the field of public finance. Yet we have been careful to stay focused on the central mission of the book, which is to explain as clearly as possible how the tools of economics can be used to analyze government expenditure and tax policies.

The field of public finance is constantly developing. There are new applications of experimental and quasi-experimental techniques to measure the impact of public policies, and there are new insights provided by fundamental economic theory into the roles of government spending and taxation.

This book incorporates recent developments and along the way takes its readers to the frontiers of current research and policy. While the information presented is cutting edge and reflects the work of economists currently active in the field, our approach makes it accessible to undergraduates whose only prior exposure to economics is at the introductory level.

Each chapter of this Ninth edition has something new. Rather than provide a long list of changes, we will instead highlight some of the key innovations.

NEW WORLDS TO EXPLORE

Financial Crisis Coverage

The current generation of students will long remember the financial crisis of 2008 and 2009. Some commentators believe that government policies toward housing may have contributed to the crisis, and at various places throughout the book, we discuss these arguments. For example, the political economy chapter (Chapter 6) discusses some of the consequences when financial firms are operated privately but their debt is, in effect, viewed as backed by the federal government. Similarly, Chapters 5, 15, and 18 highlight examples of how the government subsidized housing, possibly contributing to overconsumption in this sector.

Expanded Climate Change Coverage

We have expanded our coverage of climate change policy. For example, the chapter on externalities (Chapter 5) includes a new discussion focusing on the choice between a carbon tax and a cap-and-trade program to regulate greenhouse gases. The cost-benefit analysis chapter (Chapter 8) discusses how the choice of a discount rate dramatically affects the scale of the policies needed to deal efficiently with the challenges of climate change.

Health Care

The chapter on government and the market for health care (Chapter 10) expands considerably the material on reform options. It now includes a discussion of the individual mandate program recently instituted in the state of Massachusetts, as well as a new discussion of international experiences with single-payer health care systems.

Current Issues

The chapters on the US Revenue System (Part V)—especially Chapter 17 on the personal income tax—provide numerous updates on tax policies stemming from recent legislation and from proposals made by President Obama.

Expanded End-of-Chapter Material

We have also expanded the discussion questions at the end of each chapter, in order to provide students with further opportunities to master the tools of public finance.

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UP-TO-DATE TOOLS AND SUPPLEMENTS

Animated PowerPoint Slides

The Ninth edition includes revised, in-depth, comprehensive PowerPoint slides with animated graphs and figures that appear as if drawn line-by-line to clarify difficult concepts for students.

Test Bank

Public Finance has been known for its strong, rigorous test bank questions, and the Ninth edition continues this tradition. The test bank has been expertly updated to reflect the cutting-edge changes in the text. New questions in every chapter provide additional opportunities to test student knowledge.

Instructor's Manual

Like the test bank, the instructor's manual has been updated in both content and structure for superb content correlation and for ease of use.

Online Learning Center www.mhhe.com/rosen9e

In the Online Learning Center, students can access PowerPoint slides and interesting Web links, while instructors can also access a downloadable version of the Instructor's Manual and the Test Bank.

All of the changes in this Ninth edition were made to further our goal of providing students with a clear and coherent view of the role of government spending and taxation. Our years of policy experience have convinced us that modern public finance provides a practical and invaluable framework for thinking about policy issues. In this textbook, we have tried to do just what we did when we worked in Washington—to emphasize the links between sound economics and the analysis of real-world policy problems.

Harvey S. Rosen and Ted Gayer