Public Economic Theory

Abstract

Understanding the role of the government in the economy is a question of fundamental importance. For decades, modern public economists have been working to provide answers as they relate to how society taxes, spends, distributes, regulates and stabilizes its economic systems. To a great extent, this research has been driven by contemporary policy issues. The resulting stream of practical, real-world research has yielded great dividends both to the polity and the academy. Unfortunately, the very success of applied and especially empirical public economics has tended to push more theoretical work to the periphery of the field. As a consequence, the theoretical and applied agendas in public economics have become increasingly distinct. At the same time, important advances in areas such as evolution, game theory, and experimental economics have been slow to work their way into the mainstream of public economic theory. Thus, we see growing gaps between theoretical public economics both with applied public economics and pure economic theory. The main objective of the Journal of Public Economic Theory is to help bridge these two gaps. Strengthening the connection between public economics and modern theoretical research is probably the easier of the two. To this end, the Journal will actively promote the development and dissemination of new theoretical tools and techniques in the field. We will make every effort to develop a reputation as an outlet for theorists seeking to demonstrate and explore the direct economic applications of their work. We believe it is equally important to demonstrate that theory can make significant contributions to the current policy debate. Consider, for example, the interplay between theoretical and empirical work in the controversies surrounding rational expectations or the impact of game theory on the structuring of the recent spectrum auctions. When theory is cut off from the applied side of a field, it runs the risk of beginning to feed upon itself and of becoming less and less relevant to applied researchers and the outside world. By the same token, when empiricists pay attention only to the data and previous empirical work, they risk missing new JPET 98038