41
votes
Accepted
Is a universal basic income possible in the United States?
This is a good question. To be concrete, I think it's easier to pick a single number - this is arbitrary, but I'll go with the figure of $10,000 offered in the proposal by Charles Murray (one of the ...
- 3,712
20
votes
Accepted
What benefits do governments receive from not eliminating debt?
Most of the same considerations apply to countries as apply to businesses and people, plus a couple of extra cons
Pros of Being Debt Free
No interest payments
Not beholden to someone else (financial ...
- 1,428
13
votes
Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?
Isaac Sorkin, a grad student at Michigan, has addressed this. Here is Miles Kimball blogging it, Isaac Sorkin: Don't Be Too Reassured by Small Short-Run Effects of the Minimum Wage, Jonathan Meer and ...
- 2,167
11
votes
Why is capital income taxed differently than wage income?
One reason is the inflationary gain problem. Let me give an example with simple numbers. I make \$100 in income and pay 20% tax of \$20. I have \$80 left, which I invest in a stock. The stock goes ...
- 1,152
10
votes
What benefits do governments receive from not eliminating debt?
There is an interesting report that circulated during the Clinton administration, when we predicted we'd pay off all the debt, that I think answers your question. (here's a public radio article about ...
- 474
10
votes
Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?
To the extent that there is an economic explanation for their findings, it's something along the lines of costs of changing prices and employment are large enough relative to the increase in the ...
- 2,006
8
votes
Accepted
Economic policies to decrease obesity (would they be effective?)
Yes, sugar tax!
This is probably as controversial as tobacco tax was back in the days. If you walk through a supermarket, you will find that half of the food section is food full of sugar. Sugar is ...
- 1,661
8
votes
Accepted
Simple Sketch of Mirrlees 1971
You can find a didactic exposition of Mirrlees (1971) -- including derivations of optimal tax schedule formulas for different social welfare and utility function -- in section 4.2 of "The Economics of ...
- 5,167
8
votes
Accepted
Are the figures quoted in this liblabcon's blog post accurate? (topic: UK banks)
Source:- Bankers cost this country £456.3bn in fraud
In the UK, where the government bailed out Royal Bank of Scotland Group Plc (RBS) and Lloyds Banking Group, the total outstanding support ...
- 196
8
votes
Accepted
Is climate change an economic question?
Climate change in itself, its measurement and the fact that it is happening, and modeling its speed or trying to discover its causes (e.g., carbon emissions, methane emissions and so on) is not an ...
- 43.5k
7
votes
Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?
First, we need to assume that the minimum wage is an "effective constraint", i.e. that in the cases examined people are paid the minimum wage. I guess this holds.
Second, the negative relation ...
- 31.9k
7
votes
Is my logic on taxation for this question legit?
The burden of taxation is shared among suppliers and demanders according to the price elasticities of supply and demand. The more elastic side carries less of the tax burden.
To understand this, note ...
- 5,434
6
votes
What benefits do governments receive from not eliminating debt?
Suppose your country holds debt equal to thirty percent of GDP and that the government is obliged to pay interest of five percent per year on that debt. This implies that each year the cost of ...
- 16.6k
6
votes
Policy relevance of the optimal taxation given uncertainty about social welfare specification
Here is an answer based on the following interpretation of the SWF : there is no "true" SWF, but SWFs are observable in principle, they simply represent the preferences of the policy decision maker.
...
- 5,167
6
votes
Economic policies to decrease obesity (would they be effective?)
Pierre Dubois, Rachel Griffith, and Aviv Nevo have a nice and well-executed AER paper where they argue that differences in obesity rates across countries can be due to differences in food consumption ...
- 6,652
6
votes
Economic policies to decrease obesity (would they be effective?)
In any discussion of obesity-related policy, it helps to call out a couple of assumptions:
Assumption: A healthy lifestyle will reduce a person's weight.
Everyone and their brother "knows" this to ...
- 61
6
votes
Accepted
Minimum wage vs wage subsdies
We could distinguish between two kinds of "wage subsidies":
A) The government pays to the firm part of the wage cost, usually social security fees.
B) The government pays to the employee a markup ...
- 31.9k
6
votes
Accepted
What are some good advanced level textbooks on public economics?
The best book in my opinion for your case is definitely Intermediate Public Economics by Jean Hindriks and Gareth D. Myles. It is often used as a standard text for public finance at your level and ...
- 5,434
6
votes
Why is the USA not capable to pay its debt?
The US is in a privileged position of producing a currency that people in other countries want to use (as reserve). There's even a French name for that. Anyway, a result of that is cheap credit for ...
- 3,728
5
votes
Is a universal basic income possible in the United States?
A new report by the Roosevelt Institute answers exactly that using a Keynesian, Stock-Flow-Consistent model calibrated to the US. According to their result, when distributional changes are considered, ...
- 8,477
5
votes
Unemployment and the Minimum Wage---what are the main counter-arguments to Card and Krueger?
No one else has mentioned another possible explanation: that there was an increasing labor shortage in New Jersey at the time of the minimum wage increase. This caused minimum wage employment to ...
- 1,152
5
votes
Accepted
Do countries invest in the country's own stock market?
One example of monetary policy is the Bank of Japan buying the Nikkei as part of its asset purchasing program.
Typically, a substantial share of citizens' wealth is connected to returns of their ...
- 714
5
votes
Why don't public transport networks have more routes to each terminal in order to reduce the number of transfers?
The people who do the planning do explicitly account for the value of time and convenience to transit users. At least, in all the systems I've worked on. (source: I have had jobs where I worked on ...
- 8,012
5
votes
Accepted
Nash equilibrium - mistake in proof of paper?
The objective is to show that, as long as $f'(n\hat\theta)\ne \alpha$, a firm can always engineer a package $(p',\hat\theta')=(p+\Delta p,\hat\theta+\Delta \hat{\theta})$ such that (i) a caring ...
- 877
5
votes
Accepted
Understanding an article in the BMJ about the sugar tax
A little background. The paper relates to a tax (known as the Soft Drinks Industry Levy) introduced by the UK in 2018 on some soft drinks, levied on manufacturers (not consumers), with the aim, ...
- 7,268
5
votes
Accepted
Pigouvian tax with general utility function
The first order condition for individual $a$ when the price of $y$ equals $p_y(1+t)$ is given by:
$$
\frac{\partial u_a}{\partial y_a} = p_y(1+t) \left(\frac{1}{p_x} \frac{\partial u_a}{\partial x_a} \...
- 8,642
5
votes
Accepted
How can I show convexity of this value function?
Suppose that $u(C,l)=\sqrt{C}-l^2$ and $f(l,A)=\big(l+g(A)\big)^2$, where $g$ is any function of $A$ that is not convex.
Then $$u\big(f(l,A),l\big)=l+g(A)-l^2.$$
The optimal labor supply is given by $...
- 9,814
4
votes
Why is capital income taxed differently than wage income?
There are two main reason for the difference in tax rates that I see from the literature.
First, some papers argue that the optimal tax rate on capital is zero. This is the famous "Chamley-Judd" ...
- 5,434
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