41
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 most prominent conservative supporters of a universal basic income). I'll assume that this is offered to every adult in the US age 18 and over, expanding ...
20
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 freedom)
Cons of Being Debt Free
Buying things on (interest free) credit can save a little money
Paying for things in installments can match costs to income
...
13
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 Jeremy West: Effects of the Minimum Wage on Employment Dynamics, and The Economist—Destination Unknown: Large Increases in the Minimum Wage Could Have Severe ...
11
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 up in value at the same rate as inflation, about 3.5% a year. After 20 years, it's worth about \$160, but \$160 has the same value now as \$80 did when I ...
10
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 it)
The main takeaway is that government bonds are the safest and most liquid asset. Its existence is necessary for a large number of financial institutions (...
10
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 minimum wage observed that producers choose instead to take a large amount of the cost of minimum wage increases on themselves. The alternatives would be 1) they ...
8
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 what makes you fat, not fat itself. It has been known for a while, at least since the professional sports were invented. Yet the lobby of the enormous sugar ...
8
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 Taxation" by Bernard Salanié (2003, First Edition).
I bet it is still somewhere in the second edition too, but I do not have a copy of it so I don't know in ...
8
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 explicitly pledged to Britain’s banks stood at 456.3 billion pounds ($730 billion) at the end of March, or 31 percent of GDP, the National Audit Office said in a July ...
8
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 economics question/problem. The process itself at the core is physical/biological and that is not what economics studies.
However, question of what policy we can ...
7
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 between demand for labor (for the services sold by workers) and wage (its price), depends on an assumption of a smooth such relation. In turn, such a smooth relation ...
7
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 that the tax effectively increases the price demanders pay and decreases the price suppliers get. Elasticity tells us how demanders and suppliers react to this ...
6
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.
Under this interpretation, the policy recommendation are relevant despite depending on the specification of the SWF, precisely because different decision makers ...
6
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 servicing the debt is 1.5% of GDP. Thus, if the country's GDP grows at a rate of 1.5% then it can afford to service the debt indefinitely without the debt/GDP ratio ...
6
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 patterns. For instance, obesity rates are the highest in the United States at 30.0% (as you mentioned), compared to 14.5% in France and 23.6% in the United ...
6
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 be true, but the science behind it is sketchy, at best. As several others have pointed out, obesity is not well-understood, medically, and it is entirely ...
6
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 on his wage.
In scenario A, labor supply is not affected but labor demand shifts outwards: the tendency should be higher employment and higher equilibrium wage ...
6
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 covers most of the material you need in an interesting and accessible way.
6
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 the US government:
Many believe that this dollar dominance has allowed the United States to live beyond its means, running sizable current account deficits ...
5
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, an UBI would considerably stimulate the economy. The Executive Summary reads:
How would a massive federal spending program like a universal basic income (...
5
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 increase. This was not a result of the minimum wage increase but of the demand increase. I.e. the demand curve moved up and to the right. This caused the ...
5
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 national stock market. Hence, it is generally not a wise move for a fiscal authority to invest public funds (not tied to pension schemes) in broad baskets of ...
5
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 exactly this, for London, for the Netherlands, and for international train travel)
Interchanges are modelled with penalties which cover:
the time taken to move ...
5
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 consumer strictly prefers this package, and (ii) the firm makes positive profits.
1) Your maths are correct: the inequalities are always false when f is increasing ...
5
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, according to the government, of encouraging manufacturers to reduce the sugar content of drinks and reduce portion sizes of added sugar drinks, and so contribute to ...
5
The first order condition for individual $a$ when the price of $y$ equals $p_y(1+t)$ is given by:
$$
\frac{\partial u_a}{\partial y_a} = p_y(1+t) \left(\frac{1}{p_x} \frac{\partial u_a}{\partial x_a} \right)
$$
Rewriting the first order condition for the social equilibrium gives:
$$
\frac{\partial u_a}{\partial y_a} = p_y\left[1 + \left(\frac{p_x}{p_y} \...
4
Summary
Bill Nordhaus has made several significant contributions to the economics of climate change. That's something of an understatement. His contributions are not just in the pricing of carbon; they but span microeconomics, macroeconomics, (econometric and other) modelling, the philosophy of economics, and the economics of innovation.
Modelling
He's been ...
Only top voted, non community-wiki answers of a minimum length are eligible