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 ...
- 57.7k
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 ...
- 6,246
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 ...
- 6,246
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 ...
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 ...
- 887
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 ...
- 8,168
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, ...
- 8,611
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, ...
- 8,574
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:
$$
\frac{\partial u_a}{\partial y_a} = p_y(1+t) \left(\frac{1}{p_x} \frac{\partial u_a}{\partial x_a} \...
- 12.5k
5
votes
Accepted
How can I show convexity of this value function?
Suppose that $u(C,l)=\sqrt{C}-l^2$ and $f(l,A)=\big(l+g(A)\big)^2$, where $g$ is any function of $A$ that is not convex.
Then $$u\big(f(l,A),l\big)=l+g(A)-l^2.$$
The optimal labor supply is given by $...
- 13.5k
4
votes
Why is capital income taxed differently than wage income?
There are two main reason for the difference in tax rates that I see from the literature.
First, some papers argue that the optimal tax rate on capital is zero. This is the famous "Chamley-Judd" ...
- 6,246
4
votes
Does the 2nd welfare theorem involve government intervention?
The second welfare theorem does not necessarily involve a government as such. It does not matter for the theorem who redistributes the resources. Nevertheless, in practice this will most likely often ...
- 6,246
3
votes
Can a progressive marginal taxation be regressive in terms of average tax rate?
$$
\frac{\partial\frac{T(Y)}{Y}}{\partial Y}= \frac{T'(Y)}{Y} - \frac{T(Y)}{Y^2}
$$
This can only be smaller than 0 if
$$ T'(Y) < \frac{T(Y)}{Y} $$
In other words, the marginal tax rate needs ...
- 1,325
3
votes
Accepted
Contest game: second order condition satisfied, but negative profits?
Well it says in the paper on p. 423:
"Thus the sufficiency assumption implies a unique pure strategy equilibrium. And if the sufficiency assumption is violated, at least one player will receive a ...
- 2,373
3
votes
Is my logic on taxation for this question legit?
It depends on whether all the tickets are sold or not. If sold out, all the the tax burden is borne by the buyers. If not, then it's shared.
If sold out, buyers pay all the tax.
If all 39,000 ...
- 1,109
3
votes
Accepted
Effect of changing Non Labor Income on Consumption-Leisure problem
This has to do with the form of the utility function. Assume instead that,say, we had
$$U(c,l) = c^{1/2} - \frac{1}{2}l^2$$
Does now $R$ affect the labor-supplied decision?
Solve it and explore. ...
- 33.9k
3
votes
Accepted
Equity-efficiency tradeoff examples
Publicly funded healthcare and social welfare schemes typically serve redistributive functions and therefore can be considered as promoting equity (among the well-off and the poor). At the same time, ...
- 15.8k
3
votes
Unions, right to work laws
For the googling part of your question:
In the context of US labor politics, "right-to-work laws" refers to
state laws that prohibit union security agreements between companies
and labor unions....
- 29.6k
3
votes
Accepted
The optimal tax rate
It does determine the optimum tax rate when the weighted average elasticity is constant.
If $e (1-\tau) = \frac{1-\tau}{z} \frac{dZ}{d(1-\tau)} = e$ there is no issue, because then regardless of a tax ...
- 57.7k
3
votes
Accepted
How can I formulate the following optimization problem?
If you want to determine how much carbon dioxide should be omitted by solving an optimization problem, then a constraint on the quantity of $CO_2$ isn't quite what you need. The normal constraint on ...
- 8,574
3
votes
Accepted
Is there a consensus in economics about public housing?
Found a couple on the internet which I didn't read. If you think they're of no use, let me know and I'll take down the answer.
Does public housing reduce housing cost burden among low-income families ...
- 332
2
votes
Simple Sketch of Mirrlees 1971
There is also a good discussion in "Contract Theory" by Bolton and Dewatripont. It is discussed in terms of non-linear pricing in Chapter 2, "Hidden Information and Screening". However, Mirrlees ...
- 9,355
2
votes
Negative expenditures in public budgets
There are several issues here, but the three most significant are:
The National Accounts treatment of the public sector, which is set out in international standards and controlled by the Office for ...
- 4,765
2
votes
Can a spending freeze solve the problem of the Italian enormous government debt?
This question is somewhat political, and runs into the area of “opinion-based,” which this site has to avoid. I am only going to attempt to discuss part of it. There’s some long-running economic ...
- 9,907
2
votes
"The citizens know their own utility functions better than the politicians"
Free to Choose by the 1976 Nobel Prize winner Milton Friedman.
You can hear the arguments directly from Friedman in this ten part video.
- 941
2
votes
Why is the USA not capable to pay its debt?
Fizz gave a great answer. I also wanted to add a little to the original question.
The US has no incentive to pay back its debts!
The US dollar is used as a major global Forex reserve. This helps to ...
- 21
2
votes
Accepted
Aggregating in a Continuum
To obtain $\frac{\partial y}{\partial z_n}=0$, you implicitly assume that each consumer takes its own skill level as given. And in such a case, in reality the consumer optimizes with respect to labor ...
- 33.9k
2
votes
price floor and price ceiling
If the price ceiling is above equilibrium price, then the market would just settle for the equilibrium price, and the price ceiling would have no effect. Same thing for price floors: if the price ...
- 15.8k
2
votes
Accepted
Show that this income tax is effectively a lump sum tax
A lump sum tax is a tax which only has an income effect, it has the equivalent effect of reducing the agent's wealth. In particular, it has no substitution effect, it does not incentivise the agent to ...
- 68
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