Ec101: Links for 14th November, 2019

Four of one today, and one of the other.

 

  1. “In their new book, The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay, economists Emmanuel Saez and Gabriel Zucman challenge seemingly every fundamental element of conventional tax policy analysis. Given the attention the book has generated, it is worth stepping back and considering their sweeping critique of conventional wisdom. Spoiler: My goal here is to present these issues, not resolve them.”
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    William G. Gale on the public economics topic du jour, tax policy as per Saez and Zucman.
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  2. “I find this episode appalling, and I hope The New York Times is properly upset at having been “had.”#TheGreatForgetting”
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    Strong language from Prof. Cowen is an underrated signal by definition. He is less than happy about this article.
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  3. A Twitter thread that only econ nerds should read – but econ nerds really should read it.
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  4. And finally, another post about it from MR.
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    “”This is quite remarkable. If the sensible way of defining tax rates involves excluding transfers from the denominator (as they claim), the fact that it leads to very high rates by construction at the bottom should be because this is a sensible summary of reality. Yet, in their own words, it’s a problem. Rather than switching method, they drop the people at the very bottom which conveniently covers up the problem (but leaves a less severe version of the problem in their remaining lower income sample). Of course, they could have just used the standard definition which includes transfers in the denominator, but doing this destroys the entire headline result.”
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  5. And because we can all have more than our fair share of public economics and taxes, here’s Gulzar Natarajan wondering aloud, as he puts it, about the Indian economy.
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    “”Therefore public spending has to be tailored to maximise the boost to consumption and investment. In other words, it should seek to target instruments with the highest fiscal multipliers and target population or consumption groups with the highest marginal propensity to consume.”

EC101: Links for 11th July, 2019

  1. “The two approaches reflect different attitudes toward risk, the role of government and collective social responsibility. Analogous to America’s debate over health insurance, the American philosophy has been to make more resilient buildings an individual choice, not a government mandate.”
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    Risk, how (not) to measure it and therefore understand it. As Taleb is fond of saying, “The absence of evidence is not the evidence of absence”.
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  2. “Is it possible that interest rates are a net input cost in the Indian context? This existential monetary question is yet to be even acknowledged by economists, let alone addressed.”
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    A superb (and I use the word advisedly) overview of monetary policy and how it works in India.
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  3. “I would challenge my students at the start of the new semester with the following three questions; 1) how much does it cost you to go to the beach (we lived in a coastal city)? 2) should Tiger Woods mow his own lawn? or 3) should Lebron and Kobie go to college?”
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    Opportunity costs, economic costs and accounting costs – all in one article, and therefore a great read.
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  4. “The cornerstone of Harvard professor N. Gregory Mankiw’s introductory economics textbook, Principles of Economics, is a synthesis of economic thought into Ten Principles of Economics (listed in the first table below). A quick perusal of these will likely affirm the reader’s suspicions that synthesizing economic thought into Ten Principles is no easy task, and may even lead the reader to suspect that the subtlety and concision required are not to be found in the pen of N. Gregory Mankiw.”
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    A hilarious (but perhaps only to an economist) take on the ten principles of economics.
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  5. “And the long version of the history is crucial here. It shows that for much of the 20th century, total taxes on the very wealthy were much higher than they are now. Before World War II, the average rate hovered around 70 percent. From the mid-1940s through the mid-1970s, the average rate was above 50 percent.”
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    David Leonhardt on taxing the rich in America. His newsletter is worth subscribing to, by the way.

Links for 10th May, 2019

  1. “Thus in his famous 1969 paper “Information and Efficiency-Another viewpoint” (reprinted in his The Organization of Economic Activity, vol.2, Blackwell, 1988), Harold coined the notion of the “nirvana fallacy” in criticising Kenneth Arrow’s claim using the Arrow-Debreu framework (in his Economic Welfare and the Allocation of Resources for Invention) that with ‘market failure’, government intervention could make markets more efficient. Demsetz argued that this assumed a perfect government whilst failing to consider if the actual intervention could be perfect. “Those who adopt the nirvana viewpoint seek to discover discrepancies between the ideal and the real and if discrepancies are found, they deduce the real is inefficient.”
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    Deepak Lal on the passing of two economists, one of whom I am enjoying reading more of these days.
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  2. “So while Spotify might get the better of Apple in this particular fight, it’s no angel. Its excessive collection of user data forced its CEO to apologize after a consumer backlash in 2015. It is one of several targets of a complaint under Europe’s stringent new GDPR data privacy rules. And let’s not forget that its own business model tends toward market dominance. An antitrust victory in the battle with Apple would be welcome for Spotify shareholders; for suffering musicians it would mean far less.”
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    If you have been following the Spotify – Apple debate/drama about Apple taking a 30% cut  – this is an article that does a good job of arguing both sides of the story.
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  3. “What is the best way to protect and restore this public commons? Most of the proposals to change platform companies rely on either antitrust law or regulatory action. I propose a different solution. Instead of banning the current business model — in which platform companies harvest user information to sell targeted digital ads — new legislation could establish a tax that would encourage platform companies to shift toward a healthier, more traditional model.”
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    A Pigouvian solution to a modern day problem?
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  4. “But Mr. Munger was there to talk about anything on his mind, which is just about everything. His favorite activity, he says, is figuring out “what works and what doesn’t and why.””
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    Anything that helps you understand how Charlie Munger thinks is worth a read. Clicking through tot hat link will give you a full transcript of the interview, and I’d recommend you do so.
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  5. “Preventing an impact is possible — theoretically. Humans need only change the asteroid’s velocity by a few centimeters per second; over the course of several orbits around the sun, that change adds up to push the rock fully in front of or behind the Earth. But the proposed methods for deflection are expensive and untested.”
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    Not that I mean to get your weekend off to a bad start