research
Paper: Macroeconomic Effects from Government Purchases and Taxes
In September, Harvard economists Robert Barro and Charles Redlick published a working paper titled: Macroeconomic Effects from Government Purchases and Taxes. The paper looks at past economic data in order to develop a multiplier for government expenditures. Their research found for defense spending, the multiplier was 0.6-0.7–until the unemployment rate reach 12%, at which time it [...]
Paper: What are the Effects of Fiscal Policy Shocks
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Andrew Mountford and Harald Uhlig recently released a working paper called, What are the Effects of Fiscal Policy Shocks. The paper looks at the affects of various fiscal policies on GDP, which is an important topic given the current Congressional debate on the need for further stimulus spending.
The three were: deficit spending; [...]
Paper: Optimal Taxation in Theory and Practice
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Harvard economists N. Gregory Mankiw, Matthew Weinzierl, and Danny Yagan recently published a paper which looked at the “interplay between tax theory and tax policy.” It rightly shows that there is a wide dichotomy between the tax theories proposed by academic economists and what is actually implemented in Washington and the state capitals. The authors [...]
Tax Expenditures and Business Cycle Fluctuations
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Most experts agree the cause of the current economic downturn—the bursting of the housing bubble in 2007. Some economists argue the creation of the bubble was the result of government intervention in the housing market, e.g. low interest rates, support of Fannie Mae and Freddie Mac, and through the tax code with the [...]
Combating Global Climate Change: Why a Carbon Tax is a Better Response to Global Warming than Cap and Trade
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This non-technical paper provides some straightforward arguments against the current legislative proposal to reduce carbon emissions via cap and trade. The two authors believe global-warming is a serious problem and carbon emissions need to be addressed—but cap and trade legislation is not the way to do it. Their proposal is for the federal [...]
The Effect of the Federal Cigarette Tax Increase on State Revenue
Abstract:
Today the federal cigarette tax will rise from 39 cents to $1.01 per pack. The proceeds will help fund expansion of the federal State Children’s Health Insurance program. This program provides federal matching funds to states to assist them in providing health insurance to families and children. The SCHIP program is targeted at families [...]
Economic Analysis in Judicial Decision Making – An Assessment Based on Judge Posner's Tax Decisions
Abstract:
In recent years, many of the most vocal proponents of law and economics have been appointed to the bench, including Richard Posner, Guido Calabresi, and Frank Easterbrook. They have been strong advocates of the judicial use of economic analysis as a tool to help decide cases. This paper explores the ways in [...]
The Value of Tax Shields IS Equal to the Present Value of Tax Shields
Abstract:
In a recent paper, Fernandez (2004) argues that the present value effect of the tax saving on debt cannot be calculated as simply the present value of the tax shields associated with interest. This contradicts standard results in the literature. It implies that, even though the capital market is complete, value-additivity is violated. As a [...]
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