economics Archives - Page 19 of 50 - Stable Genius Liberal

High Taxes Are Not a Prime Reason for Relocation

The Myth of the Rich Who Flee From Taxes
“It’s very clear that, over all, modest changes in top tax rates do not affect millionaire migration,” he told me this week. “Neither tax increases nor tax cuts on the rich have affected their migration rates.”

The idea that rich people are more concerned about money they pay in taxes rather than the money they make or the services they utilize seems counterintuitive to anyone looking at marginal utility of income at the high end.

No, Marco Rubio, government did not cause the housing crisis

For obvious reasons, this argument is very popular on the right, but there’s precious little to back it up. The core claim can be a bit slippery, but it tends to go something like this: the existence and affordability goals of Fannie Mae and Freddie Mac (the GSEs) and the Community Reinvestment Act (CRA) were a major reason we had a subprime-driven housing bubble and then a crash. The only problem? Pretty much all the evidence on the housing crisis shows that that’s not true.

worth a read.

Disco-era Macroeconomics

People on the right tend to use “Keynesian” to mean “liberal stuff I don’t like”, but aside from that definition, the 70s tell us nothing about the issues we’re discussing right now. You can argue that monetary policy was too loose, that the Fed was too expansionary in 1972 (when Arthur Burns was trying to reelect Richard Nixon) and that it failed to tighten in the face of oil-shock-driven inflation. But again, the idea that this experience has any relevance to expansionary fiscal policy in the face of a liquidity trap is totally bogus.

Worth a read.

Yglesias: the case for a higher minimum wage doesn’t strictly require that there be no disemployment effect

the case for a higher minimum wage doesn’t strictly require that there be no disemployment effect. After all, if you can boost earnings for a huge swathe of low-income Americans at the cost of one guy losing his job that seems like an acceptable price to pay. Two guys? Still acceptable. And so on.

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The haters love to claim that people like me view more demand, more money printing, as the solution to all problems. But of course that’s not true. Aggregate demand won’t solve a problem of low productivity, or inadequate productive capacity, or for that matter extreme inequality due to technology or market power. But it can… Continue reading Untitled

Yglesias: The American economy is simultaneously overregulated and underregulated

The way I would put this is that the American economy is simultaneously overregulated and underregulated. It is much too difficult to get business and occupational licenses…Business licensing is different. “This city has too many restaurants to choose from” is not a real public policy problem, it’s only a problem for incumbent restauranteurs who don’t want to face competition.

In a nutshell, regulations can make sense in the case of information asymmetry and in cases of negative externality. They usually don’t make sense as price controls. And in many cases, business and occupational licenses, taxi medallions, street vendor quotas and the like act as defacto price controls.

The Baffling Economics of Thomas the Tank Engine

The Island of Sodor has a major comparative advantage: the best artificial intelligence researchers in the world. AI research on the Island of Sodor is massively ahead of the rest of the world. The trains on Sodor have been designed to understand natural language, solve problems for themselves, recognize new situations, and even have emotions and personalities.

Worth a read. Follow this over to the Forbes article and read that as well.

The Nordic countries: The next supermodel

The Nordics cluster at the top of league tables of everything from economic competitiveness to social health to happiness. They have avoided both southern Europe’s economic sclerosis and America’s extreme inequality. Development theorists have taken to calling successful modernisation “getting to Denmark”.

Is State Capitalism Winning?

In the age-old contest of economic-growth models, state capitalism has seemed to be gaining the upper hand in recent years. Avatars of liberal capitalism like the United States and the United Kingdom continued to perform anemically in 2012, while many Asian countries, relying on various versions of dirigisme, have not only grown rapidly and steadily over the last several decades, but have also weathered recent economic storms with surprising grace. So, is it time to update the economics textbooks?

Not an easy read, but worth reading.

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Outside that bubble, a fair number of people have noticed that Keynesian economics has performed spectacularly in the crisis — it successfully predicted that deficits wouldn’t drive up interest rates, that monetary expansion wouldn’t be inflationary, that austerity policies in Britain and elsewhere would hit economic growth. And no, don’t tell me that Keynesians predicted… Continue reading Untitled