From October 11, 2018: Worthy Reads
Worthy Reads from Equitable Growth:
I remember debating Columbia is Glenn Hubbard in Houston about the inheritance tax a few years ago. He claimed that the cultural and educational transmission of wealth from him to his children was more important then inheritance, hence there should be no inheritance taxes. That argument did not seem to make sense to me. And it now looks as though his initial claim that inheritance was less important was wrong: Elisabeth Jacobs and Liz Hipple: Are Today’s Inequalities Limiting Tomorrow’s Opportunities?: “An individual’s place on the economic distribution is supposed to reflect individual effort and talent, not parental resources and privilege. Yet this perspective ignores the mounting evidence of the myriad ways that poverty and economic inequality foreclose equality of opportunity...
I have never understood why the other justices on the Supreme Court do not differ to Justice Breyer on antitrust issues. They really ought to. They do not: Howard Shelanski and Michael Kades: Competitive Edge: Judge Kavanaugh-Would he increase the divide between the public and judicial debate over antitrust enforcement?: "Over the past decade, the Supreme Court has, with one exception that we discuss below, followed a path of reduced enforcement, reflected in decisions weakening prohibitions against vertical restraints...
Our Gabriel Zucman Is getting a very welcome increasing share of global attention for his very important tax haven work. His is a research team very much worth supporting an expanding: Matt O’Brien: Inequality is worse than we know. The super-rich really do avoid a lot of taxes: "On the legal end of the spectrum... companies shift their profits to show up in low-tax jurisdictions.... According to Berkeley economist Gabriel Zucman and his co-researchers... as much as 40 percent of all multinational profits and 50 percent of U.S. ones...
As Hal Varian of Google and Berkeley said a decade ago, the right solution to the housing finance crisis was for everybody in the United States to default on their mortgage and move one house to the right. The policies pursued by the Obama administration wound up being very effective at rescuing banks and their shareholders, option holders, and executives, keeping them from experiencing financial harm. They proved totally ineffective at helping homeowners in distress: Corey Husak: How Not To Help Distressed Mortgage Borrowers: Evidence From The Great Recession In The United States: "The federal government has been criticized by many for failing to provide adequate assistance to U.S. homeowners who were financially devastated by the housing crisis and subsequent Great Recession and its aftermath in the late 2000s. New evidence suggests that even when assistance was given, it was poorly designed...
We do not have to have a society in which the most important economic decision you make in your life is your choice of parents: Lily Batchelder: The “Silver Spoon” Tax: How to Strengthen Wealth Transfer Taxation: "30 percent of the correlation between parent and child incomes—and more than 50 percent of the correlation between the wealth of parents and the wealth of their children— is attributable to financial inheritances. This is more than the impact of IQ, personality, and schooling combined...
Worthy Reads Elsewhere:
Yes, if we give employers a powerful incentive to build the human capital of their workers they will do so. No, it does not appear possible to get there. The Obama administration was uninterested in creating a federal reserve that would see a truly high-pressure economy as an opportunity rather than a threat. And the Trump administration is simply confused: Karl Smith: @karlbykarlsmith: “Meh. Turn demand up to 11, watch gap solve itself...” Noah Smith: @Noahpinion: “YESSSSS...” : Joe Nocera: How to Turn a Community College into an Economic Engine: "Bridging the skills gap starts with a conversation between community colleges and employers...
Get your increased industrial concentration and market power here. There is something wrong with the press corps when a merger is spun as increasing efficiency first. There may be efficiencies. Those efficiencies are not why this merger is being pursued: Reuters: CVS, Aetna Win U.S. Approval for $69 Billion Merger: "Pharmacy chain CVS Health Corp (CVS.N) won U.S. antitrust approval for its $69 billion acquisition of health insurer Aetna Inc (AET.N), the Justice Department said on Wednesday...
Mark Thoma continues to be the best aggregator of interesting mainstream economics on the internet...
Back in the George W. Bush administration Dan Froomkin (whom I have known well since he was five) provided, daily, not just all the news coming out of the White House—sifting all the wheat from the immense volume of chaff—but also placed it in perspective. The Washington Post canned the feature because it made their White House correspondents' pieces look like the beat sweeteners they were. Now he is back. I hope he can hit the sweet spot again: Dan Froomkin: White House Watch...
This seems to me to be too strong: there is every reason to think that the financial crisis could have been handled in a way that built a successful firewall between Wall Street distress and unemployment: Martin Wolf: How To Avoid the Next Financial Crisis: “The proximate explanations for the huge shortfalls in output were collapses in investment.... This weak investment must also help explain low rates of innovation, which is particularly visible in directly-hit countries. New technology is often embodied in new equipment...
This gets the essence of the Trump administration right: Jeffrey Frankel: The New and Not Improved NAFTA: "US President Donald Trump has called the United States-Mexico-Canada Agreement, which succeeds NAFTA, 'the single greatest agreement ever signed'. In reality, it is not as good as the Trans-Pacific Partnership, from which Trump withdrew The U.S.... While this outcome is better than an end to free trade in North America, the USMCA is no improvement over the status quo.Of course, this is Trump’s modus operandi: threaten to do something catastrophic, so people are relieved when things get only a little bit worse...
The Trump administration loses its most competent cabinet level official: Dan Drezner: Assessing Nikki Haley: "Haley... had two traits that made her unusual within the Trump foreign policy team. The first is that she was a professional politician... able to send messages to key constituencies, pleasing the Trump White House at times and other groups at other junctures...
I do hope this discussion forum succeeds. But whether it does or not is in our hands: Paul Krugman: @paulkrugman: "The American Economic Association has a new discussion forum set up by Olivier Blanchard. First up is the question of whether low interest rates are leading to excessive risk-taking https://www.aeaweb.org/forum/311/have-low-interest-rates-led-to-excessive-risk-taking...
The first write-up of the Prisoner's (or is it Prisoners'?) Dilemma: Merrill Flood (1958): Some Experimental Games: "Summary: Two players non-cooperatively choose rows and columns of their payoff matrices in a series of 100 plays of a non-constant sum game. The purpose of this experimental game is to determine which of several theories best describes their behavior. The players, being familiar with zero-sum game theory, happen to choose a poor solution for their non-constant-sum game...
Hal R. Varian: Causal Inference in Economics and Marketing: "This is an elementary introduction to causal inference in economics written for readers familiar with machine learning methods. The critical step in any causal analysis is estimating the counterfactual—a prediction of what would have happened in the absence of the treatment...
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