EconoSpeak

In my last post, I questioned Kevin Hassett’s claim that transfer pricing manipulation was responsible for half of our trade deficit and asked what was the paper he referenced. We have the text of his speech: There is another important factor to consider when thinking about how these changes will affect the economy. A recent NBER working paper (Guvenen, Mataloni, Raisser and Ruhl 2017) argues that profit shifting by large multinational firms causes part of their economic activity to be...

Scott Greenberg provided a nice summary of what section 936 was and how its expiration had contributed to Puerto Rico’s economic and fiscal difficulties: beginning in 1976, section 936 of the tax code granted U.S. corporations a tax exemption from income originating from U.S. territories. In addition to section 936, the Puerto Rican corporate tax code gave significant incentives for U.S. corporations to locate subsidiaries on the island. Puerto Rican tax law allowed a subsidiary more the...

This is a Sveriges Bank Prize in Economic Science in Memory of Alfred Nobel that I should approve of unequivocally, and I do approve of it.  Dick Thaler has long been known to be on the list of likely recipients since at least when Daniel Kahneman shared it with Vernon Smith back in 2002, although I sort of thought the award just a few years ago for Robert Shiller would put Thaler's off a bit.  Nevertheless, I approve of behavioral economics, so I was mistaken not see another award being...

Mozi: scholar and activist How do we think about the obligation of social justice?  The dominant American political culture is based on individualist values: you have a right to do whatever you want, and the main problem is how to prevent you and other rights-bearing individuals from getting in each other’s way.  Without extra considerations, social justice in such a universe is a matter of taste and inclination, which is to say charity.  You offer help to others when you feel like...

Howard Gleckman does: It is true that bringing US corporate rates in line with our trading partners may reduce incentives for improper transfer pricing. But there is a flaw in Hassett’s argument: While these practices are aimed at reducing tax lability, they do not represent real economic activity. And limiting income shifting won’t significantly increase domestic employment. He was noting this presentation: Kevin Hassett, chair of President Trump’s Council of Economic Advisers, argued...

Because like the neo-fascist Lombard League of northern Italy, they are a rich region of a nation that does not want their money going to the poorer regions of that nation.  That is it. Sorry, this is not about language suppression or  anything else.  Catalalunya/Catalonia achieved autonomy on education, health, and local law enforcement a long time ago.  The only thing they lack is all that money they are sending to the rest of Spain.Yes, they will probably get to keep their money in the...

We wish to extend our thoughts and prayers to the victims of those who have died or been injured by Hurricanes Harvey, Irma,  and Maria and to their families and friends [for real, rest is satire].  Needless to say, this means that this is not the time to discuss changing current policies regarding climate change.  Our president has decided to withdraw the US from the Paris Climate Accord, the Director of the EPA has ordered removal from all agency websites of any mention of climate change...

Credit to Matthew Yglesias for his discussion of the incompetence of Donald Trump as well as the excuses for it from his defenders including: Officials have also cited the Posse Comitatus Act as a complicating factor that helps explain why Trump was so much slower to dispatch assistance to Puerto Rico than the Obama administration was to send help to Haiti after it was devastated by an earthquake in 2010. Except this 1878 Congressional Act does not bar the President from calling in the...

Buried on the back pages of this busy week has been the news that in Iraqi Kurdistan on Monday there was a referendum on independence reportedly supported by 92% of the voters.  I imagine that is not inaccurate, and that there was strong support for this referendum, even as Kurdistan Regional Government (KRG) President Massoud Barzani says that it is only advisory and a prelude to negotiations with the central Iraqi government.  As it is, this vote is not being treated as such, and there has...

Yes, for a period of time, according to some sources, I was a member of the "Kaldorian" school of Post Keynesian  economic thought, although I had not previously thought of myself as such, indeed, had been unaware that there even was such a school of economic thought.  But now, according to such sources, I am no longer a member of such a school.  Indeed, it is not clear that there even is such a school, if there ever was.  This is a tale of the ongoing tangle of schools of Post Keynesian...