Monday , January 18 2021
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Tag Archives: US/Global Economics

Desirable Incentive Effects of Income Taxation II

This is the second post in a series. I will discuss advantages of income taxation different from the obvious advantage that taking from people with high income hurts them less than taking from people with low income. Here again, I will assume that, in equilibrium, income tax is returned to the people who pay it as a lump sum. I do this to focus on the incentive effects of income taxation. In standard models, these effects are undesirable and...

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Rescuing Disposable Time from Oblivion

Two hundred years ago this February, Charles Wentworth Dilke anonymously published a pamphlet titled The Source and Remedy of the National Difficulties, deduced from principles of political economy. Four decades later, Karl Marx would describe the pamphlet in his notes as an “important advance on Ricardo.” In his preface to volume two of Capital, Friedrich Engels described the pamphlet as the “farthest outpost of an entire literature which in the...

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Desirable incentive effects of income taxation I

Cases in which income taxation is preferable to lump sum taxation with the same ex post net transfers. The main reason for progressive taxation is that the welfare cost of taking money from wealthy people is lower, because they have a lower marginal utility of consumption. I would like to discuss other advantages of income taxation, that is cases in which it can cause an increase in money metric welfare, or, in other words cases in which a...

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Jobless claims highest in three months – but seasonality still playing a huge role

Jobless claims highest in three months – but seasonality still playing a huge role On a unadjusted basis, new jobless claims rose by 231,335 to 1,151,015. Seasonally adjusted claims also rose by 181,000 to 965,000. The 4 week moving average rose by 18,250 to 834,250. Here is the close up since the end of July (these numbers were in the range of 5 to 7 million at their worst in early April):  There is now a 2+ month trend of YoY%...

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Scenes from the December jobs report

Scenes from the December jobs report Friday’s December jobs report saw the first decline in employment since the lockdowns of March and April. Let’s take a closer look.As I pointed out Friday, the losses were concentrated in the food and dining (restaurant) and amusement and recreation sectors, both of which are shown below normalized to 100 as of February: The two sectors are down 20% and 30% from their February peaks.By contrast, the leading...

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FDI and the Pandemic

by Joseph Joyce FDI and the Pandemic The fluctuations in portfolio capital flows to emerging markets over the past year have been well documented. But foreign direct investment (FDI) has also plunged in those countries as well as in the advanced economies. Moreover, FDI faces more long-term challenges than other forms of capital flows. In October the Organization of Economic Cooperation and Development (OECD) reported FDI data for the first...

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Programming note

by New Deal democrat Programming note   Four year ago I wrote a valedictory piece about the Obama Administration, and separately wrote of my fears of what the Trump Administration would wreak. Needless to say, especially in light of events of the past week, I intend to do the same retrospective as to Trump and the current state of the GOP and the Republic. Much of what I have to say is in agreement with disparate threads I have read on...

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November JOLTS report shows the renewed impact of the pandemic, partial lockdowns

November JOLTS report shows the renewed impact of the pandemic, partial lockdowns This morning’s JOLTS report for November (remember – a month in which there were total job gains) showed a jobs market recovery that at least paused due to the increasing effects of the out of control pandemic. Hires were up (good), while quits were unchanged, openings declined (bad) and layoffs and discharges rose (bad). While the JOLTS data is a deep dive into...

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November construction spending confirms building surge

November construction spending confirms building surge One of my consistent themes in the past few months has been how the housing market is priming the economy for strong growth in 2021 as soon as the pandemic is brought under control. In that vein, November construction spending surged, confirming what we have already been seeing in housing permits and starts. First of all, here are both total and residential construction spending for the...

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The Wealth of a Nation

— One of Sandwichman’s good questions prompted my revisiting an earlier writing of mine on wealth (circa 2000?). Extensively revised to the extent that it is hardly recognizable; here is, a, second, best effort. Herein, the terms wealth and capital are thought of as being interchangeable. For thousands of years, humans lived off the bounty of nature. Some societies still do, but, today, and for centuries now, most societies have lived...

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