About Economics: Weekly Update (Vol. 6, No. 20)
 | from Mike Moffatt
School must be out most places because I am getting a lot less panicked e-mails from students needing last minute help. I'm starting to miss hearing from them...
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In the Spotlight |
http://economics.about.com/od/incometaxestaxcuts/a/corporate
I tend to think of the deadweight loss associated with high tax rates being due to substitution effects. However, if you ask an MBA student about why taxes hurt business and the economy, in my experience they will, without fail, give you a story about income effects - if you take money out of the (metaphorical) pockets of business, they will have less resources to invest (and therefore invest less). Having founded and worked in a small business for 3+ years, I am starting to think that the MBA's are correct to emphasis income effects.
| | Air Pollution Externalities and Crime
...The main result of the paper is that changes in childhood lead exposure are responsible for a 56% drop in violent crime in the 1990s... What are those "changes in childhood lead exposure"? Primarily the move to unleaded gasoline, which happened in the US between 1975 and 1985. [Click on the title to read more]
| The 1970s were a horrible period
... "The 1970s were a horrible period. If there's one thing that has to be very high priority, we don't want to go back to a period that is anything like that," she said, critiquing presentations on the economy at a symposium for college students in Tacoma, Washington... "During the 1970s the Fed failed to keep inflation low in the face of supply shocks (which) became incorporated into inflation expectations," Yellen said. [Click on the title to read more]
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