Weekend reading: Tax evasion in the United States edition

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context. Equitable Growth round-up Tax Day 2021 is...

Jonathan Levy’s Ages of American Capitalism: My Second Impression

I finally finished grading and had a chance to read a bit more of Levy’s Ages of American Capitalism. I finished the Age of Capital but still have ages of control and chaos to get through. These may take a while; the closer we get to now the less history interests me. In the meantime, I’ll provide my second impression on the book. See here for the first impression.   As a reminder, Levy is trying write a story of American economic history...

Misleading Baltimore Stats for Celebrating Lax on Crime

In 2020, the City of Baltimore stopped prosecuting "minor charges" such as drug crimes.  The headlines are that 2020 crime "went down a lot" from 2019.  Homicides fell by 13.Not mentioned is that, over a similar time frame (2020 Q1-Q3 vs 2019 Q1-Q3), "Opioid Intoxication Deaths" increased by 48 persons (at an annual rate).  That is an increase of 36 percent, compared to 21 percent for the rest of the state of...

Economics’ race (and other) problems

There’s been much discussion in recent days about Economics’ race problem. Some of what has come out is quite disturbing. I have not said much, but I have listened and thought. Here are a few reflections I want to add. It doesn’t surprise me that the field, as a whole, reflects the ingrained attitudes and practices of the society of which it is part. But there are some features of the discipline that magnify and aggravate the problem. First,...

North Dakota Continuing Claims & Unemployment Benefits

I am back to posting after a bout of Crohn’s disease requiring the removal of my appendix. So North Dakota will join a number of other states and stop using the extra federal money added to unemployment benefits. The thought process in general is that the extra benefits deter people from finding work. Now let’s accept from the start that we can surely find people for whom this is true, and people for whom this is not true. We want some broader...

CPI Inflation Rates, Month-on-Month

Headline vs. Trimmed vs. Sticky Price: Figure 1: Month-on-month annualized inflation rate for CPI-all (black), 16% trimmed (brown), and sticky price (blue). Source: BLS, Cleveland Fed, and Atlanta Fed via FRED, and author’s calculations. Update, 5/13 4:30pm Pacific: Sticky price CPI discussion. Econbrowser post. Trimmed mean CPI discussion.

Labor Force Participation Gaps Between the U.S. and Canada

Am hearing some talk about whether the U.S. labor market can fully recover to its pre-Covid19 levels. Is it possible that a sizeable number of workers with marginal attachment to the workforce decide to remain out of the labor force? For example, this crisis, unlike the one that preceded it, has been associated with large increases in personal wealth. Workers on the cusp of retiring may now choose to do so earlier? (This is just one of the...

Do the self-employed opt out of the Canada Pension Plan?

In 2017, anyone with earnings was required to pay $4.95 in Canada Pension Plan contributions for every $100 of earnings (up to a maximum earnings threshold of $51,800 - rates here). For the employed, their $4.95 CPP/QPP contribution was matched by an equal contribution by their employer. However self-employed individuals are required to pay the entire employer+employee contribution themselves, amounting to $9.90 for every $100 of earnings. Now...

Scouts, Framers, Long Life and Personal Change

A brief history of Extra Life: I’m interviewing Steven Johnson about his new book “Extra Life” – all about how life expectancy has grown so dramatically over the last century or so. As you’d expect from Steven the book is fascinating – do drop in (5pm ET Monday 17 May at Politics & Prose, online). How to be a different person – for some reason I’ve been reading books about changing the way you think (Julia Galef’s very original and...

Interview with Christopher Pissarides: Unemployment and Labor Markets

Michael Chui and Anna Bernasek of the McKinsey Global Institute interview Christopher Pissarides (Nobel, '10) "about how he developed the matching theory of unemployment, how COVID-19 affected his research, and what might be in store for labor markets after the pandemic" (May 12, 2021, "Forward Thinking on unemployment with Sir Christopher Pissarides"). At the website, audio is available for the half-hour interview, along...

Recent articles

[unable to retrieve full-text content]1. Our tort system is a huge part of our broader regulatory system. Thus while repealing Section 230 (which shields tech companies from liability for material on their platforms) might be seen as “deregulation”, it would actually represent a huge increase in the government’s role in our economy. Both Dems and Republicans want to get […]

Lies vs. silence?

That is the contrast in my latest Bloomberg column.  The claims about the Republicans are more widely circulated in educated circles, so here is the section on the Democrats: Given the greater deployment of intellectual argument, smart, educated people are exposed to a more persuasive case for Democratic positions. But there is a danger in this asymmetry: when Democratic ideas are not working or are poorly designed. Rather than constructing...

Eurozone fiscal rules should be based on national macroeconomic stabilisation, not national debt stabilisation

In memory of Andrew Hughes Hallett Eurozone fiscal rules have been suspended during the COVID crisis, thankfully. But I have argued on this blog since it began in 2012 (e.g. here) that the Eurozone fiscal rules, or any modified version thereof, were not fit for purpose. Now is the time to rethink the whole basis on which those rules were introduced. Olivier Blanchard, Álvaro Leandro, and Jeromin Zettelmeyer also think the existing rules should...

Face-to-Face Communication in Organizations

Summary The COVID-19 pandemic has meant that many of us have now been working at home for most of the last year. The results of this global experiment have sometimes been positive, or at least not as negative as feared. Engagement and productivity have not nosedived, and many workers seem to prefer the new arrangements. There are, however, potential drawbacks. Not interacting with...

China Must Embrace Remote Work

The COVID-19 pandemic spurred a far-reaching shift to telecommuting throughout the West. But China has not followed suit, even though the social and environmental payoffs would be far larger than in the US and Europe. CHICAGO – Before the pandemic, firms and workers around the world used emails and conference calls to reduce communication costs. But a lack of coordination made using these technologies...

Noahpinion has moved to a new website!

Well folks, it's been a fun 10-year run at this little website. I'm moving on to a new platform: Substack! Here's the new Noahpinion:https://noahpinion.substack.com/Thanks for reading, and hope to see you at the new site!

Border tech

Marc Daalder tallies a few of the failures in getting better tech rolled out at the border.On Sunday, National Party Covid-19 Response spokesperson Chris Bishop revealed that a voluntary rollout of saliva-based testing of border workers had seen just 339 saliva tests performed since it began in January."Public health experts have recommended introducing regular saliva testing across our border workforce, but the Government has been very...

Face-to-Face Communication in Organizations

Summary The COVID-19 pandemic has meant that many of us have now been working at home for most of the last year. The results of this global experiment have sometimes been positive, or at least not as negative as feared. Engagement and productivity have not nosedived, and many workers seem to prefer the new arrangements. There are, however, potential drawbacks. Not interacting with...

Liz Cheney on Democracy and the Rule of Law

Link to the full text of Liz Cheney’s May 11, 2021 speech on the floor of the House of RepresentativesFor whatever length of time Donald Trump continues to have political influence, Liz Cheney’s six-and-a half-minute speech yesterday should be required viewing for all citizens of the United States. I found myself getting choked up because she points powerfully to the blessing of having a political system that gives us freedom and our need to...

“We don’t have a chance in hell …”, Canada’s poverty reduction strategy needs real voice

Source: https://twitter.com/ESDC_GC/status/1364596131590791171The Minister of Employment and Social Development in the Canadian federal government, Ahmed Hussen, recently tabled an annual report taking stock of the country’s poverty reduction strategy. The advisory council responsible for the reported dedicated it “to all those courageous people who shared their stories, successes and struggles with the Council in the hope that we would in...

32+ Years…

Do criminals respond to incentives?

At least in Minneapolis they do.I am old enough to remember the debate (late 1980's at the Sentencing Commission) about whether punishment deters crime.  Some criminologists mocked the economic model of crime which assumes that criminals respond optimally, rationally and self-interestedly to the incentives created by expected punishment (the probability of being caught and convicted times the punishment if convicted).  The policy implication...

A New Look at Income Inequality in the US

Yesterday, at the Hoover Economic Policy Working Group (EPWG), David Splinter of the Staff of the Joint Committee on Taxation discussed a paper he wrote with Gerald Auten of the Office of Tax Analysis at the Department of Treasury. A video of Splinter’s presentation, including many questions and answers, is posted on the EPWG web page here along with the paper “Income Inequality in the United States: Using Tax Data to Measure Long-term Trends”...

Weisbach advice

I got a chance to see the page proofs of Michael Weisbach's upcoming book, "The Economists' Craft."  This leapt out at me from the preface: A second observation I have made over the years is that, perhaps because of a lack of good advice, many scholars, both doctoral students and faculty members, constantly make the same ...

Paying for the right to be infected

Paying for the right to be infected August 14, 2020 in covid-19, economics, infection, Mechanism design Serious infectious diseases are a prime example of a public bad (non-exclusive and non-congestible). We limit them by restricting behavior and or getting individuals to internalize the externalities they generate. For example, one could mandate masks in public places. To be effective this requires monitoring and punishment....

What Three Economists Taught Us About Currency Arrangements

TweetApril 24, 2021 — A generation of great international economists is passing from the scene.  Richard Cooper died on December 23. An American, he was teaching his classes at Harvard until the very end. Robert Mundell, passed away on April 4.  Originally Canadian, he was a winner of the Nobel Prize in economics.  And John Williamson, on April 11. Originally British, he had been the first scholar hired by the Peterson Institute for...

A Brief History Of The Buy-to-Build Indicator

Posted on 14 May 2021 by Blair Fix Today I’m trying a different type of post - one that’s not a deep dive, but instead, a rapid-fire summary of an important topic. My inspiration comes from Cory Doctorow, a sci-fi author who runs an old-fashioned links blog that he syndicates across the internet. (At last count, it’s on pluralistic.net, Twitter, Mastodon, and Medium). I read Doctorow’s blog daily, as he writes consistently excellent...

Further reading

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US First Quarter GDP: Recovery or Just Another Rebound?

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The Worst Jobs Day Ever

Driven by the COVID-19 shutdown, April marked the greatest job loss in American history. The unemployment rate skyrocketed to 14.7 percent, and employers cut 20.5 million jobs. Those figures are heart-wrenching. But as awful as they are, they do not fully capture workers’ hardships. To be counted as unemployed, people must be available for work and actively seeking it. With schools closed, job opportunities withering, and social distancing the...

Joseph Schumpeter And Me

Jeffery S. McMullen of Indiana University published an article in the academic journal "Business Horizons." It is titled"Are we confounding heroism and individualism? Entrepreneurs may not be lone rangers, but they are heroic nonetheless."At the end of the post is a link to this article.McMullen cites a paper I wrote in the 1990s and mentions my name in the same sentence as Joseph Schumpeter, an important economist from...

Testing the Mill Hypothesis

My intermediate macro book begins with a quotation from John Stuart Mill, which ends with this conclusion:"My advice to you is to study the great writers on Political Economy, and hold firmly by whatever in them you find true; and depend upon it that if you are not selfish or hardhearted already, Political Economy will not make you so."A recent study suggests that Mill was right.

The new tools of monetary policy

By Haowen Chen Since the 1980s, interest rates around the world have trended downward, reflecting lower inflation, demographic and technological forces that have increased desired global saving relative to desired investment, and other factors. Although low inflation and interest rates have many benefits, the new environment poses challenges for central banks, who have traditionally relied on cuts to short-term interest rates to stimulate...

Central Banking Stories to Watch in 2019

Happy New Year, everybody! 2018 has been a quiet year for my blog, but productive on other fronts, as I've kept busy with research and my family. But here are a few central bank-related stories I'm interested in following in the new year. 1. New Governor at Reserve Bank of IndiaFollowing the early exit of Governor Urjit Patel in December, Prime Minister Modi appointed the third central bank governor in just three years: Shaktikanta Das....

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The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

In Memory of Bob Rossana

Robert “Bob” Rossana died back in February of this year. I was inadvertently left off of the university announcement email and did not hear about it until much later. Bob was my dissertation advisor. He meant a lot to me and so I want to share some thoughts. In graduate school, there were four macroeconomics courses. Two core classes and two field classes. Bob was instrumental in getting this four-course system started, as well as a “macro...

Who were the top taxpayers in 1923?

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The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...