Debt in the U.S. Economy

In 2011, the publicly held debt-to-GDP ratio in the United States reached 68% and is expected to continue rising. Many proposals to curb the government deficit and the resulting debt are being discussed. In this paper, we use the standard neoclassical growth model to examine the future path of output, budget deficits, and debt in the U.S. economy under different tax policies. While this framework is relatively simple, it incorporates the general equilibrium effects of tax policy, which are often missing from the Congressional Budget Office projections. Our results show that debt-to-GNP ratios above 100% are likely to continue into the future and that even small labor supply elasticities have a significant impact on these projections. We also find that labor income tax rates higher than 40% are needed for the deficit-to-GNP ratio to return to its historical level in the long run. Such high tax rates, however, result in about 10% lower per capita GNP and large welfare costs at the steady state compared to the historical tax rates

Is the Turkish current account deficit sustainable?

During the 2011-2015 period, Turkey's current account deficit as a percentage of GDP was one of the largest among the OECD countries. In this paper, we examine if this deficit can be considered sustainable using the Engel and Rogers (2006) approach. In this framework, the current account of a country is determined by the expected discounted present value of its future share of world GDP relative to its current share. A country, whose income is anticipated to rise relative to the rest of the world is expected to borrow now and run a current account de cit. Our findings suggest that Turkey's current account deficit in 2015 may be considered sustainable if the Turkish economy's share in the world economy could continue to grow at rates similar to the past. The same approach, however, indicates that the current account deficit in 2011, at its peak, was unlikely to be sustainable

Is Zimbabwe More Productive Than the United States? Some Observations From PWT 8.1

In Penn World Table (PWT) 8.1, several developing countries stand out as outliers with high total factor productivity (TFP) levels relative to the United States (U.S.). For example, in 2011, Zimbabwe and Trinidad and Tobago are reported to have 3 and 1.6 times higher TFP levels than the U.S., respectively. In addition, for several other countries, such as Turkey and Gabon, the stated levels of TFP are very similar to that of the U.S. level (1.01 and 1.11 times the U.S. levels, respectively). Estimates for some of these countries seem rather unlikely when compared with other measures of productivity (such as output per worker). While in the construction of TFP levels PWT does use country-speci c factor shares we show that their results are very similar to calculating TFP levels with a Cobb-Douglas production function where capital and labor shares are assumed to be the same across all countries, i.e., using a constant labor share of 2/3 for all countries. A simple modi cation, using a constant labor share of 2/3 for developed countries and 1/2 for developing countries, generates more \plausible" estimates for TFP levels

A Field Study on Matching with Network Externalities

We study the effects of network externalities within a protocol for matching faculty to offices in a new building. Using web and survey data on faculty's attributes and choices, we identify the different layers of the social network: institutional affiliation, coauthorships, and friendships. We quantify the effects of network externalities on choices and outcomes, disentangle the layers of the networks, and quantify their relative influence. Finally, we assess the protocol used from a welfare perspective. Our study suggests the importance and feasibility of accounting for network externalities in assignment problems and evaluates techniques that can be employed to this end

Is Zimbabwe More Productive Than the United States? Some Observations From PWT 8.1

In Penn World Table (PWT) 8.1, several developing countries stand out as outliers with high total factor productivity (TFP) levels relative to the United States (U.S.). For example, in 2011, Zimbabwe and Trinidad and Tobago are reported to have 3 and 1.6 times higher TFP levels than the U.S., respectively. In addition, for several other countries, such as Turkey and Gabon, the stated levels of TFP are very similar to that of the U.S. level (1.01 and 1.11 times the U.S. levels, respectively). Estimates for some of these countries seem rather unlikely when compared with other measures of productivity (such as output per worker). While in the construction of TFP levels PWT does use country-speci c factor shares we show that their results are very similar to calculating TFP levels with a Cobb-Douglas production function where capital and labor shares are assumed to be the same across all countries, i.e., using a constant labor share of 2/3 for all countries. A simple modi cation, using a constant labor share of 2/3 for developed countries and 1/2 for developing countries, generates more \plausible" estimates for TFP levels

The Japanese saving rate between 1960 and 2000: productivity, policy changes, and demographics

Saving rate, Japan, Overlapping generations, Calibration, E21, E32,