453 research outputs found
Viable tax constitutions
Taxation is only sustainable if the general public complies with it. This observation is uncontroversial with tax practitioners but has been ignored by the public finance tradition, which has interpreted tax constitutions as binding contracts by which the power to tax is irretrievably conferred by individuals to government, which can then levy any tax it chooses. However, in the absence of an outside party enforcing contracts between members of a group, no arrangement within groups can be considered to be a binding contract, and therefore the power of tax must be sanctioned by individuals on an ongoing basis. In this paper we offer, for the first time, a theoretical analysis of this fundamental compliance problem associated with taxation, obtaining predictions that in some cases point to a re-interptretation of the theoretical constructions of the public finance tradition while in others call them into question
The intellectual influence of economic journals: quality versus quantity
The evaluation of scientific output has a key role in the allocation of
research funds and academic positions. Decisions are often based on quality indicators
for academic journals, and over the years, a handful of scoring methods have
been proposed for this purpose. Discussing the most prominent methods (de facto
standards) we show that they do not distinguish quality from quantity at article level.
The systematic bias we find is analytically tractable and implies that the methods are
manipulable. We introduce modified methods that correct for this bias, and use them
to provide rankings of economic journals. Our methodology is transparent; our results
are replicable
Priority for the Worse Off and the Social Cost of Carbon
The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC
A glimpse into the differential topology and geometry of optimal transport
This note exposes the differential topology and geometry underlying some of
the basic phenomena of optimal transportation. It surveys basic questions
concerning Monge maps and Kantorovich measures: existence and regularity of the
former, uniqueness of the latter, and estimates for the dimension of its
support, as well as the associated linear programming duality. It shows the
answers to these questions concern the differential geometry and topology of
the chosen transportation cost. It also establishes new connections --- some
heuristic and others rigorous --- based on the properties of the
cross-difference of this cost, and its Taylor expansion at the diagonal.Comment: 27 page
Discounting Climate Change
* The ideas I apply here were presented in my Plenary Lecture to the World Congress o
Inside Organizations: Pricing, Politics, and Path Dependence
When economists have considered organizations, much attention has focused on the boundary of the firm, rather than its internal structures and processes. In contrast, this review sketches three approaches to the economic theory of internal organization—one substantially developed, another rapidly emerging, and a third on the horizon. The first approach (pricing) applies Pigou's prescription: If markets get prices wrong, then the economist's job is to fix the prices. The second approach (politics) considers environments where important actions inside organizations simply cannot be priced, so power and control become central. Finally, the third approach (path dependence) complements the first two by shifting attention from the between variance to the within. That is, rather than asking how organizations confronting different circumstances should choose different structures and processes, the focus here is on how path dependence can cause persistent performance differences among seemingly similar enterprises
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