What I am doing today

Today, I am wearing my political theory hat.  If you happen to be a student at Brown, you can find me here.

Hillary's Plan for Pharmaceuticals

Maybe good politics, but not good economics, says Megan McArdle.

Nobel Predictions

Thomson Reuters points to Blundell, List, and Manski.

Feel-the-Bern Fiscal Policy

From the Wall Street Journal (news article, not editorial page):

Sen. Bernie Sanders, whose liberal call to action has propelled his long-shot presidential campaign, is proposing an array of new programs that would amount to the largest peacetime expansion of government in modern American history. In all, he backs at least $18 trillion in new spending over a decade, according to a tally by The Wall Street Journal....To pay for it, Mr. Sanders, a Vermont independent running for the Democratic nomination, has so far detailed tax increases that could bring in as much as $6.5 trillion over 10 years, according to his staff.

What to do when the natural rate of interest declines

Increase the inflation target, according to this new paper, which uses the dynamic model of aggregate demand and aggregate supply from my favorite intermediate macroeconomics textbook.

Twelve reasons to like Jeb’s tax plan

Jeb Bush has released a tax plan.  Here are some elements of it that I find attractive:

1. It lowers the top rate on personal income to 28 percent, the same rate as the bipartisan 1986 tax reform.
2. It broadens the base by capping the use of itemized deductions.
3. It eliminates the deductibility of state and local taxes, so low-tax states and towns no longer subsidize high-tax ones.
4. It maintains the deductibility of charitable giving, encouraging private solutions to social problems.
5. It reforms the tax treatment of secondary earners and seniors, who are more responsive to tax incentives than primary earners.
6. It eliminates the stealth marginal tax rates from PEP and Pease.
7. It eliminates the estate tax, so the tax system no longer penalizes those who want to help their children and grandchildren.
8. It lowers the corporate tax rate to be close to international norms.
9. It moves from a global to a territorial tax system, like most other nations have.
10. It eliminates the deductibility of interest expenses, putting debt finance and equity finance on a more level planning field.
11. It includes full expensing of investment expenditure, moving the system toward a consumption-based tax.
12. It expands the earned income tax credit for childless taxpayers, strengthening the social safety net.

Here is an assessment of the plan by John Cogan, Martin Feldstein, Glenn Hubbard, and Kevin Warsh.

More Competition

Larry Summers is now blogging.

The Path to a Carbon Tax

Click here to read my column in Sunday's NY Times.

The Game Theory of Heroism

From the NY Times.