Furman Reviews Banerjee & Duflo

Here. His bottom line: Great book but...

when it came to the biggest contemporary hot button issues they left all nuance and care behind to present selective evidence for an overly simplistic narrative that would be comforting to typical progressive reader without challenging any of their preconceptions.

The Case for Capitalism

David Brooks has an excellent column today.

How to Increase Taxes on the Rich (If You Must)

Last month I participated in a PIIE conference on inequality. Here is the written version of my remarks.

Why I am now an independent

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

Warren's Medicare for All

A dissection from Chuck Blahous.

NPR on The Pigou Club

Which Harvard students are least comfortable expressing their opinions?

Harvard recently released the results of a survey on "Inclusion and Belonging." One question asked students whether they agreed with the statement "I feel comfortable expressing my opinions to others at Harvard."

Overall, 68 percent of students agreed. Moreover, the statement received majority agreement for most subgroups--men and women; white, black, Hispanic, and Asian; straight and gay; U.S. citizen and foreign; Christian, Jewish, and Muslim; and so on.

The only subgroup for which the statement did not generate majority agreement was those students who self-identified as conservative. Only 44 percent of conservative students agreed, compared with 61 percent of moderates and 73 percent of liberals.

I am no longer a Republican

I just came back from city hall, where I switched my voter registration from Republican to unenrolled (aka independent). Two reasons:

First, the Republican Party has largely become the Party of Trump. Too many Republicans in Congress are willing, in the interest of protecting their jobs, to overlook Trump's misdeeds (just as too many Democrats were for Clinton during his impeachment). I have no interest in associating myself with that behavior. Maybe someday, the party will return to having honorable leaders like Bush, McCain, and Romney. Until then, count me out.

Second, in Massachusetts, unenrolled voters can vote in either primary. The Democratic Party is at a crossroads, where it has to choose either a center-left candidate (Biden, Buttigieg, Klobuchar, Yang) or a far-left populist (Warren, Sanders) as their nominee for president. I intend to help them choose the former. The latter propose to move the country too far in the direction of heavy-handed state control. And in doing so, they tempt those in the center and center-right to hold their noses and vote for Trump's reelection.

A Coffee-Table Book for Economists

No kidding. Includes great portraits of 90 economists.

Yet Another Reason to be Skeptical of Surveys

From Business Insider, without a hint of irony:

About 44% of people surveyed who were either married to or living with a partner said that they made more money than their partner before they started dating, and 30% said they made less. 

Kotlikoff on Tax Progressivity

Larry has an excellent article summarizing his work looking at the fiscal system from a life-cycle perspective. His bottom line:

Far from being flat, the net tax rate facing middle age Americans rises rapidly with their resources—from negative 46.4% for the bottom 20% to positive 34.5% for the top 1%.

A Discussion of the Wealth Tax

From Thursday afternoon. Includes Emmanuel Saez, Larry Summers, and me, in that order. Larry is particularly interesting.

Sad News from China

Via the NY Times:

Some universities have replaced textbooks by Western academics such as Milton Friedman and N. Gregory Mankiw with books written under a program called “Marxist theory research and building project.”

Blanchard on the Fed's Target

Olivier Blanchard suggests that the Fed consider a target for nominal wages rather than for the prices of goods and services. Ricardo Reis and I agree. (ungated pdf)

Piketty and Saez Revisited

This paper by Gerald Auten (Office of Tax Analysis, U.S. Treasury Department) and David Splinter (Joint Committee on Taxation) seems important.  The abstract (emphasis added):

Top income share estimates based only on individual tax returns, such as Piketty and Saez (2003), are biased by tax-base changes, major social changes, and missing income sources. Addressing these issues requires numerous assumptions, especially for broadening income beyond that reported on tax returns. This paper shows the effects of adjusting for technical tax issues and the sensitivity to alternative assumptions for distributing missing income sources. Our results suggestthat top income shares are lower than other tax-based estimates, and since the early 1960s, increasing government transfers and tax progressivity resulted in little change in after-tax top income shares.

A key figure:

Click on graphic to enlarge.

Yang vs Warren

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

The Trophy Wife Tax Credit

As I have pointed out, Elizabeth Warren's wealth tax, as described, involves a substantial marriage penalty. Now Bernie Sanders comes along with his own wealth tax proposal. He solves the marriage penalty problem by halving the thresholds for singles.  This approach introduces the opposite problem--a marriage bonus.

As I understand the plan, if a single man is worth $30 million, he pays $140,000 per year under the Sanders wealth tax. If he marries his assistant, who has a wealth of less than $2 million, their tax liability falls to zero.

For a single man with higher wealth, the marriage bonus is even larger. Under the Sanders plan, for someone worth $100 million, marriage can reduce the tax liability by $410,000 per year.

Put another way, this plan can be viewed as imposing a tax on widows and widowers. A married couple worth $30 million does not pay anything. When one spouse dies, the surviving spouse then owes $140,000 per year.

Economics Teaching Conference

I will be talking at the annual conference of the National Economics Teaching Association, to be held October 24-25, 2019, in Kansas City. If you are interested in learning more about the meeting, click here for more information.

From the conference organizers:  The deadline to have a teaching session considered for the conference has been extended to Monday, September 23. Be sure to get your submission in ASAP! You can submit here.

Should grad students teach?

A student emails me a question:

Dear Prof. Mankiw, 

I am in the first week of my PhD in economics. I follow your blog and I have read the advice you have posted for graduate students. 

I have heard competing hypotheses about whether PhD students should teach during their studies. On one hand, teaching is a great experience and a CV-builder for hopeful future academics. On the other hand, teaching is a lot of work, and the opportunity cost of time for any PhD student is high. 

Do you have any advice about how a PhD student (and a big fan of your blog!) can reconcile these points? 

Cheers,

[name withheld]

Teaching is not necessary while pursuing a PhD, but it is usually a good idea for several reasons.

1. Grad students can usually use the money, and teaching is often a good way to make some.
2. Teaching improves your oral presentation skills, which will be crucial when you go on the job market.
3. You will learn whether you enjoy teaching. If not, you might consider alternatives to an academic career.
4. When you apply for jobs, teaching experience will be a plus for many schools that might hire you.
5. Teaching will help remind you why you fell in love with economics in the first place. That can be useful during those inevitable days when your dissertation research is not going well.
6. Teaching will provide greater variety to your day than if you are solely focused on research. The personal interaction with students will often lift your spirits.
7. When you are teaching, you can be confident that you are making positive contributions to society, and that feeling is also good for your mental health.

Let me also mention one risk: If you enjoy teaching, you might use it as a distraction from getting your dissertation done. The key is moderation. Teach some, but not too much.

Writing Advice

An unwitting collaboration with John Cochrane.