Economic theory dating widow and dating
Thus, Robert Hall aptly described the state of economic thinking in 1973 when he wrote: The benefits of inflation derive from the use of expansionary policy to trick economic agents into behaving in socially preferable ways even though their behavior is not in their own interest....
The gap between actual and expected inflation measures the extent of the trickery....
Stefanie Stantcheva of Harvard University focuses on optimal design of the tax system.
Some of her research explores the degree to which the tax rate affects the mobility of superstar inventors and the type of tax structure that could best encourage human capital investment.
Health care costs represent a nearly 18 percent of U. gross domestic product and 20 percent of government spending.
While there is detailed information on where these health care dollars are spent, there is much less evidence on how this spending affects health.
But according to the permanent income model, temporary tax cuts have much less of an effect on consumption than Keynesians had thought.
Tax policy influences a wide variety of personal behaviors, such as where to live and whether to make human capital investments.
The rational expectations version of the permanent income model has been extensively tested, with results that are quite encouraging.
The evidence indicates that the model works well but imperfectly.
This result encapsulates the consumption-smoothing aspect of the permanent income model and reflects people’s efforts to estimate their wealth and to allocate it over time.
If consumption in each period is held at a level that is expected to leave wealth unchanged, it follows that wealth and consumption will each equal their values in the previous period plus an unforecastable or unforeseeable random shock—really a forecast error.