We study the tax payment and innovation consequences of limiting the tax deductibility of research and development (“R&D”) expenditures. Beginning in 2022, U.S. companies are required to capitalize and amortize R&D rather than immediately deduct these expenditures. We utilize variation in U.S. firms’ fiscal year ends to test the effects of the R&D tax change […]
The Consequences of Limiting the Tax Deductibility of R&D
The Consequences of Limiting the Tax Deductibility of R&D
03 Dec 2024 Leave a comment
in applied price theory, econometerics, entrepreneurship, fiscal policy, macroeconomics, Public Choice, public economics Tags: taxation and entrepreneurship, taxation and investment
Another corporate welfare failure
02 Dec 2024 Leave a comment
in applied price theory, comparative institutional analysis, energy economics, entrepreneurship, environmental economics, financial economics, global warming, income redistribution, industrial organisation, politics - New Zealand, Public Choice, rentseeking, survivor principle Tags: climate alarmism
The Herald reported: The Government has $115 million at risk from the collapse of SolarZero. Finance Minister Nicola Willis said she was seeking urgent advice on the SolarZero situation. She had no further comment. NZ Green Investment Finance – a “green investment bank” created by the previous Government to fund environmentally-friendly businesses – made a $145m…
Another corporate welfare failure
Usual suspects want more debt
30 Nov 2024 Leave a comment
in applied price theory, budget deficits, business cycles, economic growth, fiscal policy, labour economics, liberalism, macroeconomics, Marxist economics, monetary economics, politics - New Zealand, Public Choice, public economics, unemployment Tags: monetary policy
A group of economists have written to Nicola Willis complaining about the modest fiscal restraint imposed on the public sector. Grant Robertson grew government expenditure by $76 billion/year or a massive 7.6% of GDP, leaving NZ with a structural deficit. Many were champions of his policies or worked for him, and now they complain his […]
Usual suspects want more debt
Unauthorized Immigration and Local Government Finances
30 Nov 2024 Leave a comment
in applied price theory, econometerics, human capital, income redistribution, labour economics, labour supply, politics - USA, poverty and inequality, Public Choice, public economics Tags: economics of immigration
This paper examines how unauthorized immigration affects the fiscal health of local governments in the United States. Using detailed data on unauthorized immigrants’ countries of origin and arrival dates from the Syracuse TRAC database, we isolate immigration flows driven by social, economic, and political conditions in source countries. We predict local immigration patterns using a […]
Unauthorized Immigration and Local Government Finances
The Royal Commission on Covid-19 Report is a Repugnant, Unstructured Mishmash of Disinformation, Dressed up as a Single Source of Truth.
28 Nov 2024 1 Comment
in applied price theory, health economics, politics - New Zealand Tags: economics of pandemics
How can Professor Blakely, who is co-author of NZ’s Royal Commission Report into Covid, write a report critiquing our government’s approach to Covid when he was the intellectual architect of that approach? He co-authored the 2020 British Medical Journal article with Professor Michael Baker called, “Elimination could be the optimal response strategy for covid-19”. That…
The Royal Commission on Covid-19 Report is a Repugnant, Unstructured Mishmash of Disinformation, Dressed up as a Single Source of Truth.
Desired Fertility versus the Mueller Effect
28 Nov 2024 Leave a comment
in applied price theory, economics of love and marriage, labour economics, labour supply, law and economics, population economics Tags: economics of fertility
Six months ago, I’m not sure that I’d ever heard of demographer Lyman Stone. Now, people in my circles randomly drop his name on a weekly basis. His favorite topic, in case you haven’t heard, is global fertility decline. As a longtime natalist, I share his concerns. One of Stone’s top takeaways: Instead of talking…
Desired Fertility versus the Mueller Effect
Maximum Progress on Progressivism
27 Nov 2024 Leave a comment
in applied price theory, comparative institutional analysis, constitutional political economy, discrimination, economics of crime, law and economics, liberalism, Marxist economics, politics - USA Tags: conjecture and refutation
If you are not yet a fan of Michael Huemer, you should be. Hyperbole is the worst thing in the universe, but I still affirm the following: Huemer’s The Problem of Political Authority is the best book on political philosophy. Huemer’s Ethical Intuitionism is the best book on meta-ethics. Huemer’s Knowledge, Reality, and Value is…
Maximum Progress on Progressivism
Try as they might, the Australian Green party can’t make university education free
25 Nov 2024 Leave a comment
in applied price theory, economics of education, human capital, income redistribution, labour economics, labour supply, liberalism, Marxist economics, occupational choice, politics - Australia, poverty and inequality, Public Choice, public economics, rentseeking Tags: College premium, regressive left
The Australian Green party has proposed cancelling all student debt in Australia, as part of an aim for government to provide “free education for life”. However, free education is not free. In an article in The Conversation earlier this month, Bruce Chapman (Australian National University) makes a case against the claim that cancelling student debt…
Try as they might, the Australian Green party can’t make university education free
Automakers’ Costly Gamble on EVs: A Lesson in Ignoring Consumer Demand
25 Nov 2024 Leave a comment
in applied price theory, economics of bureaucracy, economics of regulation, energy economics, environmental economics, global warming, politics - USA, Public Choice, transport economics Tags: electric cars
Ultimately, the market will decide the winners and losers. Automakers that prioritize consumer satisfaction over government market manipulation will thrive, while those that gambled on an uncertain future may find themselves scrambling to survive. Tesla’s trajectory proves that it’s possible to innovate without compromising, and the rest of the industry would be wise to take notes.
Automakers’ Costly Gamble on EVs: A Lesson in Ignoring Consumer Demand
Milei and populism
23 Nov 2024 1 Comment
in applied price theory, budget deficits, comparative institutional analysis, constitutional political economy, development economics, economic growth, economics of bureaucracy, economics of regulation, fiscal policy, growth disasters, income redistribution, macroeconomics, monetarism, monetary economics, Public Choice, rentseeking, unemployment Tags: Argentina
Bryan Caplan and Daniel Klein both opine on Milei and populism, Dan being very enthusiastic, while Bryan praising Milei but more reserved in his praise of populism. I too am a big fan of Milei, and I think he is still on a good track. If his reforms do not succeed, likely it will not […]
Milei and populism
Bob Ekelund Remembered
23 Nov 2024 Leave a comment
in applied price theory, comparative institutional analysis, economics of bureaucracy, economics of information, economics of regulation, entrepreneurship, health economics, history of economic thought, industrial organisation, law and economics, market efficiency, Milton Friedman, property rights, Public Choice, public economics, regulation, theory of the firm Tags: competition law, Product safety
TweetHere’s my just-published remembrance, in Public Choice, of my late teacher, dissertation advisor, co-author, and friend, Bob Ekelund. Three slices: The only textbook assigned for the course was Milton Friedman’s Price Theory. From some younger members of Auburn’s economics faculty, I heard a few cocktail-lubricated complaints that core theory courses in a modern economics Ph.D.…
Bob Ekelund Remembered
The Borjas-Caplan Immigration Debate
20 Nov 2024 Leave a comment
in applied price theory, development economics, human capital, labour economics, labour supply, population economics Tags: economics of immigration
Before the fictional musical Borjas-Caplan immigration debate of 2024, there was the non-fictional non-musical Borjas-Caplan immigration debate of 2019. It was an unusual format: Both of us had the floor for over hour each. Borjas:Me:If you pay close attention to my opponent’s presentation, you’ll discover that he’s quite unlike every other critic of immigration. In…
The Borjas-Caplan Immigration Debate
Local Labor Market Effects of Amazon
18 Nov 2024 Leave a comment
in applied price theory, econometerics, labour economics, labour supply, urban economics
Does the entry of a large employer to a local labor market increase welfare for residents? To answer this question, I analyze the local effects of the dramatic expansion of Amazon’s fulfillment center (FC) network from 2010 onward. I exploit the staggered roll-out of FCs across large U.S. metros in a difference-in-difference framework. I find […]
Local Labor Market Effects of Amazon
Setelinleikkaus: When Finns snipped their cash in half to curb inflation
18 Nov 2024 Leave a comment
in applied price theory, economic history, financial economics, law and economics, macroeconomics, monetarism, monetary economics, property rights Tags: Finland, monetary policy
On the last day of 1945, with World War II finally behind it, Finland’s government announced a new and very strange policy.All Finns were required to take out a pair of scissors and snip their banknotes in half. This was known in Finland as setelinleikkaus, or banknote cutting. Anyone who owned any of the three…
Setelinleikkaus: When Finns snipped their cash in half to curb inflation
Prediction Markets for the Win
10 Nov 2024 Leave a comment
in applied price theory, financial economics, politics - USA Tags: 2024 presidential election
The prediction markets predicted the election outcome more accurately and more quickly than polls or other forecasting methods, just as expected from decades of research. In this election, however, many people discounted the prediction markets because of large trades on Polymarket. Paul Krugman, for example, wrote: Never mind the prediction markets, which are thin and […]
Prediction Markets for the Win
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