Monthly Archives: December 2013

Capital Market Distortions in Chinese Manufacturing

From Zheng Song and Guiying Wu:  Capital market distortions lower aggregate productive efficiency by misallocating resources. The existing literature infers such distortions from the dispersion of the average revenue product of capital. However, the methodology is subject to a set of identification … Continue reading

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Housing Collateral and Entrepreneurship

From Martin Schmalz, David Sraer, and David Thesmar: This paper shows that collateral constraints restrict entrepreneurial activity. Our empirical strategy uses variations in local house prices as shocks to the value of col- lateral available to individuals owning a house and … Continue reading

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The Dynamic Effects of Personal and Corporate Income Tax Changes in the United States

From Karel Mertens and Morten Ravn: This paper presents evidence on the aggregate effects of changes in federal tax policy in the United States in the post-WWII sample. Exogenous changes in taxes are identified in a vector autoregressive model by proxying latent … Continue reading

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Housing Dynamics

From Ed Glaeser, Joseph Gyourko, Eduardo Morales and Charles Nathanson: The volatility of housing prices and construction levels is high. Both price changes and permits exhibit strong positive serial correlations at one year frequencies. Prices, but not permits, show strong mean … Continue reading

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The Effect of Uncertainty on Investment: Evidence from Texas Oil Drilling

From Ryan Kellogg: This paper estimates the response of investment to changes in uncertainty using data on oil drilling in Texas and the expected volatility of the future price of oil. Using a dynamic model of firms’ investment problem, I find … Continue reading

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The Future of Capital Income Taxation

From Alan Auerbach: The case against capital income taxation is stronger now than when Pechman wrote [in 1900], given the difficulty of collecting capital income taxes in a world of financial innovation and capital mobility. […] The rising importance of financial … Continue reading

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Rethinking capital and wealth taxation

From Thomas Piketty and Emmanuel Saez: This paper reviews recent developments in the theory of optimal capital taxation. We emphasize three main rationales for capital taxation. First, the frontier between capital and labor income flows is often fuzzy, thereby lending … Continue reading

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