Calendrier du 20 mai 2021
Macroeconomics Seminar
Du 20/05/2021 de 16:00 à 17:30
Using Zoom
OSOTIMEHIN Sophie (Université du Quebec à Montreal)
Misallocation and Intersectoral linkages
écrit avec Latchezar Popov
We analytically characterize the aggregate productivity loss from distortions in the presence of sectoral production linkages. We find that accounting for low input substitutability reduces the productivity loss and the impact of intermediate-input suppliers. Moreover, with elasticities below one (i.e. below Cobb-Douglas), sectoral linkages do not systematically amplify the productivity loss. We quantify these effects in the context of the distortions caused by market power, using industry- level data for 35 countries. With our benchmark calibration, the median aggregate productivity loss from industry-level markups is 1.2; assuming Cobb-Douglas elasticities would lead to overestimating the productivity loss by a factor of 1.8.
Du 20/05/2021 de 12:30 à 13:30
PSE- 48 boulevard Jourdan, 74014 Paris, salle R1-09
ZIDAR Owen (Princeton)
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brown bag Travail et Économie Publique
Du 20/05/2021 de 12:30 à 13:30
Using Zoom
STOSTAD Morten (PSE)
Inequality as an Externality: Consequences for Tax Design
This paper proposes to treat income inequality as an economic externality in order to introduce the societal effects of inequality into welfarist models. These effects can include (but are not limited to) changes in political efficiency, economic growth rates, or interpersonal trust levels. We introduce such effects in a simple and generalizable welfarist framework and show that they can have sizeable optimal policy consequences that cannot be captured by standard risk aversion or social welfare weights. Novel policy implications are illustrated through the classical optimal non-linear income taxation model, where the social planner must face a trade-off between revenue collection and income inequality levels. Resulting policy consequences are disproportionately located at the top; optimal top marginal tax rates are strongly and robustly dependent on the magnitude of the inequality externality. We use several real-world examples to show that tax policy previously unsupported by optimal taxation theory can be explained in our framework. The findings indicate that the magnitude of the inequality externality could be considered a crucial economic variable.
TOM (Théorie, Organisation et Marchés) Lunch Seminar
Du 20/05/2021 de 12:30 à 13:30
Online
CHARROIN Liza (Université Paris 1)
Logrolling affects the relative performance of alternative q-majority rules
It has been argued that simple majority rule is the best decision rule for a committee taking a large number of binary decisions. In addition to a general symmetry condition, the underlying argument assumes that members vote sincerely on each proposal. We argue that the conclusion changes if members engage in logrolling agreements. We propose simple algorithms to predict agreements and voting outcomes under different q-majority rules, and apply them to a large number of randomly generated preference profiles. We find that on average, logrolling improves the performance of unanimity rule, and worsens the performance of majority rule. If the number of decisions to be taken is large enough, unanimity rule outperforms majority rule. We conduct a laboratory experiment to verify whether subjects engage in the predicted agreements, and whether the relative performance of unanimity rule improves as predicted. Predicted agreements occur more often under unanimity rule and when they increase the aggregate payoff, while they are less likely if they are more complex (involve bigger coalitions and bundles of project). On aggregate, logrolling always has a positive impact under unanimity rule while it has a mixed impact under majority rule. We conclude that in the presence of logrolling, greater majority requirements may be desirable.