Found 1343 article(s) in category 'Economic Growth'

The Economy is on a Sugar High, and Tax Cuts Won’t Help

The Economy is on a Sugar High, and Tax Cuts Won’t Help. Lawrence Summers, December 10, 2017, Opinion, “Lawrence H. Summers is a professor at and past president of Harvard University. He was treasury secretary from 1999 to 2001 and an economic adviser to President Barack Obama from 2009 through 2010.  The approaching end of President Trump’s first year in office, another strong employment report and a still-strong stock market make it appropriate to revisit my year-old judgment that the economy is enjoying a “sugar high.” Unfortunately, the best available evidence suggests that signs of current market and economic strength are largely unrelated to government policy, that the drivers of this year’s economic strength are likely transient and that the structural foundation of the U.S. economy is weakening. Sugar high remains the right diagnosis, and tax cuts are very much the wrong prescription.Link

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Surveillance: Feldstein Sees Capital Inflows if Tax Bill Passes

Surveillance: Feldstein Sees Capital Inflows if Tax Bill Passes. Martin Feldstein, December 6, 2017, Audio, “Martin Feldstein, Harvard University George F. Baker Professor of Economics, says now is the time for tax reform because the politics are right. Henry Olsen, EPPC Senior Fellow, says President Trump needs to recover his populist mojo. Matt Hornbach, Morgan Stanley Global Head of Interest Rates Strategy, says it’s time for the next bond market phase. Michael Chui, McKinsey & Co. Senior Fellow, says there is enough work for people to do, even with the increased use of robots.Link

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Largest Mass. Companies Are Mostly Silent On GOP Tax Plans

Largest Mass. Companies Are Mostly Silent On GOP Tax Plans. Mihir Desai, December 6, 2017, Audio, “Corporations are the cornerstone of both the House and Senate versions of the tax overhaul. Both bills propose deep cuts in the corporate tax rate — from 35 percent to 20 percent. The bills also call for a territorial tax system to replace the current worldwide tax system, in which multinational corporations with headquarters in the United States are required to pay the U.S. tax rate if they want to bring profits back into the country.Link

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Dear colleagues, please explain your letter to Steven Mnuchin

Dear colleagues, please explain your letter to Steven Mnuchin. Lawrence Summers, Jason Furman, November 28, 2017, Opinion, “You recently wrote an open letter to Treasury Secretary Steven Mnuchin quantifying the economic impact of tax reform. We are interested in and surprised by your analysis. We share your commitment to the idea that well-designed tax reform can make the economy stronger and that careful economic analysis is essential. And we know that you all share our belief that such careful analysis is well served by discussion and debate of these issues that is at least as frank and vigorous as what we are all accustomed to in the average economics seminar. To that end, we think it would be useful to lay out some of the questions we have about your analysis:Link

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The Elusive Promise of Structural Reform

The Elusive Promise of Structural Reform. Dani Rodrik, November 28, 2017, Book Chapter, “This Chapter reconsiders the notion of and rationale for ‘structural reforms.’ Structural reforms are changes in labor and product markets as well as wider institutional changes that aim to increase the efficiency with which labor and capital are allocated in the economy, ensuring that these resources go where their contribution to national income is largest. If successful, such changes promote productivity, investment, and growth. Structural reforms are often part of the conditionality accompanying financial assistance, and the assistance offered to Greece since 2010 is no exception…Link

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Trump’s version of capitalism looks a lot like revenge — and it endangers our democracy

Trump’s version of capitalism looks a lot like revenge — and it endangers our democracy. Lawrence Summers, November 27, 2017, Opinion, “In response to the Carrier caper after the election last year, I decried the Trump administration’s preference for what I called ad hoc deal capitalism. I noted that the practice was characteristic of developing countries and earlier times in the United States and that it was much less conducive to prosperity and freedom than capitalism based on the predictable rule of law.Link

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Cutting US Corporate Tax Is Worth the Cost

Cutting US Corporate Tax Is Worth the Cost. Martin Feldstein, November 27, 2017, Opinion, “One of the main criticisms leveled at congressional Republicans’ proposal to cut corporate taxes is that a higher budget deficit would amount to an undesirable fiscal stimulus. But with monetary policy turning contractionary, and most experts predicting a US recession in the next five years, stimulus should be welcomed.Link

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How Best to Promote Research and Development

How Best to Promote Research and Development. Ricardo Hausmann, November 24, 2017, Opinion, “Clearly, there is something appealing about a start-up-based innovation strategy: it feels democratic, accessible, and so California. But it is definitely not the only way to boost research and development, or even the main way, and it is certainly not the way most major innovations in the US came about during the twentieth century.Link

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Tax Reform – Process Failures, Loopholes and Wealth Windfalls

Tax Reform – Process Failures, Loopholes and Wealth Windfalls. Stephen Shay, November 21, 2017, Paper, “The GOP drive for a political victory on tax reform will come at a high cost if it succeeds. The extreme reduction in capital taxation will result in windfall wealth transfers to the already wealthy. Deficit expanding tax legislation will raise pressure for higher interest rates that hinder rather than enhance economic growth. Rushed tax legislation will be rife with undiscovered loopholes that increase the windfalls and scope of the deficit. Instead of the GOP-promised economic growth and benefits for the middle class there will be increased deficits and/or paygo reductions in Medicare, defense and discretionary spending.Link

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