Positive and Normative Judgments Implicit in U.S. Tax Policy, and the Costs of Unequal Growth and Recessions / Benjamin B. Lockwood, Matthew C. Weinzierl.

Format:

Book

Author/Creator:

Lockwood, Benjamin B.

Contributor:

National Bureau of Economic Research.

Weinzierl, Matthew C.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21927.

NBER working paper series no. w21927

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

Calculating the welfare implications of changes to economic policy or shocks requires economists to decide on a normative criterion. One approach is to elicit the relevant moral criteria from real-world policy choices, converting a normative decision into a positive inference, as in the recent surge of "inverse-optimum" research. We find that capitalizing on the potential of this approach is not as straightforward as we might hope. We perform the inverse-optimum inference on U.S. tax policy from 1979 through 2010 and argue that the results either undermine the normative relevance of the approach or challenge conventional assumptions upon which economists routinely rely when performing welfare evaluations.

Notes:

Print version record

January 2016.