Brad DeLong: Worthy reads on equitable growth, December 8-14, 2020

Worthy reads from Equitable Growth:

1. I thought that our Grantees’ Conference went very well this year. I found it well worth attending. And I think you will see why. Take a look at the line up and the broad agenda at “Equitable Growth 2021: People and Research Advancing Economic Evidence.” Here’s the teaser: “Equitable Growth … will bring together [our] grantees and stakeholders to showcase cutting-edge research from our grantees on how economic inequality affects economic growth and stability. Early and mid-career, as well as established, scholars will have a chance to give and receive feedback on their research, as well as discuss the relevance of that research in an evidence-backed economic agenda in 2021 and beyond.” And then listen to Representative Ro Khanna (D-CA), who gave a very nice closing talk for our Grantees’ Conference. Watch the video.

2. Yes. Nearly all changes in federal tax policy since 1997 have been on net very destructive. Why do you ask? Well, here’s a good reason. Read Owen Zidar and Eric Zwick, “A modest tax reform proposal to roll back federal tax policy to 1997,” in which they write: “The fiscal position of the United States was much healthier in the late 1990s than it is today. The federal government now collects 3 percent less of Gross Domestic Product than it did two decades ago, yet the nation faces a number of pressing needs for new spending, including on infrastructure, research and development, education, and healthcare. This essay draws on new research to present a modest proposal to address this problem: roll back federal tax policy to 1997. We propose a set of reforms to the individual income tax and estate tax, with particular attention to the tax treatment of “pass-through” income—profits from certain types of businesses that, for tax purposes, pass through to individual owners who then pay income tax on those profits. These reforms would raise revenues by $5 trillion over the next decade and reduce after-tax income inequality.”

Worthy reads not from Equitable Growth:

1. Here is a piece that seems now to be ill-informed about the global economic recovery. In the North Atlantic right now, there is no recovery anymore. Rather, a second dip together with another wave of mass deaths seems to be on the plate. And I do not think anybody has a handle on what is going on in large chunks of the global south. Read the Financial Times’ Editorial Board’s take on this in “The global economic recovery is dramatically uneven,” in which they write: “The IMF said in its World Economic Outlook, which was released on Tuesday, that the global economy will shrink by 4.4 per cent this year—an awful figure … [with] prospects of recovery … are far from even … China, buoyed by strong export sales and a reduction in caseloads that has enabled an economic reopening, is set to grow by 1.9 per cent this year … The U.S. and European economies, meanwhile, are still set to experience sharp contractions as a result of not being able to fully remove restrictions on movement … The United States, where the Federal Reserve and the Treasury acted swiftly to shore up financial and labour markets, will perform much better than Europe. Its economy is seen as shrinking by 4.3 per cent, compared with a deeper contraction of 8.3 per cent in the eurozone. The U.K. economy, meanwhile, is forecast to shrink by 9.8 per cent … Divergences within the major emerging markets are stark, too … India … is expected to see its economy shrink by 10.3 per cent…. The IMF’s forecasts suggest the best means … lie in mitigating the spread of the disease through successful track-and-trace policies that will enable economies to reopen more quickly, too. The virus first became widespread in China; the lead set by it and other east Asian countries in controlling it offers the best way out for the global economy.”