I’ve run across some cool things recently, thought I would share a few.
1. Olympic tax deduction. My students pointed me to Planet Money a few months back, and it’s really well done. Here they take an issue we talk about in class (slides 89ff: taxes should have low rates, broad base) and make it not only clear, but interesting: Should income from getting an Olympic medal be exempt from tax? The answer (check your class notes): No! Why? Because then you have to tax everything else at a higher rate to collect the same amount of revenue. Read the post, it’s beautifully done.
2. Institutions. Another theme of the Global Economy course is institutions: countries do well when they have economic and political arrangements that allow people with good ideas to develop them, otherwise not so much. Mitt Romney (or more likely his team) set this up by comparing Israel to Palestine, generating what passes for excitement in August of an election year. I should be clear here: If Mitt or Barack or even Angelina mentions anything I do, even incorrectly, I’ll be thrilled. And my mother will be even more thrilled. In this case, Mitt brought attention to an important issue. I thought the best response came from Acemoglu and Robinson, two good people with the foresight to have a book on the topic.
3. International capital flows. My colleague Paul Wachtel has a nice post with Moritz Schularick about the roots of US capital inflows: Why the US is a net borrower from the rest of the world. It’s a good read.