New NBER Working Papers Out

Just as an FYI, there's a new issue of NBER's Digest Online and has summaries for the latest working papers.

As always, great stuff. The ones I'll be spending my $5 on:

Effects of Taxes on Labor Income:

Second, countries with high tax rates on labor income and consumption expenditures have relatively generous tax-funded programs for social security, disability insurance, sick leave assistance, unemployment insurance, and general assistance. The benefit sides of these programs also alter labor supply incentives in ways that discourage market work activity and increase employment in the underground economy. To the extent that government spending on these programs responds to the availability of tax revenues, the full response to differences in taxing capacity must take into account the indirect effects that show up through the expenditure side of government behavior. Conceivably, the indirect expenditure effects are larger than the direct effects of taxes.

Democracy, Dictators, and Growth:

"[I]nstitutions have only a second order effect on economic performance," conclude the authors. "The first order effect comes from human and social capital, which shape both institutional and productive capacities of a society." They argue that this conclusion has important implications for economic thinking and policy. First, research on institutional economics should focus on actual rules rather than fuzzy assessments of institutional outcomes. Second, the results offer no support to the view that democracy and constraints on government are preconditions for economic development.

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This page contains a single entry by published on December 13, 2004 2:47 PM.

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