{"insight":{"id":"121670436","lede":"“Welfare and output gains for a wealth tax that raises the same revenue, and which increases the tax rates on capital and land equally, are only half as large as the baseline.”","slug":"in-an-econometric-model-land-value-taxation-yields-double-the-amount-of-welfare-a","title":"In an econometric model, land value taxation yields double the amount of welfare and output gains as a wealth tax that raises the same revenue.","showTitleAsQuote":false,"epistemicStatus":"econometric","reports":[],"tags":[{"slug":"welfare","name":"Welfare","id":"23933425","lede":"

Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.

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The vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.

\n","ledeExcerpt":"Welfare refers to government-sponsored assistance programs intended to ensure that all members of society can meet their basic needs. Examples include social insurance, Medicaid, and disability insurance.\n\nThe vast majority of welfare spending goes to those who cannot actively participate in the labor market, including children, the elderly, and the disabled.","featured":true},{"slug":"gdp","name":"Gross Domestic Product (GDP)","id":"49378752","lede":"

GDP refers to the total value of a nation's production of goods and services.

\n\n

The formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas "Real GDP" adjusts that total to account for inflation.

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Simon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such "fetishization of GDP" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: "The welfare of a nation can scarcely be inferred from a measurement of national income."

\n\n

Thirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”

\n","ledeExcerpt":"GDP refers to the total value of a nation's production of goods and services.\n\nThe formula for GDP is: consumer spending (C) + business investment (I) + government spending (G) + net exports (X-M). Nominal GDP refers to the unadjusted total, whereas \"Real GDP\" adjusts that total to account for inflation.\n\nSimon Kuznets invented the notion in 1937. It has since become the guiding metric to measure not only the volume and value of national production, but the welfare of the nation. Of all the criticisms of such \"fetishization of GDP\" (Joseph Stiglitz), the simplest may be that given by Kuznets himself, who wrote: \"The welfare of a nation can scarcely be inferred from a measurement of national income.\"\n\nThirty years later, Kuznets adds: “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”","featured":null},{"slug":"growth","name":"Growth","id":"23932836","lede":"

We define growth as the expansion of wealth in society; growth is about generating a "a bigger pie".

\n\n

Amidst debates over the merits of continued growth, we begin with the idea that all else equal, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.

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But there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising improved measures that account for missing elements such as sustainability, equity, leisure time, or digital value, or constructing altogether new proxies (OECD's Better Life Index, for example), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.

\n","ledeExcerpt":"We define growth as the expansion of wealth in society; growth is about generating a \"a bigger pie\".\n\nAmidst debates over the merits of continued growth, we begin with the idea that *all else equal*, a society with growth, with more wealth, is preferable to one with less. Without growth, society becomes a zero-sum distributional game: anyone's gain is another's loss. Growth (all else equal) enables shared prosperity.\n\nBut there is broad agreement that current measures of growth, such as GDP, are inadequate to the task of providing a suitable proxy to guide further growth. Whether devising revised measures, such as Tyler Cowen's notion of wealth plus\" (GDP, plus measures of leisure time, household production, and environmental considerations), or constructing altogether new proxies (OECD's 'Better Life Index), the conversation about how best to measure, and thus drive, equitable, regenerative, socially desirable growth is a rich field of debate.","featured":true}],"sources":[{"id":"121669926","lede":"A case for responding to the economic effects of the Covid-19 crises by shifting federal tax burdens onto land value taxes. The authors develop an econometric model of the US economy, and show that raising tax rates on land, balanced by decreasing tax rates on capital and labor, can maintain current levels of expenditure and debt, while raising welfare and output.","link":"https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3954888","slug":"post-corona-balanced-budget-super-stimulus-the-case-for-shifting-taxes-onto-land","kind":"Academic Paper","title":"Post-Corona Balanced-Budget Super-Stimulus: The Case for Shifting Taxes onto Land","year":"2021-01-01","researchers":[{"id":"121669922","location":"Center for Economic and Policy Research","name":"Michael Kumhof","seoDescription":"","slug":"michael-kumhof"},{"id":"121669923","location":"Virginia Polytechnic Institute & State University - Department of Economics","name":"T. Nicolaus Tideman","seoDescription":"","slug":"t-nicolaus-tideman"},{"id":"121669924","location":"University of Missouri at Kansas City - Department of Economics ; Bard College - The Levy Economics Institute","name":"Michael Hudson","seoDescription":"","slug":"michael-hudson"},{"id":"121669925","location":"London School of Economics & Political Science (LSE) - Financial Markets Group","name":"Charles Goodhart","seoDescription":"","slug":"charles-goodhart"}]}]}}