Content Type: Journal Article / Political Geography: Global Focus / Publication Year: within 10 Years and within 3 Years / Journal: The Cato Journal / Topic: Economics

Author:: Meir Kohn
Publication Date:: 10-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: As a profession, economics is thriving. The number of economists is large and growing. The volume of their output is exploding—more articles are published each year in a growing number of journals. As a science, however, economics is not doing so well. The questions addressed by all those articles seem to be getting smaller and smaller. And there seems to be little or no progress on the big questions of economics such as economic development and growth, economic fluctuations, and the proper role of government in the economy. Most of the articles published are econometric, and the results of many are of questionable quality.
Topic:: Economics, Research, Economic Theory, and Commerce
Political Geography:: Global Focus

Author:: Martin Hutchinson and Kevin Dowd
Publication Date:: 10-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Robert Banks Jenkinson, 2nd Earl of Liverpool (“Liverpool,” 1770–1828) was UK prime minister over the period 1812–1827. His achievements were remarkable. He designed the financial attrition strategy that defeated Napoleon; led the United Kingdom through the turbulence of the takeoff stage of the industrial revolution; inherited a daunting fiscal situation that included a debt/GDP ratio of well over 200 percent, and implanted the austerity measures needed to put this ratio onto the path that led to later Victorian levels; reformed the currency; pushed through the return to the gold standard; promoted both the Corn Laws and free trade; successfully managed the 1825 financial crisis, the worst in over a century; and pushed through subsequent reforms that put the UK banking system onto a stable trajectory that lasted into the late 20th century.
Topic:: Agriculture, Economics, Fiscal Policy, and Trade
Political Geography:: Global Focus

Author:: Pál Czeglédi, Brad Lips, and Carlos Newland
Publication Date:: 10-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Two hundred forty‐five years after the publication of Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, economists continue to debate the causes of disparities in wealth among the countries of the world. Some scholars focus on the role of climate, natural resources, proximity to markets, or access to technology. Others study human capital, capital accumulation, the use of comparative advantages and economies of scale, and institutional and legal frameworks. We believe that another factor must be considered as well: the economic attitudes and causal beliefs (henceforth, “mentality”) of the population. While a growing body of research shows a clear association between economic growth and the institutions of economic freedom, those institutions can be quite fragile if the population does not have a clear understanding of what makes a country prosperous. To measure popular attitudes toward economic values, we have created the Global Index of Economic Mentality (GIEM).
Topic:: Economics, Markets, Capitalism, Youth, and Free Market
Political Geography:: Global Focus

Author:: Edoardo Beretta and Doris Neuberger
Publication Date:: 10-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: There is significant economic literature investigating the hostility to cash or “war on cash” (Beretta 2005, 2007; Deutsche Bundesbank 2017; Jain 2017; Scott 2013; White 2018) by which financial institutions supported by governments discourage individuals from using (publicly issued) physical means of payments and convince them to move to digital (privately issued) ones.
Topic:: Economics, COVID-19, Digitization, and Cash
Political Geography:: Global Focus

Author:: Alan Reynolds
Publication Date:: 01-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: Estimates of the elasticity of taxable income (ETI) investigate how high‐income taxpayers faced with changes in marginal tax rates respond in ways that reduce expected revenue from higher tax rates, or raise more than expected from lower tax rates. Diamond and Saez (2011) pioneered the use of a statistical formula, which Saez developed, to convert an ETI estimate into a revenue‐maximizing (“socially optimal”) top tax rate. For the United States, they found that the optimal top rate was about 73 percent when combining the marginal tax rates on income, payrolls, and sales at the federal, state, and local levels. A related paper by Piketty, Saez, and Stantcheva (2014) concluded that, at the highest income levels, the ETI was so small that comparable top tax rates as high as 83 percent could maximize short‐term revenues, supposedly without suppressing long‐term economic growth. Such studies could be viewed as part of a larger effort to minimize any efficiency costs of distortive taxation while maximizing assumed revenue gains and redistributive benefits.
Topic:: Economics, History, Tax Systems, and High-Income People
Political Geography:: North America, Global Focus, and United States of America

Author:: Jesús Fernández‐Villaverde
Publication Date:: 06-2021
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The monetary arrangements of societies are the result of the interplay of technology and ideas. Technology determines, for example, which coins can be minted and at what cost. For centuries, minting small‐denomination coinage was too costly to induce Western European governments to supply enough small change (Sargent and Velde 2002). Only the arrival of steam‐driven presses fixed this problem (Doty 1998). Simultaneously, ideas about private property and the scope of government determined whether private entrepreneurs were allowed to compete with governments in the supply of small change (Selgin 2008). Technology and ideas about money engage dialectically. Technological advances shape our ideas about money by making new monetary arrangements feasible. Ideas about desirable outcomes direct innovators to develop new technologies.
Topic:: Economics, Science and Technology, Monetary Policy, and Cryptocurrencies
Political Geography:: Europe and Global Focus

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