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Recessions And The Social Safety Net: The Alternative Minimum Tax As A Countercyclical Fiscal Stabilizer, Brian Galle, Jonathan Klick
Recessions And The Social Safety Net: The Alternative Minimum Tax As A Countercyclical Fiscal Stabilizer, Brian Galle, Jonathan Klick
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As recent events illustrate, state finances are procyclical: during recessions, state revenues crash, worsening the effects of economic downturns. This problem is well known, yet persistent. We argue here that, in light of predictable federalism and political economy dynamics, states will be unable to change this situation on their own. Additionally, we note that many possible federal remedies may result in worse problems, such as by creating moral hazard that would induce states to take on excessively risky policy, both fiscal and otherwise. Thus, we argue that policymakers should consider so-called “automatic” stabilizers, such as are found in the federal …
Coasean Markets, Herbert J. Hovenkamp
Coasean Markets, Herbert J. Hovenkamp
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Coase’s work emphasized the economic importance of very small markets and made a new, more marginalist form of economic “institutionalism” acceptable within mainstream economics. A Coasean market is an association of persons with competing claims on a legal entitlement that can be traded. The boundaries of both Coasean markets and Coasean firms are determined by measuring not only the costs of bargaining but also the absolute costs of moving resources from one place to another. The boundaries of a Coasean market, just as those of the Coasean business firm, are defined by the line where the marginal cost of reaching …