Foundations of Supply-Side Economics

Preface

Introduction

Chapter 1 Tax Rates, Factor Employment, Market Production, And Welfare


1. The Model


2. Taxation and Market Activity


3. Taxation and Revenue


4. The Tax Structure, Market Output, and Welfare


5. The Empirical Relevance of the Prohibitive Range


6. Some Numerical Examples


7. Conclusion

References

Chapter 2 Taxation In A Closed Economy Intertemporal Model With A Variable Supply Of Labor To The Market Sector

Introduction


1. The Model


2. The Government Sector


3. Long-Run Effects of Taxes


4. A Special Case


5. Welfare Ranking of the Tax Policies


6. Concluding Remarks

References

Chapter 3 A Neoclassical Model Of Fiscal Policy, Employment, And Capital Accumulation


1. The Model


2. Comparative Statics of the Individual's Maximization Problem


3. Government Fiscal Policies


4. General Equilibrium


5. Summary

Appendix A. Evaluation of Changes in h*1+1

Appendix B. Further Assumptions Behind the Theoretical Model and Resulting Implications Concerning the Existence of Bequests

Appendix C. Steady-State Effects of Taxation on Factor Employment in a Cobb-Douglas World

References

Chapter 4 The Revenue Effects Of The Kennedy Tax Cuts


1. A Simple Model


2. Historical Antecedents of the Laffer Curve


3. Existing Empirical Evidence on Tax Rates, Economic Activity, and Tax Revenues


4. Time-Series Estimates


5. Effects on Other Economic Variables


6. Tranfer Function Estimates


7. Conclusions

Appendix

References

Chapter 5 Fiscal Policy And The Labor Market


1. Introduction


2. The Supply of Labor


3. The Demand for Labor


4. Empirical Implementation of the Model


5. Simulation of the Model


6. Summary

Appendix

References

Chapter 6 Εstimates Of Effective Marginal Tax Rates On Factor Incomes


1. Introduction


2. Some Caveats


3. The Nature of Available Data


4. A Hypothetical Tax Structure


5. Relation of Hypothetical Tax Structure to Available Data


6. Some Remaining Issues


7. Alternative Tax Rate Series


8. Behavior of Tax Rates Over Time


9. Uses of Components of Tax Rates


10. Summary

References

Chapter 7 Government Fiscal Policy And Private Capital Formation—Some Aggregate Time-Series Estimates


1. Introduction


2. The Hypotheses to Be Tested


3. Methodology


4. Identification, Estimation, and Diagnostic Checks of Transfer Function Models


5. Choice of a Government Spending Variable


6. The Data


7. Univariate Time-Series Models for Exogenous Variables


8. Transfer Function Models for INVS


9. Transfer Function Models for INVE


10. Comparison of Results for INVS and INVE


11. Results for Selected Subperiods


12. Conclusion

Appendix

References

Chapter 8 What Does A Tax Cut Do?


1. Introduction


2. Econometric Specifications of the Model


3. Some Econometric Issues


4. An Empirical Model of the U.S. Economy


5. Discussion of the Estimates


6. Policy Analysis

Appendix

References

Chapter 9 Persistent Growth Rate Differentials Among States In A National Economy With Factor Mobility


1. The Model


2. Some Theoretical and Empirical Caveats


3. Empirical Evidence: The States' Performance


4. Summary and Conclusions

Appendix A. Data Sources

Appendix B. Derivation of States' Personal Income

Appendix C. The States' Performance Relative to Their Region: The Seemingly Unrelated Regression Estimates

References

Chapter 10 The Missing Equation: The Wedge Model Alternative

Introduction


1. The IS-LM Framework


2. A More General Model


3. The IS Curve Revisited


4. The Effects of Government Expenditures


5. The Effects of Nonneutral Taxes


6. Deficit Financing: The Money and Bond Markets


7. Concluding Remarks

References

Index