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Could you point me towards any discussion that’s been had about using those numbers to shape economic/monetary policy?

bb88 8y ago
I guess I would start here, and then use that as a jomping off point. https://equitablegrowth.org/hourly-piketty-paul-krugman-gattopardo-economics-economic-modelling/ https://equitablegrowth.org/hourly-piketty-paul-krugman-gatt... Part of what makes this problem hard, is if Piketty is really right, we don't necessarily know what policies we should be following. It's unclear how we change the equation at this point. Piketty seems to think that tax hikes on the rich might work. But that is really just a theory.
- gaius 8y ago
  Piketty seems to think that tax hikes on the rich might work. But that is really just a theor Intuition suggests that about half the time raising taxes (or interest rates, or whatever policy lever) might help whatever economic problem you have, and half the time cutting them is better. It’s like tuning a radio, the knob goes both ways. I am wary of these so-called economists who only have one solution to every conceivable problem. Krugman is the same, whatever the scenario, he always recommends printing more money.
  - esrauch 8y ago
    Can you justify that? It sounds like some sort of "efficient market hypothesis" but "efficient government" which isn't a phrase many people would use outside of a joke. It easily could be that the "best" tax rate for whatever set of goals is actually 10% or 40%. Then if you live in a society where the applied rates go between 20 and 30% then there's no reason to think it is rational to say "up" or "down" half the time each.
    - gaius 8y ago
      there's no reason to think it is rational to say "up" or "down" half the time each. But is it rational to say “up” every time? If so what happens when you inevitably reach 100% and have nowhere to go? And if it’s that simple then economics is solved and we can fire all the economists too. It may not be exactly half but “up sometimes, down sometimes” is far more likely to be a rational approach.
      - esrauch 8y ago
        I think you misunderstand me: the point is you can't criticize someone got saying "higher than the current rate" if they are just always advocating 40% and that is always higher than what is actually tried. They would clearly be wrong to randomly flip flop. The 100% rate you mention is clearly a strawman: we haven't even tried a 35% rate on the top people in the modern era.
  - bb88 8y ago
    > Intuition suggests that about half the time raising taxes (or interest rates, or whatever policy lever) might help whatever economic problem you have, and half the time cutting them is better. I think it's far more complicated than that. There are basically two competing models for economics, and yes while politics is involved here, both have deep philosophical arguments about the way economics works. One group believes that Government (G) intervention in the markets is bad (reduction in G spending, permanent tax cuts). The other group believes it is good (G spending on infrastructure, graduated tax code). So there's short term economics, and there's year to year economics. And now with Piketty we have generational economics. If we really don't want to return to the Gilded Age, the things we think are good in the short term, are very damaging in the long term, that might include tax cuts and G spending.

bb88 8y ago

I guess I would start here, and then use that as a jomping off point. https://equitablegrowth.org/hourly-piketty-paul-krugman-gattopardo-economics-economic-modelling/ https://equitablegrowth.org/hourly-piketty-paul-krugman-gatt... Part of what makes this problem hard, is if Piketty is really right, we don't necessarily know what policies we should be following. It's unclear how we change the equation at this point. Piketty seems to think that tax hikes on the rich might work. But that is really just a theory.

gaius 8y ago
Piketty seems to think that tax hikes on the rich might work. But that is really just a theor Intuition suggests that about half the time raising taxes (or interest rates, or whatever policy lever) might help whatever economic problem you have, and half the time cutting them is better. It’s like tuning a radio, the knob goes both ways. I am wary of these so-called economists who only have one solution to every conceivable problem. Krugman is the same, whatever the scenario, he always recommends printing more money.
- esrauch 8y ago
  Can you justify that? It sounds like some sort of "efficient market hypothesis" but "efficient government" which isn't a phrase many people would use outside of a joke. It easily could be that the "best" tax rate for whatever set of goals is actually 10% or 40%. Then if you live in a society where the applied rates go between 20 and 30% then there's no reason to think it is rational to say "up" or "down" half the time each.
  - gaius 8y ago
    there's no reason to think it is rational to say "up" or "down" half the time each. But is it rational to say “up” every time? If so what happens when you inevitably reach 100% and have nowhere to go? And if it’s that simple then economics is solved and we can fire all the economists too. It may not be exactly half but “up sometimes, down sometimes” is far more likely to be a rational approach.
    - esrauch 8y ago
      I think you misunderstand me: the point is you can't criticize someone got saying "higher than the current rate" if they are just always advocating 40% and that is always higher than what is actually tried. They would clearly be wrong to randomly flip flop. The 100% rate you mention is clearly a strawman: we haven't even tried a 35% rate on the top people in the modern era.
- bb88 8y ago
  > Intuition suggests that about half the time raising taxes (or interest rates, or whatever policy lever) might help whatever economic problem you have, and half the time cutting them is better. I think it's far more complicated than that. There are basically two competing models for economics, and yes while politics is involved here, both have deep philosophical arguments about the way economics works. One group believes that Government (G) intervention in the markets is bad (reduction in G spending, permanent tax cuts). The other group believes it is good (G spending on infrastructure, graduated tax code). So there's short term economics, and there's year to year economics. And now with Piketty we have generational economics. If we really don't want to return to the Gilded Age, the things we think are good in the short term, are very damaging in the long term, that might include tax cuts and G spending.