I find it remarkable that virtually all of the large difference in labor supply between France and the United States is due to differences in tax systems. I expected institutional constraints on the operation of labor markets and the nature of the unemployment benefit system to be more important. I was surprised that the welfare gain from reducing the intratemporal tax wedge is so large.

Edward C. Prescott

Categorized in : Important Differences Gains

Progess, do not regress.

Edward C. Prescott

economist

In the Great Depression, employment was not low because investment was low. Employment and investment were low because labor market institutions and industrial policies changed in a way that lowered normal employment.

Edward C. Prescott

employment normal way

The purpose for a tax system is to collect needed revenue at the least cost to the people.

Edward C. Prescott

cost purpose people

There is an old maxim which states that good judgment comes from experience, and experience comes from poor judgment. I think something similar can be said of government policy, to wit: Good policy comes from experience, and experience comes from poor policy.

Edward C. Prescott

good think experience government

Of all the thankless jobs that economists set for themselves when it comes to educating people about economics, the notion that society is better off if some industries are allowed to wither, their workers lose their jobs, and investors lose their capital - all in the name of the greater glory of globalization - surely ranks near the top.

Edward C. Prescott

name globalization society people

You need a real crisis before you have reforms.

Edward C. Prescott

need you crisis real

Economists create their own worlds. We're like little gods with our artificial economics, wanting to see what happens.

Edward C. Prescott

own create see economics

It is an established scientific fact that monetary policy has had virtually no effect on output and employment in the U.S. since the formation of the Fed.

Edward C. Prescott

fact effect policy employment

The Chinese are saving like mad, but they are not getting a very good return on their savings.

Edward C. Prescott

good like mad return

At some point, the spectacular growth in China has to stop.

Edward C. Prescott

stop some china growth

Monetary policy causes booms and busts.

Edward C. Prescott

monetary-policy policy causes

In the Great Depression, employment and investment were low because labor market institutions and industrial polices changed.

Edward C. Prescott

low great great-depression depression

Despite the impression created by some economic pundits, the U.S. economy is not a delicate little machine that needs to be fine-tuned with exact precision by benevolent policymakers to keep from breaking down.

Edward C. Prescott

down some economic economy

Economic integration is the path to riches and peace.

Edward C. Prescott

integration economic path peace

Multinational companies use their technological know-how in their foreign subsidiaries, so reciprocal multinational relationships are key - they lead to a vested interest in both countries to remaining open.

Edward C. Prescott

relationships open lead key

A lot of technological capital has to be absorbed person-to-person, and that happens more quickly if countries are economically integrated.

Edward C. Prescott

capital more technological happens

In the category of economic superpowers, more is better than less - the more technology those leaders develop, the more we all benefit.

Edward C. Prescott

more better economic technology

The money is nice, but I am not in this game for the money.

Edward C. Prescott

i-am game nice money

I love creating models and coming up with explicit structures I can play with.

Edward C. Prescott

creating i-can play love

Random distributions are not good things, because people are risk-averse, and this risk adversely affects their welfare. If you get too much price uncertainty, all kinds of long-term, mutually beneficial contracts can't be entered into.

Edward C. Prescott

random good you people