• Immigration
and demographics: Can high immigrant fertility explain
voter support for immigration? with Armando Lopez-Velasco (April 2017. Published
in: Macroeconomic Dynamics 23 (5),
July 2019, 1815-1837). Online
Appendix.
Abstract:
Public
pensions typically start at retirement and provide partial
funding for retirement consumption. Retirees must rely on
savings for the remainder. A pension system offering higher
benefits at the end of life would be significantly more
efficient. In an optimal system, retirees first rely entirely on
their savings, and then public pensions pay for all retirement
consumption. The system's funding level determines the age(s) of
pension eligibility, which may vary by income if progressivity
is desired. An implication is that pension reforms should focus
on adjusting the pension age, with advance notice, while
maintaining high replacement rates.
Economic Consequences of Rising U.S.
Government Debt: Privileges at Risk
Documents: Working
Paper (first posted April 2010, revised July 2011)
Now published in: Finanzarchiv/Public Finance Analysis, vol. 67:3
(2011), pp. 282-302.
Abstract: The rapidly growing federal government debt has become a
concern for policy makers and the public. Yet the U.S. government
has seemingly unbounded access to credit at low interest rates.
Historically, Treasury yields have been below the growth rate of
the economy. The paper examines the ramifications of debt
financing at low interest rates. Given the short maturity of U.S.
public debt – over $2.5 trillion maturing in 2010 – investor
expectations are critical. Excessive debts justify reasonable
doubts about solvency and monetary stability and thus undermine a
financing strategy built on the perception that U.S. debt is safe.
Calculation of a Population Externality
Documents: Working
paper - includes appendix (Sept. 2014).
Now published in: American Economic Journal: Economic Policy,
2015, 7(2): 61–87, http://dx.doi.org/10.1257/pol.20130012
Harford (1997, 1998, 2000) shows that when people generate
externalities, a birth also generates an externality and
efficiency requires a Pigovian tax/subsidy on having children. The
size of the population externality is important for studying
policy. We calculate the size of the externality in a specific
case. We consider the possibility that greenhouse gas emissions
turn out to be a serious problem and assume government reacts by
restricting emissions. This converts the population externality to
a form that can be evaluated from existing data without relying on
detailed assumptions about the environment. Calculated population
externalities are large enough to matter for policy.