Public Finance
Economics 130
Professor Stuart, Fall 2007
North Hall, 2046. Hours: TR 10:15-11:15. Phone: 893-4791.

The reading list is:

General Equilibrium

Harberger, A., "The Incidence of Corporate Income Tax," JPE, 1962.
Shoven, J., "The Incidence and Efficiency Effects of Taxes on Income from Capital," JPE, 1976.

Welfare Measures

Harberger, A., "Three Basic Postulates for Applied Welfare Economics," JELit, 1971.
Diamond, P. and D. McFadden, "Some Uses of the Expenditure Function in Public Finance," JPubE, 1974.
Browning, E., "The Marginal Cost of Public Funds," JPE, 1976.
Stuart, C., "Welfare Costs per Dollar of Additional Tax Revenues in the U.S.," AER, 1984.

Optimal Taxation

Sandmo, A., "Optimal Taxation: An Introduction to the Literature," JPubE, 1976.
Diamond, P. and J. Mirrlees, "Optimal Taxation and Public Production," AER, 1971.
Atkinson, A. and N. Stern, "Pigou, Taxation, and Public Goods," REStud, 1974.
Mirrlees, J., "An Exploration in the Theory of Optimum Income Taxation," REStud, 1971.
Sheshinski, E., "The Optimal Linear Income-tax," REStud, 1972.
Diamond, P., "Optimal Income Taxation: An Example with a U-Shaped Pattern of Optimal Marginal Tax Rates," AER, 1998.
Cooter, R. and E. Helpman, "Optimal Income Taxation for Transfer Payments," QJE, 1974.
Fullerton, D., "Economic Levies and Distorionary Taxation: Comment," AER, 1997.

Taxes and Labor

Boskin, M., "Efficiency Aspects of the Differential Treatment of Market and Household Economic Activity," JPubE, 1975.
Stuart, C., "Swedish Tax Rates, Labor Supply, and Tax Revenue," JPE, 1981.
Fullerton, D., "On the Possibility of an Inverse Relationship Between Tax Rates and Government Revenues, JPubE, 1982.
Eissa, N. and J. Leibman, "Labor Supply Response to the Earned Income Tax Credit," QJE, 1996.

Taxes and Saving

Modigliani, F., "Life-Cycle, Individual Thrift, and the Wealth of Nations," AER, 1986.
Davies, J., "Uncertain Lifetime, Consumption, and Dissaving in Retirement," JPE, 1981.
Kotlikoff, L. and L. Summers, "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," JPE, 1981.
Söderström, L., "The Life Cycle Hypothesis and Aggregate Household Saving," AER, 1982.
Hubbard, G., J. Skinner, and S. Zeldes, "Precautionary Saving and Social Insurance," JPE, 1995.
Altonji, J., F. Hayashi, and L. Kotlikoff, "Parental Altruism and Inter Vivos Transfers: Theory and Evidence," JPE, 1997.
Boskin, M. "Taxation, Saving, and the Rate of Interest," JPE 1978.
Summers, L., "Capital Taxation and Accumulation in a Life-Cycle Growth Model," AER, 1981.
Feldstein, M., "The Welfare Cost of Capital Income Taxation," JPE, 1978.
Chamley, C., "The Welfare Cost of Capital Income Taxation in a Growing Economy," JPE, 1981.
Starr-McCluer, M., "Health Insurance and Precautionary Saving," AER, 1996.
Gruber, J., "The Consumption Smoothing Benefits of Unemployment Insurance," AER, 1997.
Hubbard, G. and J. Skinner, "Assessing the Effectiveness of Saving Incentives," JEPerspectives, 1996.

Taxes and Investment

Auerbach, A., "Taxation, Corporate Financial Policy, and the Cost of Capital," JELit, 1983.
Bradford, D. and D. Fullerton, "Pitfalls in the Construction and Use of Effective Tax Rates," in Hulten (ed),
Depreciation, Inflation, and the Taxation of Income from Capital, Urban Institute, 1981.
King, M. and D. Fullerton, The Taxation of Income from Capital, NBER, 1984.
Harberger, A., "Efficiency Effects of Tax on Income from Capital," in Effects of Corporation Income Tax, M. Krzyzaniak, ed., Wayne State University Press.
Gravelle, J. and L. Kotlikoff, "The Incidence and Efficiency Costs of Corporate Taxation When Corporate and Noncorporate Firms Produce the Same Good," JPE, 1989.

Open or Closed Economy?

Feldstein, M. and C. Horioka, "Domestic Savings and International Capital Flows," EJ, 1980.

Tax Reform

Easterly, W. and S. Rebelo, "Fiscal Policy and Economic Growth," JMonetaryE, 1993.
Judd, K., "The Welfare Cost of Factor Taxation in a Perfect-Foresight Model," JPE, 1987.
Auerbach, A. and L. Kotlikoff, Dynamic Fiscal Policy, Cambridge Univ. Press, 1987.
Burman, L. and W. Randolph, "Measuring Permanent Responses to Capital-Gains Tax Changes in Panel Data," AER, 1994.
Engen, E. and W. Gale, "Consumption Taxes and Saving: The Role of Uncertainty in Tax Reform," AER, 1997.

Tax Avoidance

Feldstein, M., "The Effect of Marginal Tax Rates on Taxable Income: A Panel Study of the 1986 Tax Reform Act," JPE, 1995.
Dickert-Conlin, S. and A. Chandra, "Taxes and the Timing of Births," JPE, 1999.

Social Security

Feldstein, M., "Social Security, Induced Retirement, and Aggregate Capital Formation," JPE, 1974.
Cooley, T. and J. Soares, "A Positive Theory of Social Security Based on Reputation," JPE, 1999.

Political Economy

Meltzer, A. and S. Richard, "A Rational Theory of the Size of Government," JPE, 1981.
Alesina, A. and E. Spolaore, "On the Number and Size of Nations," QJE, 1997.

Private Provision of Public Goods

Warr, P., "Pareto Optimal Redistribution and Private Charity," JPubE, 1982.
Warr, P., "The Private Provision of Public Goods is Independent of the Distribution of Income," EconLetters, 1983.
Bernheim, D. "On the Voluntary and Involuntary Provision of Public Goods," AER, 1986.

Inflation and Taxation

Bailey, M., "The Welfare Cost of Inflationary Finance," JPE, 1956.
Friedman, M., "Government Revenue from Inflation," JPE, 1971.