In a brace of recent articles written past times smart economists, I accept read the next claim: CBO says the incentives inwards the Affordable Care Act volition cut project supply. If it does, in addition to then existent payoff volition increase.
That sounds similar reasonable, textbook economics. But I don't retrieve it is true. The work is that the logic is solely partial equilibrium. It is asset everything else constant. But that is sure enough non correct inwards the long run. Lower labor supply means lower income, which agency lower saving, which agency lower investment, which agency a lower uppercase stock, which agency lower productivity, which agency lower project demand.
Perhaps the easiest way to retrieve most this number is inwards the context of a Solow growth model. In the Solow model, the steady-state existent wage is a component of technology, the saving rate, in addition to the population growth rate. If project provide per soul all of a precipitous falls by, say, ii pct in addition to stays there, the existent wage volition ascent initally, only it volition eventually render to its quondam level. Steady-state income per soul falls past times the amount ii percent.
One final result that mightiness occur is a alter inwards the composition of project income. If the Act reduces project provide primarily amidst the low-skilled, piece non having that final result amidst the highly-skilled, in addition to then nosotros mightiness croak a alter inwards the relative payoff of skilled in addition to unskilled. But an overall increment inwards existent payoff seems unlikely. Sumber https://gregmankiw.blogspot.com/
That sounds similar reasonable, textbook economics. But I don't retrieve it is true. The work is that the logic is solely partial equilibrium. It is asset everything else constant. But that is sure enough non correct inwards the long run. Lower labor supply means lower income, which agency lower saving, which agency lower investment, which agency a lower uppercase stock, which agency lower productivity, which agency lower project demand.
Perhaps the easiest way to retrieve most this number is inwards the context of a Solow growth model. In the Solow model, the steady-state existent wage is a component of technology, the saving rate, in addition to the population growth rate. If project provide per soul all of a precipitous falls by, say, ii pct in addition to stays there, the existent wage volition ascent initally, only it volition eventually render to its quondam level. Steady-state income per soul falls past times the amount ii percent.
One final result that mightiness occur is a alter inwards the composition of project income. If the Act reduces project provide primarily amidst the low-skilled, piece non having that final result amidst the highly-skilled, in addition to then nosotros mightiness croak a alter inwards the relative payoff of skilled in addition to unskilled. But an overall increment inwards existent payoff seems unlikely. Sumber https://gregmankiw.blogspot.com/
