What Would a Carbon Tax Do?
For the last few months, I've working with Ishan Nath, an economics graduate student at University of Chicago and the Climate Impact Lab with Michael Greenstone, to understand the impacts of carbon taxation. Our project, specifically, concerns RGGI — the Regional Greenhouse Gas Initiative, a cap-and-trade scheme in the Northeastern United States — and I wanted to post some initial results about which I am quite excited. All of the work below I did with EPA data available here.
Is Pro-Business Reform Pro-Growth?
John Cochrane and Brad DeLong are clashing over whether pro-business reforms, like making it easier for entrepreneurs to start businesses or register property, raise living standards. Using data from the World Bank's Doing Business Index, Cochrane claims that reforms that bring the U.S. to the frontier — defined as a score of 100 out of 100 from the World Bank's assessors — could double per-capita income. DeLong challenges these conclusions, pointing out they rely on a rather extreme extrapolation of a log-linear model and assertions that the relationship between ease of doing business and income is causal.