tag:blogger.com,1999:blog-4979477022008569617.post6867503698526382087..comments2023-05-02T06:38:35.510-07:00Comments on Roger Farmer's Economic Window: Sam and Janet go to CollegeRoger Farmerhttp://www.blogger.com/profile/05213844698773859392noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-4979477022008569617.post-66276671462843313422015-02-23T05:28:40.913-08:002015-02-23T05:28:40.913-08:00It doesn't require that assumption, because in...It doesn't require that assumption, because in my example all the individuals pay tax and still some have more money because it came from the legacy of the debt spending.<br /><br />However the taxation and debt repayment in my example there, is actually an unnecessary complexity to the example , a more concise illustration is this -<br /><br />The government borrows £1 Billion from the central bank and pays that to its employees. 30 years later, even if the debt is not repaid there is still an effect on how money is distributed amongst the individual members of the population as some people have more money due to receiving the debt spending money by the process of inheritance or commerce, and others do not.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-4979477022008569617.post-24938106732166043572015-02-20T08:35:54.545-08:002015-02-20T08:35:54.545-08:00This assumes that the heirs of government spending...This assumes that the heirs of government spending through inheritance or commerce are not taxpayers. That's an excellent argument for higher taxes on commerce and a high inheritance tax. Saving money is less of a civic virtue when it is seen for what it is, taking money from those less fortunate who have to pay taxes.<br />Kaleberghttps://www.blogger.com/profile/05283840743310507878noreply@blogger.comtag:blogger.com,1999:blog-4979477022008569617.post-55162236645155544092015-02-20T06:27:40.264-08:002015-02-20T06:27:40.264-08:00Hello Professor Farmer,
I read some of the articl...Hello Professor Farmer,<br /><br />I read some of the articles that looked interesting relative to the questions that I have.<br /><br />Unfortunately, they do not address my concerns. I explain what criteria I am using, and why the papers listed do not meet them, in<br /><br />http://www.bondeconomics.com/2015/02/further-comments-on-apparent.html<br /><br />I recognise that I am unaware of the full breadth of the OLG literature. Unfortunately, I do not have access to an academic library, so I have had to work with a few textbooks (not yours, at least not yet) as well as articles in the public domain.<br /><br />A very brief summary:<br /><br />- It is my opinion that we can draw insights from models with long time increments, as they do not correspond to the actual policy choices faced in the real world. (I recognise that academic economists would disagree.)<br /><br />- I am aware of frameworks such as Kotlikoff, with a finer-grained time step. In my opinion, those are accounting frameworks, and all of the interesting economic variables are exogenous.<br /><br />I do not want to post too long a comment, so I will let anyone who wants a better explanation read my article.<br /><br />Once again, thanks for the response, and the references.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.comtag:blogger.com,1999:blog-4979477022008569617.post-47567384714151367892015-02-17T01:18:53.334-08:002015-02-17T01:18:53.334-08:00Hi Roger,
Here is a concise example showing the t...Hi Roger,<br /><br />Here is a concise example showing the the burden on the future generation of tax payers.<br /><br />The government borrows £1 Billion from the central bank and pays that to its employees . 30 years later the government repays that debt by taxing the then current generation of tax payers. The result is the heirs of the government spending through inheritance or commerce have more money and the tax payers have less money.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-4979477022008569617.post-85528797689542071692015-02-15T20:32:51.422-08:002015-02-15T20:32:51.422-08:00Brian
The time scale is not the issue. All of the ...Brian<br />The time scale is not the issue. All of the quantitative work that uses the OLG model is based either on models with seventy period lives or with the Blanchard model linked in my blog that is in continuous time.Roger Farmerhttps://www.blogger.com/profile/05213844698773859392noreply@blogger.comtag:blogger.com,1999:blog-4979477022008569617.post-81567444896676347252015-02-15T14:00:23.252-08:002015-02-15T14:00:23.252-08:00Hello,
Thanks for the lengthy response to my earl...Hello,<br /><br />Thanks for the lengthy response to my earlier comment. I will have to take a look when I have more time. I hope to be able to give a longer response where I explain my comments and/or ask questions in more detail. Since I do not want to put a 1000 word comment here, I will probably post it on my blog.<br /><br />But to give an example of a problem that I hinted at, imagine that the time step within a 3-period lifetime model corresponds to 20 years. It is reasonable to for individuals to treat the average price level in the current quarter or month as being a well defined quantity. But how do I mentally relate the average price level of a 20-year interval (with the current time being at some arbitrary offset within that interval), to the average price in the following 20-year interval? But if I cannot do this, the accounting constructs within the models break down.<br /><br />This may or may not be dealt with by finer time scales (e.g. annual), but from what I have seen of those models, those finer time scales come at the cost of losing the ability to simulate other components of the economy.Brian Romanchukhttps://www.blogger.com/profile/02699198289421951151noreply@blogger.com