In the second MAE Distinguished Speaker Lecture, Professor Richard Blundell of University College London talked about “Empirical Evidence and Tax Reform”

The lecture’s starting point was the Mirrlees Review that brought together a high-profile group of international experts to identify the characteristics of a good tax system for any developed economy in the 21st century. Professor Blundell described a broad set of descriptive statistics that are essential for understanding modern taxation, including male and female working patterns, the makeup of the modern welfare system and changes in inequality. Based on his recent research, he then discussed how one can estimate the impact of different programs, viewing the welfare and taxations systems as part of a unified system.

Sir Richard Blundell is the David Ricardo Professor of Political Economy at University College London. He is the Director of the Economic and Social Research Council (ESRC) Centre for the Microeconomic Analysis of Public Policy and of the Institute for Fiscal Studies, both in the United Kingdom. He has made lasting contributions to labor economics, public finance, and applied econometrics. His research covers the empirical microeconomic study of consumer behavior, savings, labor supply, taxation, welfare, innovation and inequality. Among other works, he has developed econometric methods for intertemporal decisions over labor supply, human capital and consumption, family labor supply behavior, dynamic panel data models, and nonparametric analysis of individual decisions.

Blundell is the recipient of many prestigious honors and awards including the Yrjö Jahnsson Prize (1995) for his work in microeconometrics and the analysis of labor supply, welfare reform and consumer behavior; the Econometric Society Frisch Prize Medal (2000) for the paper “Estimating Labor Supply Responses Using Tax Reforms;” the Jean-Jacques Laffont Prize (2008) given to a high-level economist whose research combines both the theoretical and applied aspects of economics; the CES-Ifo Prize (2010); the Sandmo Prize (2011); the IZA Prize in Labor Economics (2012); the BBVA Foundation Frontiers of Knowledge Prize in Economics (2015); and the Erwin Plein Nemmers Economics Prize (2016). He was knighted in the 2014 Queens New Years Honours list for his services to Economics and Social Science.

He has served as president of the European Economics Association, the Econometric Society, the Society of Labor Economics and the Royal Economic Society. He is a fellow of the Econometric Society, the British Academy and the Institute of Actuaries and an Honorary Member of the American Economic Association and the American Academy of Arts and Sciences.

Simon Board

The winner of the Warren C. Scoville Distinguished Teaching Award  for Fall 2016 is Simon Board.

Professor Board teaches Econ 106T: The Economics of e-Commerce and Technology. The class uses tools from game theory to study business strategy, including topics such as platform markets, innovation and reputation. The course then uses these insights to discuss recent cases like Uber, Square and Zillow, where new technology is disrupting traditional business models.

The following is from the San Diego Tribune

Trump policies not good for growth, says UCLA economist

On the eve of inauguration day, UCLA economist Lee Ohanian told a local audience Wednesday that President Donald Trump’s policies may not achieve his desired levels of economic growth and job gains.

Speaking to the San Diego Regional Chamber of Commerce’s annual cross-border vision lunch, Ohanian said restricting immigration, erecting trade barriers and imposing new import tariffs, as Trump has proposed, are just the opposite of what is needed.

“One thing that came from President-elect Trump was the trade deals weren’t working for us,” Ohanian said.

But he said numerous economic studies show that the average household actually benefits to the tune of $10,000 a year in lower prices paid for imported goods.

“That statistic suggests maybe they are working for us,” he said.

One example of counterproductive trade policy? Ohanian points to U.S. subsidies and import quotas for the sugar industry that date to the 1790s. American sugar prices range between 100 and 180 percent of world levels, he said, and consequently, candy makers have relocated to Canada where sugar costs less.

“For every sugar job we saved, we lost three confectionery jobs,” he said. “These are the types of indirect effects economic policies often have.”

On immigration, Ohanian said while Trump’s focus has been on keeping out unskilled, undocumented workers, it is the high-skilled workers the U.S. should be going after. He noted that half the Fortune 500 companies were founded by an immigrant or the child of an immigrant.

He also noted that many high-skilled immigrant workers are educated at UC San Diego, UCLA and other universities and then managed to stay legally in the U.S. to work.

Many others wish they could remain here permanently after graduation but unless they can exchange their student visas for work visas, they have to return to their home countries — and the U.S. economy loses out.

“We don’t make it very easy for them to do that,” he said.

Ohanian said Trump would like to create 25 million jobs over the next 10 years and double the GDP growth rate to 4 percent. But with the accelerating retirement rate of aging baby boomers and the declining educational attainment levels in American schools, he said a looming talent gap could make those goals unattainable.

“The only way we can replace those (productive workers) is by bringing in more people,” he said.

Fifty years ago, he said American education and California’s in particular were at or near the top of the  world. High educational achievement translated into high productivity. But now in the U.S. 15-year-olds repeatedly rate below their peers in many other countries — a situation that bodes ill for future economic success.

“Since 2009 that’s really been the main challenge our country faces,” he said. “In particular this is going to confront our younger people, and the main challenge that faces President-elect Trump and Congress, as well as state and local government, is to improve productivity growth.”

Ohanian, who was an adviser to previous Republican presidential candidates, called NAFTA  a “great piece of legislation”  that reduced trade barriers with Canada and Mexico. But if NAFTA is renegotiated as Trump hopes, he said one benefit that Mexico might push for is an expansion of free-trade zones along the U.S. border.

“That would get more U.S. capital going to Mexico — and Mexico has a very bright economic future,” Ohanian said.

Trump speaks of bringing back manufacturing jobs from abroad. But Ohanian said the new reality in today’s world is that certain things can be manufactured at a lower cost outside  the U.S.  American workers can compete by demonstrating a higher productivity rate on other things here.

However, he did agree with Trump’s call for lowering corporate income taxes.

“That’s one of the reasons why we’re losing a lot of jobs,” he said, since companies find it more economical to expand where rates are lower.

As Trump settles into the White House, Ohanian said he hopes the new president will listen to his advisers and change course if necessary.

“I hope Trump is a guy that can pivot and change if something isn’t working the way he wants,” he said.

Adriana Lleras-Muney

On January 9th, President Obama named Adriana Lleras-Muney as a recipients of the Presidential Early Career Awards for Scientists and Engineers (PECASE), the highest honor bestowed by the United States Government on science and engineering professionals in the early stages of their independent research careers.

“I congratulate these outstanding scientists and engineers on their impactful work,” President Obama said. “These innovators are working to help keep the United States on the cutting edge, showing that Federal investments in science lead to advancements that expand our knowledge of the world around us and contribute to our economy.”

Lleras-Muney is a Professor of Economics, whose research is funded by the Department of Health and Human Services and other agencies. In her recent research, published in 2016, Lleras-Muney and her co-authors documented that cash transfers given to poor women early in the 20th century led to substantial improvements in lives of their children, who obtained more education, had higher incomes and lived longer lives as a result. This was the first paper estimating the lifetime causal effects of anti-poverty cash programs on children growing up in poverty. This project is continuing to investigate how the behavior of mothers was affected by the transfers, whether they remarried, who they remarried and how the transfers affected their participation in the labor force and ultimately their mortality. In other work Lleras-Muney is investigating the long term effects of New Deal programs implemented during the Great Recession. This research aims to provide evidence on the full costs and benefits of government policies designed to help those in need.

Read the official White House announcement