Edward Conard

Top Ten New York Times Bestselling Author

  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
Upside of Inequality Unintended Consequences Oxford
BUY THE BOOKS
  • Macro Roundup
  • Highlights
  • Blog
  • OpEds
  • Reviews
  • About
    • About the Author
    • About the Books
    • Read Excerpts
    • Read the Reviews
    • Debates
    • Media and TV
  • Topics
    • All Media Appearances
    • Productivity
    • Monetary Policy
    • Banking
    • Politics
    • Upside endnotes
    • Stuff Ed’s Assistant Thought He Might Like
  • Contact
  • twitter
  • facebook
  • youtube
  • linkedin
  • Advanced SearchChoose Categories To Search Within
    • Close Advanced Search
Edward Conard

Advanced Search

Higher Taxes Reduce Work Effort

In today’s WSJ, Stanford’s Ed Lazear argues that higher taxes reduce work effort. I argue that lower payoffs for risk-taking also reduce risk-taking, which gradually slows growth.

Risk-taking produces innovation, like Google and Facebook. Cutting-edge companies, like Google and Facebook, give workers more valuable on-the-job training and a richer set of investment opportunities than they can find elsewhere, which make these workers more productive. Experts also coalesce into synergistic communities, like Silicon Valley, that increases their productivity. Their knowledge spills over to the rest of the economy and makes it more productive. This positive feedback loops gradually raises the risk-adjusted payoffs for risk-taking, which, in turn, increases risk-taking and work effort. The U.S., for example, has produced $411 billion of unicorns—privately held startups valued at over $1 billion—8 times more than Europe. These magnifying effects accumulate gradually over decades. It takes a long time to build the institutions and train the workforce needed for faster productivity growth.

WSJ_A Burden on Industry

Share this:

  • Click to share on Twitter (Opens in new window)
  • Click to share on Facebook (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to print (Opens in new window)
  • Click to email a link to a friend (Opens in new window)

© Copyright 2023 Coherent Research Institute · All Rights Reserved

 

Loading Comments...