Sunday, October 10, 2010

UWC will Gregory Mankiw work less?


I am confused as to why he would overlook the income effect and only discuss the substitution effect of higher rates.  If he wants to provide his children with college educations and down payment for homes, then until these are covered with relative certainty, wouldn't the higher taxes possibly motivate him to work more?

He obviously know this.  So what are his incentive for writing an article that he knows misses an obvious part of the analysis?

UWC does Gregory Mankiw write articles that appeal to idealogical readers despite him knowing the holes in his logic?

I guess, if he is paid he can work less.

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