National Bureau of Economic Research

Damon Jones and Robert Moffitt, editors.

This volume presents new research on taxation, transfer programs, and related issues. Karen Dynan and Douglas Elmendorf examine the potential impact of automatic fiscal stabilizers on fiscal policy and economic activity. They find that a stabilizer providing direct payments could have produced faster unemployment decline after the Great Recession without raising inflation, and much lower inflation after COVID at the cost of a slower…

Governments worldwide are spending billions to attract electric vehicle (EV) and battery manufacturing to their shores. The US Inflation Reduction Act, Canadian production subsidies, and European Union tariffs on Chinese EVs all aim to build domestic supply chains in an industry characterized by massive fixed costs and complex, multistage production. Average investment costs are substantial—$660 million for an EV assembly plant and $1.85 billion for a battery plant. 

In Industrial Policies for Multi-Stage Production: The Battle for Battery-Powered Vehicles (NBER Working Paper 34884), Keith Head, Thierry Mayer, Marc Melitz, and Chenying Yang develop a quantitative...

In the past decade, the widespread availability of large household- and firm-level datasets has sparked a “micro data” revolution in macroeconomics. Our research tries to understand the macroeconomic implications of this microeconomic heterogeneity by answering two key questions. First, what features of the micro data are most informative about macroeconomic outcomes? In particular, when can we find micro-sufficient statistics for these macro effects? Second, how can we make sure that our models match these moments while continuing to fit the macroeconomic data well?

In the traditional analysis of fiscal policy based on the “Keynesian cross,” the aggregate effects of government spending or transfers are determined by the marginal propensity to consume (MPC). For instance, the multiplier giving…

The US capital gains tax is realization based, which means that taxes are due when appreciated assets are sold. Critics of this approach argue that it allows asset holders, such as corporate founders, to defer their tax obligations, sometimes indefinitely. An alternative approach, taxing gains on accrual, would require asset holders to value their assets periodically and to pay tax on the gain since the last valuation. Critics of this approach argue that it could force founders to surrender ownership stakes just to pay tax bills, potentially discouraging startup formation. In Dilution vs. Risk Taking: Capital Gains Taxes and Entrepreneurship (NBER Working Paper 34512), Eduardo M. Azevedo, Florian Scheuer, Kent Smetters, and Min Yang examine how shifting from realization-based to accrual-based capital gains...

Immune checkpoint inhibitors (ICIs) are immunotherapy drugs that mobilize the patient’s immune system to detect and attack cancer cells. They are considered a breakthrough development in cancer care, but are very expensive, with a full course of treatment costing more than $150,000 per patient. In The Impact of Immunotherapy on Reductions in Cancer Mortality: Evidence from Medicare (NBER Working Paper 34317), Danea Horn, Abby E. Alpert, Mark Duggan, and Mireille Jacobson use Medicare claims data to evaluate the impact of the first ICIs on healthcare use, costs, and mortality among beneficiaries diagnosed with...