Transfers, Taxes, and the NAIRU

Just as war is too important to be left to the generals, the impact of taxes and transfers on the aggregate unemployment rate is too important to be left to the macroeconomists. I therefore subject the issue of how tax and transfer policy affects unemployment and aggregate supply to a detailed, microeconomic examination of the effects of individual tax and transfer program structures. This inductive approach is, I believe, likely to provide a far better guide to discovering how changes in these policies have worked through the economy than would a macroeconomic approach that ignored the programs' complexities.