Three Sides of Harberger Triangles

35 Pages Posted: 4 Feb 1999 Last revised: 12 Oct 2010

Date Written: December 1998

Abstract

Harberger triangles are used to calculate the efficiency costs of taxes, government regulations, monopolistic practices, and various other market distortions. This paper considers the historical development of Harberger triangles, the associated theoretical controversies, and the contribution of Harberger triangles to subsequent empirical work and theories of market imperfections. Prior to the publication of Arnold Harberger's papers, economists very rarely estimated deadweight losses. The empirical deadweight loss literature expanded greatly since the 1960s now quite common. Meanwhile, critical evaluation of deadweight loss estimates led to new theories of rent-seeking and other inefficiencies of economies with multiple distortions.

Suggested Citation

Hines, James Rodger, Three Sides of Harberger Triangles (December 1998). NBER Working Paper No. w6852. Available at SSRN: https://ssrn.com/abstract=144989

James Rodger Hines (Contact Author)

University of Michigan ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States

NBER

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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