Three Important Themes: Taxation of Capital Income, Behavioral Economics in Equilibrium Analyses, and Systemic Risk
5 Pages Posted: 12 Aug 2011
Date Written: 2010
I identify three areas of research that are important and have large potential payoffs. In all three areas I focus on needs and opportunities for theoretical analyses, since these are areas and research methods with which I am familiar, without any intention to underplay the importance as well of other research inputs, including empirical and experimental work. The first, optimal taxation of capital income is an area of steadily advancing normal science that is making significant progress. The other two, incorporating behavioral economics into equilibrium analyses and understanding systemic risk, are more foundational.
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