Transactions at non-equilibrium prices are false trades. Under standard assumptions, markets without false trading produce Pareto-efficient outputs. This paper demonstrates graphically the complications created when false trades occur, showing that quantities produced deviate from...

[Note: Earlier versions of this article appeared on SSRN under the titles 'Should We Adopt William Vickrey's Cumulative Averaging Income Tax System? Progressivity and Simplicity in Tax Reform,' and 'Should We Tax Average Income? Vickrey, Equity, and Tax Design.' They have been superseded by this...

One of the fundamental tenets of modern tax policy analysis is that we should be concerned with so-called economic efficiency. Along with equity and administrability, efficiency is widely held to be a desirable and important goal. Indeed, to some analysts, efficiency is the most important of...

The impact of the federal budget deficit on the economy is a source of continuing concern, both among macroeconomists and – even more urgently – among political decision makers. The old Keynesian consensus that budget deficits were generally good for the economy, in the sense of making it...

President Obama has come under increasingly fierce criticism for the size of the federal budget deficit, as both Democratic and Republican politicians loudly proclaim that federal spending should be cut. This article explains why such anti-deficit fervor is misguided and simplistic, and why,...

Congressional Republicans, starting in 2011, embarked upon an unprecedented strategy of budgetary brinkmanship, threatening not to increase the statutory debt ceiling by the amount necessary to accommodate their own taxing and spending decisions. Starting from the very beginning, Neil H....