User:Colejhudson/notes/Price Theory

These notes are sourced from Glen Weyl's review of the field, which I sourced from Marginal Revolution.

What is price theory?

Glen views Price Theory as a specific form of microeconomic analysis that affords for answering simple questions about complex environments. He distinguishes it as a mode of explanation to develop answers differently than is normally done through either Empiricism or Reductionism. To concretely develop the idea, he poses the problem of "determining optimal labor income tax rates to balance equity and efficiency". Which, to quickly summarize, is the trade-off between government income and incentivizing productive workers.

He provides a definition of empiricism which seems to refer to doing research without some specific aim in mind. That is, the research is conducted without a specific goal wrt to the actaul world.

Ooo, but I like the these questions:
 * Under what conditions on primitives are tex rates optimally 0 on capital income, top labor income and cross-good substitution?
 * Under what conditions is the optimal non-linear tax rate actually linear?
 * How does the structures of taxes change when talent heterogeneity is more persistent?