Suggest one way in which generational imbalances might be understated and one way in which they might be overstated.
Answer to relevant QuestionsWhat is the intuition behind the notion of Ricardian equivalence? How might you look for evidence to test the suggestion that people account for future generations’ tax burdens by saving more today? Table 4-1 in the textbook shows the remarkable difference across generations in their likely net tax payments to the federal government. What is responsible for these large intergenerational differences? What is meant by dynamic scoring of the budget? Why does dynamic scoring potentially lead to more realistic estimates of the “true” effective size of a budget deficit? What are some methodological issues involved in ...Why do governments sometimes impose quantity regulations that limit the level of negative-externality-inducing consumption? Why do governments sometimes impose price regulations by taxing this consumption? Some people were concerned that the 1990 amendments to the Clean Air Act (CAA) would generate “hot spots” of pollution—localized areas with very high concentrations of pollutants. Why might the amendments lead to such ...
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