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Tag Archives: N. Gregory Mankiw

Industries afflicted with Baumol's Disease have slower productivity growth.

It might be tough to use statistics to judge US health care.

Among OECD countries (Organization for Economic Cooperation and Development), from 1980 to 1999, for life expectancy, the US ranked #19 and Canada was #5. However, the order flips–US #1 and Canada #4–once you exclude fatal injuries like auto accidents, suicides and murder.

Similarly, the US has had a higher infant mortality rate than Canada. The reason, though, could relate to our higher incidence of teenage pregnancies. Teenagers tend to give birth to babies with a higher mortality rate because of their lower birth weights.

You see where this is going. If a candidate defends his healthcare policy by referring to a health outcome like life expectancy or infant mortality rates, we need to be sure that the statistic actually reflects our healthcare system and not another characteristic of our society. And it even gets more complicated because we could say that we have 3 healthcare systems: Medicaid, Medicare and private insurance with a fourth on the way when statewide healthcare exchanges begin.

On which statistics would you base your your policy preferences for the US healthcare system? Or maybe we should just remember what Benjamin Disraeli (1804-1881), British Prime Minister under Queen Victoria said:

“There are three kinds of lies: lies, damned lies, and statistics.”

Election Economics Topics:

 

Sources: In this 2007 NY Times column, Harvard professor N. Gregory Mankiw looks “Beyond Those Health Care Numbers” while I also referred to this Forbes article and this econtalk podcast on misleading healthcare system statistics. Finally, for a perspective that takes us away from the stats and to the bigger ideas that are driving this election, do look at what Princeton economist Uwe Reinhardt says in his NY Times economix.com articles.

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For some smiles and econ also, the following links are fun.

It all began with Harvard’s N. Gregory Mankiw’s NY Times op-ed column on higher tax rates. Explaining, he said that $1000 wisely invested, with no taxes, became $10,000 in 30 years. By contrast, letting the Bush tax cuts expire slices that $1000 to a $523 check which other taxes further deplete. The result? In 30 years, the amount grows to $1700. Knowing that he would have considerably less to save for his children could result, he said, in writing fewer columns.

Stephen Colbert responded to Mankiw here. And, after that, Mankiw’s students replied to Colbert.

Smiling at the exchange, we can also consider the debate about tax rates and see how Dr. Mankiw’s students used demand and supply to present the impact of Colbert on their teacher.

The Economic Lesson

In Teaching Company Lecture 3, from “History of the U.S. Economy in the 20th Century,” Professor Timothy Taylor describes a roller coaster of tax rates. Starting from a top 77% rate after World World I, rates then descended more than 40%. Taylor tells us that while tax rates fluctuated considerably, tax revenue remained remarkably constant then and at other times during the 20th century.

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