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Thursday, September 22, 2016

The action starts at minute 13:00....a preview with me and John Seater.

1 comment:

Anonymous said...

This John Seater fellow seems eminently reasonable.

From Dawson and Seater's, "Federal Regulation and Aggregate Economic Growth":

"We find that regulation added since 1949 has reduced the aggregate growth rate on average by about two percentage points over our sample period...our estimates indicate that annual output by 2005 is about 28 percent of what it would have been had regulation remained at its 1949 level."
(p. 138)

Although the sample period they measured ends in 2005, for years beyond 2005, the authors assume a constant 28% ratio of output loss relative to its counterfactual, or what could have been the nominal GDP should regulations had not been more than what they were in 1949, such that:

"In 2011, nominal GDP was $15.1 trillion. Had regulation remained at its 1949 level, current GDP would have been about $53.9 trillion, an increase of $38.8 trillion. With about 140 million households and 300 million people, an annual loss of $38.8 trillion converts to about $277,100 per household and $129,300 per person" (p. 160).

Their measure does not account for the non-production benefits of regulation. Another thing to note is, their measure omits state regulations. My word, what if states like California or New York were included? Zoning laws!

Perhaps the large loss in production in nominal terms is outweighed by things like pollution reduction, but what good has come from, say, education regulations? Or insurance for medical care laws?

Fine. Now, how do we go about getting rid of net bad regulations when there are people who are heavily incentivized to keep them place, if not to increase them as well? Do you have time to fight these people, Dr. Parker? Neither do I.

Is it time to move to somewhere like Singapore?