Most policy recommendations to address automation call for the taxation of capital. This Pigouvian view of automation oversimplifies capital's pecuniary externality on labor. Optimal policy distorts the adoption of automating capital, rather than its accumulation, so the optimal capital tax is zero under Mirrlees taxation.
NBER Working Paper 33934
The adoption of green technology along the supply chain involves strategic complementarity, implying the need for more than a carbon price. When policy instruments are restricted, subsidies should target downstream sectors.
Revise & Resubmit, Review of Economic Studies
Typical models of directed innovation assume new technologies must start from scratch. Allowing knowledge spillovers across technologies implies that a big push is neither necessary nor desirable for the energy transition.
Revise & Resubmit, Journal of Political Economy
Spatial transfers must balance consumption smoothing against efficient migration incentives. By using dynamic incentives, the Planner can both increase consumption and lower population in poor regions, relative to the status quo.
Review of Economic Studies, Forthcoming
In a spatial economy, we characterize the welfare impact of regional productivity shocks and how it deviates from the Fogel-Hulten benchmark. Our formula recovers this benchmark whenever second-best spatial transfers are in place.