Raj Chetty ex-post

He presented a great paper (I don’t see it on his website but here’s a volatile link to Davis’ seminar page). Using just graphs and a stunningly beautiful data set from Denmark, he showed that people do, in fact, adjust their labor supply in response to tax changes (surprisingly, this is a controversy in micro). I may be a macroeconomist but I get a warm feeling in my belly when someone gives conviencing evidence that people respond to incentives.

Before the talk, I asked him about where he sees micro- and macroeconomics intersecting. He said that he likes the questions macro asks, but he believes the answers micro provides. “There’s an arbitrage opportunity for researchers to take the methods of micro and apply them to macro,” he said. Too bad I want to go the other way!

I wanted to ask him what he thought of DSGE models, but our time ran out before I could.

Also, after about two sentences explaining my research, he isolated the fundamental issue I’ve been struggling with and was able to give really useful advice. He’s more or less a genius.

1 thought on “Raj Chetty ex-post”

  1. Or rather, he showed that educated women respond to tax incentives… Single men basically just (stupidly) try to make as much money as they can regardless of the tax rate — they showed very little clumping… His research suggests an easy way to reduce wage inequality…

Comments are closed.