Wednesday, December 31, 2014


I came across this paragraph in a WaPo article about our brightest college graduates becoming banksters:
In perhaps the starkest illustration, economists from Harvard University and the University of Chicago wrote in a recent paper that every dollar a worker earns in a research field spills over to make the economy $5 better off. Every dollar a similar worker earns in finance comes with a drain, making the economy 60 cents worse off.
The paper cited is named "Taxation and the Allocation of Talent" and I read the online version but I couldn't find anything in it that supports the + $5 to - $0.60 claim.  I did find one table that shows that the 3 economists (Lockwood, Nathanson, Weyl) who wrote the paper think that finance is a drag on the non-finance economy:
The significant differences between Tea Party and Occupy Wall Street also shows how heavily economic models are influenced by political ideology.

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