Growth estimate 1 - Diamond study

Based on simulations using a widely-used general equilibrium growth model, John Diamond of Rice University estimates the macro-dynamic growth impact of something like the Romney tax plan at 5.4 percent over a decade. This is used in the revenue estimates made by Rosen.

Two important objections have been raised to the Diamond study and its use by Rosen to estimate tax impacts. These objections are added as opposing nodes to this one.

It is also important to note that Diamond's use of the TPA model results in a 6% increase in the labor supply. However this leaves unanswered how this supply response will be distributed between new worker participation (the extensive margin) or increased hours of work (the intensive margin). To answer this question he relies on a separate study showing the great bulk will be increased worker participation. This analysis is added as a supportive node to this one - and is then challenged by another commentator on the ground that the simulation model and the Blundell study are incompatible.
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