Conflicting assumptions
The Diamond papers reliance on the Blundell study has been criticized on the ground that the two studies make different assumptions about the labor market - Blundell identifies a highly heterogenous response from different groups of workers, where Diamond assumes homogeneous 'representative agents'.
This argument may undermine Diamond's - and Romney's - claims about the growth in employment that would result from the Romney tax plan. Does it, however, affect the revenue gains claimed by Rosen that in turn rely on Diamond's estimate of the labor supply response? Whether the labor supply response manifests as more workers or by increased hours by existing workers may not bear on the revenue impact.

This latter rejoinder is appended to this node.
CONTEXT(Help)
-
Visualizing the Romney Tax Debate »Visualizing the Romney Tax Debate
Romney's plan stated »Romney's plan stated
But does it compute? »But does it compute?
No - it does not compute »No - it does not compute
The TPC case »The TPC case
Growth effect claim »Growth effect claim
Ignores growth potential »Ignores growth potential
Growth-supportive studies »Growth-supportive studies
1. Rosen »1. Rosen
Growth estimate 1 - Diamond study »Growth estimate 1 - Diamond study
Labor force analysis »Labor force analysis
Conflicting assumptions
Revenue effect unclear »Revenue effect unclear
+Comments (0)
+Citations (1)
+About