Friday, December 3, 2010

Is Bob Murphy Taking on All of Mainstream Economics, All at Once?

The fighting machine, known as Bob Murphy, isn't satisfied just taking on Paul Krugman.

Yesterday, I wrote:

Mankiw wants the federal tax on gasoline to go up from its current level of 40 cents to $2.10.
Murphy sent me this text message earlier today (He was probably in the gym training for his debate against Krugman and didn't have access to his computer):
Just so you know, the Federal income tax on gasoline is only 18.4 cents.
I responded, thinking this would quiet Murphy down:
Are you sure you want to go with that? I got 40 cents directly from Mankiw.
Mankiw, if nothing else, is careful. Murphy responded:
Try googling "federal gas tax 18.4 cents" just to reassure yourself.
Here's what you get from the google.

So I went back to Mankiw, and this is what he writes (referencing a study published in the Journal of Economic Literature) in his textbook, Principles of Economics:
It concluded that the optimal corrective tax on gasoline was $2.10 per gallon, compared to the actual tax in the United States of 40 cents.
It's possible the Journal article is referencing some type of average gasoline tax in the country (including state taxes), but it appears that Mankiw misread a call for a 40 cent Federal tax (or the Journal author did). The Federal tax is as Murphy states 18.4 cents.

Bottom line: Murphy just went up against the number one economics textbook author, and his entire team of fact checkers, and body slammed the entire bunch.

2 comments:

  1. Score one for Bob "Baby Face" Murphy. Good thing there are academic barriers to entry in the hard sciences, as numbers are generally important there. I guess 3000 level math courses (now taught in high school) are the consolation prize for the failed physicists that become econometricians.

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  2. "Bottom line: Murphy just went up against the number one economics textbook author, and his entire team of fact checkers, and body slammed the entire bunch [via text message]."

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