Veterinary Drug Approval Process
Does anyone have data on costs related to the FDA approval process for veterinary drugs? I am interested to see how these would compare to commonly cited information on the burdens associated with the human drug approval process (time required to obtain approval, supporting documentation required, expense, etc). Does anyone know of existing research in this area? It seems like if the data exists it might make for a natural comparison, especially since some veterinary drugs are unique to animal use, while others were originally designed for humans (which could be useful for addressing the possibility of an effect shortening the length to approval in human to animal drugs because of previous FDA approval for human use). If the process for animals ultimately consumes fewer resources (as I suspect), I wonder if anyone has compared side effect prevelance? Any thoughts would be appreciated.
Unemployment rates and trade deficits
Hi Cyril, Actually I wrote a review article on this literature over a decade ago. You can find it in my book with Laura Tyson and John Zysman _The Dynamics of Trade and Employment_ Ballinger 1988. I'm sure there are better and more recent reviews, but I haven't kept up with the literature. As you suspect, it is a very well studied question, but not a particularly well defined one. A lot of people have done the exercise of breaking imports and exports down into 70 or so product categories and computing the labor use due to each from an input-output matrix. You take the labor used to produce exports and subtract the labor demand lost due to imports and you get a net labor demand effect of the current account (preferred to the trade balance since it includes services and is thus a more complete measure of economic output involved in trade). It gives you pretty much the same result as taking the trade deficit and dividing it by labor productivity. Problem is, the trade deficit isn't just something that happens to us. It doesn't really make sense to talk about the effect of the trade deficit or the current account deficit since both are as much effects of economic events as causes of them. Take your regression. You get the standard result that deficits are negatively related to unemployment. The standard explanation for that is that when the US grows quickly (relative to the rest of the world) our incomes grow and demand for imports grows more than proportionally with income so the trade deficits worsen. It isn't that the trade deficit is causing low unemployment - - the normal explanation reverses the causation. So what causes the trade deficit and what are the effects of those things on unemployment? I've already mentioned one. When we grow more quickly than the rest of the world we import more and that causes a trade deficit. Another factor that affects the relative demand of foreign vs. domestic goods is the exchange rate - - for us the price of foreign currency that we have to pay to buy foreign goods. For a long time in the 90s the US dollar was very valuable relative to other currencies and this made other country's goods very cheap. There have been studies that show that when some exogenous factor (ie. one that effects things in the system we are studying without being affected by anything in that system) causes the value of the dollar to go up that has a negative impact on US employment, but during the 90s it was the booming economy that was probably responsible for the dollar being strong (more on that in a moment) and the dollar going up in value only partially offset! the effects of the booming economy leaving unemployment very low. But there is a flip side to the trade deficit that also figures heavily in the picture. If we are going to buy more goods from abroad than we sell, accounts have to balance some how. If we are getting more goods and services than we are selling then someone on the other side of the transaction must be willing to take our dollars and hold them. If we don't export goods and services we have to export ownership of American assets to exactly offset the current account deficit. Normally foreigners are only going to be willing to do this if saving money in dollars is a better deal than saving money in their own currency. This could happen for a number of reasons. It could be because our economy is booming and investments in dollar denominated assets like stocks are yielding a good return. It can also happen if our interest rates are high relative to the rest of the world. You sometimes hear that budget deficits cause trade deficits. The normal mechanism for explaining how th! is happens is that budget deficits drive up interest rates which attract foreign lenders who want dollars. They buy dollars with their own currency driving up the value of the dollar and making foreign goods cheap so that consumers spend the extra foreign currency on imports. If a trade deficit is caused by a booming economy or a government budget deficit, it is normally thought that the trade deficit offsets some of the employment creating effects of these exogenous causes (not that a booming economy is exogenous, but whatever the policy or event was that caused the boom would be). But an increase in investment in the US can also happen if the rest of the world has excess savings and there aren't good investments anywhere else, or simply because investments in the US look good because they seem relatively safe, or because a lot of international trade is done in dollars and countries wanting to hold reserves of currency to pay for trade may want to hold dollars. In that case it is possible for foreign investment in the US to have a depressing effect on the US economy by causing the dollar to go up in value. There is yet one more commonly discussed cause of a trade deficit and it is typically thought that it
Laffer Curve
I've been reading about Laffer's idea that there is a tendency for revenues to increase with increased taxation up to a point where revenue is maximized. As one of the class notes on Caplan's site indicates, you can derive revenue as a function of the tax rate and assuming that the slopes of the supply and demand curves are constants not equal to zero, you can show that the Laffer effect exists. For example, from Pd = price paid by buyer Ps = price received by seller t = tax per unit = Pd - Ps. R = revenue = tQ Supply curve: Qs = a + bPs Demand curve: Qd = c - dPd You can derive R = t(bc + da - bdt)/(b + d) Still, a lot of people have said that the Laffer curve is bunk. Are there any Laffer detractors here? If so, what must the supply and demand curves for labor look like for R(t) to be an always increasing (or at least never decreasing) function? James
Re: Laffer Curve
In a message dated 4/18/05 3:21:40 PM, [EMAIL PROTECTED] writes: I've been reading about Laffer's idea that there is a tendency for revenues to increase with increased taxation up to a point where revenue is maximized. As one of the class notes on Caplan's site indicates, you can derive revenue as a function of the tax rate and assuming that the slopes of the supply and demand curves are constants not equal to zero, you can show that the Laffer effect exists. For example, from Pd = price paid by buyer Ps = price received by seller t = tax per unit = Pd - Ps. R = revenue = tQ Supply curve: Qs = a + bPs Demand curve: Qd = c - dPd You can derive R = t(bc + da - bdt)/(b + d) Still, a lot of people have said that the Laffer curve is bunk. Are there any Laffer detractors here? If so, what must the supply and demand curves for labor look like for R(t) to be an always increasing (or at least never decreasing) function? James For what it's worth, I recall a Treasury study in the late 1980s that concluded that the tax cut of 1984 was 95% self-financing. David
Re: Laffer Curve
James Wells wrote: I've been reading about Laffer's idea that there is a tendency for revenues to increase with increased taxation up to a point where revenue is maximized. As one of the class notes on Caplan's site indicates, you can derive revenue as a function of the tax rate and assuming that the slopes of the supply and demand curves are constants not equal to zero, you can show that the Laffer effect exists. For example, from Pd = price paid by buyer Ps = price received by seller t = tax per unit = Pd - Ps. R = revenue = tQ Supply curve: Qs = a + bPs Demand curve: Qd = c - dPd You can derive R = t(bc + da - bdt)/(b + d) Still, a lot of people have said that the Laffer curve is bunk. Are there any Laffer detractors here? If so, what must the supply and demand curves for labor look like for R(t) to be an always increasing (or at least never decreasing) function? James I'm not sure exactly what people should be objecting to. Logically, at a tax rate of 0, revenue is 0, at a tax rate of 100, revenue is zero. There exists a positive revenue for tax rates in between that range so logically, a maxima must exists within that range. Xianhang Zhang
Re: Laffer Curve
I think the debate is over the tax rate where revenue is maximized. If it is near 25%, you can argue cutting taxes will raise revenue, if it is nearer to 60%, cutting taxes will cause revenue to fall. I am sure there has been research on this, but I do not know the consensus (last I heard, the peak was at about 75%-80%). I think it gets considerably more interesting when you think of how taxes and growth can be endogenous. It is possible that even on the near side of the Laffer curve, a tax cut could cause a large enough increase in investment that the DPV of future revenue could increase. As I understand it, this is one of the arguments Republicans make when arguing tax cuts. Of course, in the 1980s, the Reagan administration did argue the highest tax rates were on the far side of the Laffer Curve. -Jeff Xianhang Zhang [EMAIL PROTECTED] 04/18/05 7:49 PM James Wells wrote: I've been reading about Laffer's idea that there is a tendency for revenues to increase with increased taxation up to a point where revenue is maximized. As one of the class notes on Caplan's site indicates, you can derive revenue as a function of the tax rate and assuming that the slopes of the supply and demand curves are constants not equal to zero, you can show that the Laffer effect exists. For example, from Pd = price paid by buyer Ps = price received by seller t = tax per unit = Pd - Ps. R = revenue = tQ Supply curve: Qs = a + bPs Demand curve: Qd = c - dPd You can derive R = t(bc + da - bdt)/(b + d) Still, a lot of people have said that the Laffer curve is bunk. Are there any Laffer detractors here? If so, what must the supply and demand curves for labor look like for R(t) to be an always increasing (or at least never decreasing) function? James I'm not sure exactly what people should be objecting to. Logically, at a tax rate of 0, revenue is 0, at a tax rate of 100, revenue is zero. There exists a positive revenue for tax rates in between that range so logically, a maxima must exists within that range. Xianhang Zhang
