Incentive Anti-inflation Plans: A Study |
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Common terms and phrases
2-3 percent adjustment allow anti-inflation incentive plan argument average barriers to entry capital cause changes Charles Schultze Colander core inflation corporate income tax costs decrease demand design characteristics difficult direct discussion downward pressure dynamic competition economy employees equilibrium expected firm's firms free Credit Henry Wallich implement incentive anti-inflation plans incentive effect income effect incomes policy individuals inflation incentive inflation rate inflationary input price institutional investment labor maintain MAP Credit Office MONETARISM monetarists monetary policy money supply monopolization necessary offset output prices political price level Pro-competitive productivity profits real theory REAL WAGE INSURANCE reduce regulation relative prices rise role Sales sellers short run Sidney Weintraub specific static stop inflation structural reforms tax incentive tax rate theoretical theory of inflation tion TIP proposals tive transmission mechanism unemployment upward pressure value added guideline value added rate Value added tax value-added wage and price wage increase wage rate
Popular passages
Page 16 - The business of government is to legislate for men as they are, not as it is supposed they ought to be. If provisions had brought a high price in Antwerp they would have been carried thither. As it was the city by its own stupidity blockaded itself far more effectually than the Duke of Parma could have done.
Page 16 - ... they are, not as it is supposed they ought to be. If provisions had brought a high price in Antwerp, they would have been carried thither. As it was, the city, by its own stupidity, blockaded itself far more effectually than Farnese could have done it. In the second place, the enforced lowness of prices prevented any general retrenchment on the part of the citizens.
Page 52 - In simplest terms, it is proposed to levy a surcharge on the corporate profits tax for firms granting wage increases in excess of some guidepost figure. If the wage guidepost were 5.5 per cent, and a wage increase of 7 per cent were granted, the corporate profits tax for the firm would rise above the present 48 per cent by some multiple of the 1 .5 per cent excess. If the guidepost were 3.5 per cent, the excess would be 3.5 per cent and the multiple would be applied to that figure.
Page 16 - Instead of this the government in 1770 prohibited under penalties all speculation in rice. A government which in a season of high prices does anything to check speculation acts about as sagely as the skipper of a wrecked vessel, who should refuse to put his crew upon half rations.
Page 10 - a disproportionate and relatively sharp and sudden increase in the quantity of money or credit, or both, relative to the amount of exchange business. Inflation always produces a rise in the price level.
Page 16 - Far from trying to check speculation, as in 1770, the government did all in its power to stimulate it. In the earlier famine one could hardly engage in the grain trade without becoming amenable to the law. In 1866 respectable men in vast numbers went into the trade; for the government by publishing weekly returns of the rates in every district rendered the traffic both easy and safe. Every one knew where to buy grain cheapest and where to sell it dearest and food was accordingly bought from the districts...
Page 22 - Seven months of the Administration's so-called new economic policy — including four months of Phase II controls — have demonstrated that it is nothing more than a device to make the average worker and consumer both the victim and the goat, while the banks and big business pile up increasing profits. "In the guise of an anti-inflation policy, the American people are being gouged at the supermarket and squeezed in the paycheck. The heaviest burden of this lopsided program is placed on the backs...
Page 53 - ... it dispels any possible allegation that TIP is a plan to "create slave labor." It should also encourage pay moderation to foster price stability. Restriction to large firms should render the proposal administratively feasible. Others may prefer to include only firms that are even larger in size. 5. TIP-CAP: A productivity bonus. Firms reporting average value-added per employee surpassing the economywide 2-3 percent trend of the past might be granted a pay prerogative above the 5 percent norm....
Page 53 - ... might be granted a pay prerogative above the 5 percent norm. Calculations would have to be made for average product corrected for price level inflation (CAP, or Corrected Average Product). This would be a bit more complicated than TIP calculations, but would involve only simple subtractions (of cost of materials from sales receipts) and applying standard price level indexes as a deflator. This would be a productivity bonus. Perhaps one-third of the superior productivity increase above 6 percent...
Page 52 - ... increase by not less than 3 percent nor more than 5 percent per annum, the firm's tax rate will be lowered by (at least) 2 percent below the standard corporate tax rate. b. If the average annual pay increase exceeds 5 percent, the firm will be subject to progressive penalty tax rates. Essentially, (b) is the original Wallich-Weintraub TIP. Proviso (a) is inserted (from Dr. Seidman) with the 3 percent floor intended to preclude greater rewards to firms that beat down pay levels; it dispels any...