The year 2017 may be the year behavioral economics found its place in the sun. Fifteen years after behavioral economics pioneer Daniel Kahneman won his Nobel Prize, its principles have been transformed into key policy tools in government, business, and development agencies. The 2017 Nobel Prize to Richard Thaler, one of its principle theoreticians and practitioners, only … [Read more...] about Nudging Latin Americans to Healthier, More Prosperous Lives
When Politics Distorts Tax Reform
The voters of the United States will ultimately weigh in on the wisdom of the large $1.5 trillion tax cuts headed for a final vote before the end of the year in the U.S. Congress. They will make it clear in the November 2018 legislative elections whether they believe that steep reductions in corporate taxes and income taxes for the wealthy are a sound investment in economic … [Read more...] about When Politics Distorts Tax Reform
The Good, Bad and Unexpected of Fiscal Rules
Caribbean countries still face a delicate fiscal situation. While a number of Caribbean economies have reduced their debt burden, the majority face high sovereign debt levels that weigh on their prospects for strong and sustainable growth. In the context of weak fiscal stances and high dependence on foreign external conditions, it makes sense to implement fiscal rules that … [Read more...] about The Good, Bad and Unexpected of Fiscal Rules
Behavioral Economics and the Messaging That Works
"Nothing can be said to be certain, except death and taxes," said the United States' Benjamin Franklin. And few things are less pleasurably anticipated. But at least when it comes to taxes, the avoidance can make running a government especially hard. Behavioral economics, with its psychological insights into how information can be used to change citizens’ beliefs and … [Read more...] about Behavioral Economics and the Messaging That Works
How Nobel Ideas Inspired the IDB
Richard Thaler, the University of Chicago professor who fused psychological insights and economics to reveal how biases affect decision-making, was awarded Oct. 8 the 2017 Nobel Prize in economics. The award, which recognizes Thaler's work in overturning assumptions about economic behavior as rational and demonstrating how people could be "nudged" to make better choices, … [Read more...] about How Nobel Ideas Inspired the IDB