Matthias Weber

Bond prices both reflect and influence the fundamentals

Most economists assume that bond prices merely reflect fundamental factors such as the bond’s interest rate, its face value and the likelihood that the bond issuer defaults. Bond issuers that are more likely to default will have to offer a higher interest to compensate the buyer for the higher risk.

Most economists stop here. However, for real-world bonds, it is […]

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    Economists used to think that it doesn’t matter whom you tax, but it does

Economists used to think that it doesn’t matter whom you tax, but it does

In most countries employers and employees both contribute to the taxes (or social security contributions) levied on labour. Employers pay taxes on top of the wage they transfer to employees and employees pay income taxes on the money they receive from employers. For many decades, economists thought that it should not matter who pays. Employers were thought to care […]