Institute for Macroeconomic and Policy Analysis Board Member Simon Johnson Awarded Nobel Prize in Economic Sciences

The Institute for Macroeconomic and Policy Analysis, housed in the Department of Economics at American University, congratulates Board Member and MIT Sloan School of Management Professor Simon Johnson on being awarded the 2024 Nobel Prize in Economic Sciences. The Nobel Committee for the award honored Johnson, along with Daron Acemoglu and James Robinson, for pioneering research on the role of political and economic institutions in shaping economic growth.

"IMPA draws inspiration from Prof. Johnson's path-breaking work on the importance of protecting economic rights for our study of how to design tax systems that curb market power and decrease inequality," said Juan Montecino, co-director of IMPA. "That's because one way that modern governments protect economic rights is by limiting market power and protecting competition."

The Nobel-winning work shows that nations with governments that extend economic and political rights broadly across social groups grow in the very long term, while nations with governments that confer rights only to elites do not. Johnson is the second IMPA board member to be honored with the Nobel in Economics. IMPA Board Member and Columbia University Professor Joseph Stiglitz was awarded the Nobel Prize in 2001 for his work on asymmetric information.

IMPA is a nonpartisan research institute and resource for policymakers on macroeconomics, inequality and economic policy. Grounded in up-to-date research, IMPA provides analysis of the economic and distributional impacts of policy proposals.

Current IMPA policy briefs examine the following proposals:

IMPA projects that Vice President Kamala Harris's proposal to increase the corporate tax rate to 28 percent will modestly increase GDP, government revenue, and economic equality, while former President Donald Trump's proposal to decrease the rate to 15 percent will do the opposite.

IMPA finds that increasing dividend income and capital gains taxes from 20 percent to 39.6 percent for households earning over $1 million would raise government revenue by about 5 percent and GDP by about 1 percent in the long term.

IMPA shows that a Republican proposal to repeal the clean energy credits from the 2022 Inflation Reduction Act would reduce GDP and depress employment and wages.

IMPA's analysis of the corporate tax cuts in the Tax Cuts and Jobs Act. IMPA's analysis accurately predicts the lack of growth in investment, output, jobs, and wages that followed its enactment.