Experts in the News

Why has inflation continued to rise, despite the Federal Reserve raising interest rates? "It's worrisome," said public finance fellow John Diamond. "The risk the Fed faces is they want to get price increases under control, without throwing the economy into a complete tailspin or into a recession."

"Contrary to what we sometimes hear, the sky isn’t falling, renewables won’t cause public education funding to crater and there are multiple possible solutions to fill this modest gap," wrote public finance fellows John Diamond and Jorge Barro.

USA Today cited a Baker Institute study on the possible effects of increasing the corporate tax rate to 28%, co-authored by public finance fellow John Diamond and Rice economics chair George Zodrow. Diamond is the Baker Institute's Edward A. and Hermena Hancock Kelly Fellow in Public Finance and director of its Center for Public Finance.  Zodrow is Rice's Allyn R. and Gladys M. Cline Chair of Economics and a Baker Institute Rice Faculty Scholar.

President Biden's focus on capital-gains taxes has highlighted concerns about the role of taxation in economic growth. “A rate increase this large would be expected to slow long-term growth. It’s not going to slow it by a substantial amount but I don’t think it’s insignificant,” said public finance fellow John Diamond. “I don’t think it’s a story of just hey, we’re taxing the rich and no one else gets hurt by this.” Diamond is the Edward A. and Hermena Hancock Kelly Fellow in Public Finance.

When it comes to borrowing and spending, particularly in times of crisis, the answer is complicated, public finance fellow John Diamond said.  “At the beginning of the pandemic … all of the emergency measures definitely made sense ... The federal government really had no choice but to respond aggressively." But Diamond argued it is more difficult to justify the second stimulus bill in December, and the most recent $1.9 trillion package passed during the Biden administration, since the economy has started to recover.