Regressive Effects of Government

This set of flashcards covers key concepts about the regressive effects of government policies and regulations as discussed in the lecture.

Regressive Effects

Programs or policies that disproportionately burden lower income individuals.

Knowledge Problems

The lack of immediate clarity on how regulations impact different income groups, necessitating thorough analysis.

Transaction Costs

The costs associated with bargaining and political engagement, affecting representation in policymaking.

Rent Seeking

When political processes create regulations that benefit existing businesses, hindering new competition.

Regulatory Capture

The phenomenon where regulations are designed to benefit established producers, increasing costs and reducing labor demand.

CARES Act

Legislation providing relief, criticized for favoring larger businesses over small ones.

Consumer Prices

The costs that lower income individuals disproportionately bear due to increased regulations.

Wage Impact of Regulation

Increased regulation diverts resources to compliance roles, lowering demand and wages in lower-skilled jobs.

Causality Test

A method to determine if there is a cause-and-effect relationship rather than mere correlation.

Inequality in Political Process

The tendency for lower income individuals to have less influence in policymaking, leading to regressive outcomes.