Private Enterprise Research Center (PERC)

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The mission of the Private Enterprise Research Center (PERC) is to provide Texas A&M University, the state of Texas and the Nation with analysis of important policy issues. PERC actively supports academic research and market oriented solutions to public policy problems.

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Alamos Alliance XXIX Executive Summary
(Private Enterprise Research Center, Texas A&M University, 2022-04-07) Navarro, Carlos I.
In this summary of the 29th edition of Alamos Alliance, participants and panelists addressed the issue of isolationist policies in response to the economic conditions caused by the Covid-19 pandemic, high inflation, and Russiaâ€™s invasion of Ukraine. The main topics of discussion include the return of â€˜stagflationâ€™ and the perils of fiscal mismanagement; the supply chain â€˜mess,â€™ near-shoring and the future of open trade; and lost opportunities and radical uncertainty in Latin America. Speakers included Hernando de Soto (keynote), as well as Manuel Hinds, author of In Defense of Liberal Democracy, with a follow-up discussion led by Luis Rubio, Chairman of the Board of CIDAC-MÃ©xico EvalÃºa.
Alamos Alliance XXVII 2020 Executive Summary
(Private Enterprise Research Center, Texas A&M University, 2020-03-05) Navarro, Carlos I.; Salinas-Leon, Roberto
Why are capital markets dysfunctional in an era of excessive liquidity, low interest rates and modest inflation? Why has the Chilean economic model, an inspiration to many other nations over many years, come under vicious attack? What is driving the turn to socialism among younger generations? These topics were tackled at the 27th meeting of the annual Alamos Alliance, â€œDisruption and Discontent in the Global Economy: Addressing the New Challenges,â€� held from February 13-16, 2020 in Alamos, Mexico. This report summarizes the the keynote presentations given by Professor Douglas Irwin of Dartmouth College; Ricardo Hausmann, the Director of Harvard Universityâ€™s Growth Lab at the Center for International Development; as well as talks given by Anne Krueger, Deirdre McCloskey, Luis de la Calle and Kevin Murphy, among others.
Alamos Alliance XXVIII 2021 Executive Summary
(Private Enterprise Research Center, Texas A&M University, 2021-05-19) Navarro, Carlos I.
The year 2020 and the Covid-19 pandemic abruptly shifted the manner in which people interact, save, spend, work, and carry out day-to-day business. The 28th meeting of the annual Alamos Alliance, which was held virtually on April 30, 2021, addressed the economics of the Covid-19 disruption, the recent rise of cryptocurrency, and fiscal and monetary policy responses to the pandemic. This report summarizes the presentations given by Vice President & Chief Economist of World Bank Group Carmen Reinhart, Professor Casey Mulligan, Robert Topel, Kevin Murphy, former Texas Senator Phil Gramm, Anne Krueger, and Manuel Suarez Mier. A discussion with Manuel Sanchez, Tom Saving, Pedro Aspe and Sebastain Edwards on cryptocurrencies and inflation followed.
Analysis of the Biden Proposal to Equalize Saving Incentives
(Private Enterprise Research Center, Texas A&M University, 2020-10-16) Jansen, Dennis W.; Liu, Liqun; Rettenmaier, Andrew J.
Democratic Presidential Nominee Joe Biden has proposed replacing the current tax deductions on contributions to 401(k) retirement accounts with a uniform refundable tax credit that would be deposited into the taxpayerâ€™s retirement account as a matching contribution. The stated goal of the tax credit is to give lower income workers added incentives to save for retirement, as it would be more generous to them than the current deductions allowed to 401(k) accounts. In PERC Policy Study 2003, authors Dennis W. Jansen, Liqun Liu and Andrew J. Rettenmaier estimate different savings scenarios of both low and high income workers nearing retirement, and compare earnings derived using current 401(k) and Roth savings plans to the proposed uniform tax credit. The authors find that, if enacted, lower income workers would use the tax credit, while higher income workers would switch to Roth savings plans, resulting in less tax revenue for the federal government. The plan would also result in the unequal treatment of workers who participate in defined contribution plans relative to workers in defined benefit pension plans.
BCS Economy at the Start of 2023
(Private Enterprise Research Center, Texas A&M University, 2023-01-26) Rettenmaier, Andrew J.
This presentation, â€œState of the Local Economy at the Beginning of 2023,â€� covers topics from PERCâ€™s Economic Indicators report, including the Business-Cycle Index, nonfarm employment, unemployment, inflation-adjusted GDP, national and local air travel, and inflation.
The Border Adjustment Tax and Corporate Tax Reform
(Private Enterprise Research Center, Texas A&M University, 2017-05-01) Liu, Liqun; Saving, Thomas R.
Both House Republicans' 2016 tax plan and, more recently, President Trump's tax plan envision a rate cut for the corporate income tax (CIT): from the current 35% to 20% (the House plan) or 15% (the president's plan). To offset any potential revenue loss due to the CIT rate cut, some economists propose a border adjustment tax (BAT). The BAT based on a new 15% CIT is equivalent to shifting the 15% CIT from being entirely on exports to entirely on imports. Because we regularly run a trade deficit, the proponents of the BAT argue, some or all of the lost revenue caused by the CIT rate reduction can be recovered by the BAT. This study examines the role of the BAT in raising revenues. It finds that some previously neglected factors would significantly compromise the BAT's ability to generate net revenues, with or without a fully offsetting appreciation of the dollar. These factors include an increase in imports price, a decrease in exports price, and dollar appreciation's asymmetric effects on imports and exports, all of which work to reduce the trade deficit or even turn it into a surplus.
Business Impact of Covid-19 Pandemic, Bryan-College Station Follow-up Survey Results
(Private Enterprise Research Center, Texas A&M University, 2020-12-11) PERC Staff
This follow-up survey is the second of two surveys that includes responses from businesses in the Bryan-College Station area on the impact of the Covid-19 pandemic on operations and supply chain, workforce, and finance. The survey, created by staff at the Private Enterprise Research Center and distributed by the BCS Chamber, was conducted November 2-6, 2020. A total of 217 follow-up surveys were completed. The following report also compares responses from the initial survey, which was carried out June 8-16, 2020 and had 499 respondents.
Business Impact of Covid-19 Pandemic, Bryan-College Station Survey Results
(Private Enterprise Research Center, Texas A&M University, 2020-07-15) Bullock, Ashley; Jansen, Dennis W.; Navarro, Carlos I.; Rettenmaier, Andrew J.
This survey includes responses from businesses in the Bryan-College Station area on the impact of the Covid-19 pandemic on operations, employment, and financial situations. The survey, created by staff at the Private Enterprise Research Center and distributed by the BCS Chamber, was conducted June 8 through 16 and received responses from 499 individual businesses.
Can Cryptocurrencies Successfully Compete in the Money Market?
(Private Enterprise Research Center, Texas A&M University, 2021-03-17) Saving, Thomas R.
The cryptocurrency revolution began with the introduction of Bitcoin in 2009. Today, there are now more than 4,000 cryptocurrencies and Bitcoin has a market capitalization of over $1 trillion. While these new digital entities are characterized as cryptocurrency, none actually circulate in day-to-day commerce. In policy study 2102, author Thomas R. Saving describes the necessary properties of money and compares them to cryptocurrency. As they are currently structured, cryptocurrencies are not going to compete in the privately produced money market but are better positioned to compete in the precious metals market.
Can Electricity Demand Help Us Monitor the Economy?
(Private Enterprise Research Center, Texas A&M University, 2022-07-12) Sekhposyan, Tatevik; Kouchekinia, Noah
The recent pandemic has emphasized the importance of high-frequency economic variables. Electricity consumption, particularly important as a production input, is one such variable. However, electricity consumption typically exhibits marked seasonal fluctuations, which mask the fluctuations that are interesting from a business cycle perspective. In policy study 2202, PERC Professor Tatevik Sekhposyan and coauthor Noah Kouchekinia show that after capturing the seasonal effects associated with weather and calendar events, electricity consumption can provide a rapid reflection of the state of the economy. This may be particularly valuable for measuring regional economic activity, where official statistics are slower to arrive.
The College Station-Bryan Economy Presentation
(Private Enterprise Research Center, Texas A&M University, 2021-08-24) Jansen, Dennis W.; Rettenmaier, Andrew J.
The presentation includes information on: National real gross domestic product through the second quarter of 2021; ; Real personal consumption expenditures through June 2021; Julyâ€™s National nonfarm employment; Texas real taxable sales and nonfarm employment through June 2021; Real cumulative state tax revenues for fiscal years 2019-2021; The College Station-Bryan Business-Cycle Index, Business Cycle and unemployment rates through June 2021; Unemployment rates in Texas MSAs through June 2021; Components of population growth in College Station-Bryan MSA, 2010-2019; Migrant and non-migrant incomes in Brazos County and nationally; Local enplanements from 2019-2021 and monthly TSA checkpoint travel numbers
The College Station-Bryan Economy Presentation, Updated 10/26/2022
(Private Enterprise Research Center, Texas A&M University, 2022-11-04) Jansen, Dennis W.; Rettenmaier, Andrew J.
The presentation includes information on: The College Station-Bryan Business-Cycle Index, Business-Cycle, nonfarm employment, taxable sales, and unemployment rates through August 2022; Real total wages through the first quarter of 2022; Unemployment rates in Texas MSAs through August 2022; Fall enrollment total and college composition at Texas A&M University from 2017-2022; Local enplanements from 2019 to September 2022 and monthly TSA checkpoint travel numbers; Nonfarm employment for the U.S. and 4 largest states through August 2022; Real GDP for Texas and the U.S. through the second quarter of 2022; Mining, Quarrying, Oil and Gas Extraction values through the second quarter of 2022; Cumulative Texas net revenues from fiscal years 2019-2022; National nonfarm employment data from 2008 to September 2022; Inflation rates using CPI, Core CPI, PCE, and Core PCE compared to Federal Reserve targets through August 2022; Actual inflation vs. Federal Reserve projections through July 2022; Historical federal revenue and outlays as a percent of GDP from 2006-2021 and projections from 2022-2052; Historical federal debt as a percent of GDP from 1986-2021 and projections through 2052
College Station-Bryan Economy Presentation, Updated 4/7/2022
(Private Enterprise Research Center, Texas A&M University, 2022-04-11) Jansen, Dennis W.; Rettenmaier, Andrew J.
The presentation includes information on: The January 2022 Business-Cycle Index and Business-Cycle for College Station-Bryan; College Station-Bryan unemployment rates dropped to 3.7% in February 2022 and was tied for the fourth-lowest rate among other Texas MSAs; Nonfarm employment data from the past fifteen years is reported for the College Station-Bryan MSA and was recently revised 3.6% higher than the previous December 2021 count; Texas state oil and gas production taxes are shown from September 2019 to March 2022; The volatility in both natural gas and oil production in Texas is shown from the beginning of 2019 through March 2022; A comparison of indexed nonfarm employment prior to and after the Bureau of Labor Statistics data revision for the U.S., Texas and select Texas MSAs from prior to the pandemic through February 2022; A comparison of employment by industry prior to and after the data revision from prior to the pandemic through February 2022; Inflation rates since 2010, including the Consumer Price Index, and Personal Consumption Expenditures Price Index, as well as inflation expectations; Wages, real (inflation-adjusted) wages, and prices prior to the pandemic through February 2022.
Coronavirus and the Economy Presentation, Updated 7/16
(Private Enterprise Research Center, Texas A&M University, 2020-07-16) Jansen, Dennis W.; Rettenmaier, Andrew J.
This presentation focuses on the coronavirus pandemic and its impact on College Station-Bryan and the state of Texas. The attached presentation includes information on: Updated national unemployment insurance claims for Texas and the Nation for the week ending on July 4, 2020; College Station-Bryan unemployment insurance claims from March 14, 2020 to June 27, 2020; Unemployment rates and indexed employment in select Texas metro areas; Vehicle miles driven relative to the first week of March; Information on airline travel, including TSA traveler throughputs and Easterwood Airport enplanements; Local Covid-19 positive cases per 1,000 population; State budget scenarios, as well as individual tax collections for June; International Monetary Fund GDP projections
Coronavirus and the Economy Presentation, Updated 8/27
(Private Enterprise Research Center, Texas A&M University, 2020-08-27) Jansen, Dennis W.; Rettenmaier, Andrew J.
This presentation includes information on: Â· The number of unemployment insurance claims in the U.S. and Texas for the week ending August 22, 2020 and August 15, 2020 for College Station-Bryan Â· June unemployment rates for College Station-Bryan, and July rates for Texas and the U.S. Â· A comparison of the June unemployment rates among Texas MSAs Â· 2020 Hotel receipts and inflation adjusted real taxable sales in College Station-Bryan for the first six months of 2020 compared to 2019 Â· The number of TSA travelers through August 16, 2020 compared to the same period in 2019 Â· The January â€“ July enplanements out of Easterwood Airport for 2019 vs 2020 Â· The June College Station-Bryan Business-Cycle and Business-Cycle Index Â· The number of positive Covid-19 cases for Brazos County and Texas through August 26, 2020 Â· A forecast on Real GDP and Real Potential GDP from the Congressional Budget Office Â· Local Nonfarm employment through July 2020 Â· Employment by industry, indexed to 2009, along with gains from the end of the Great Recession compared to losses since the outset of the current recession Â· Updated state and local budget scenarios
The Corporate Financing Effects of the Temporary Tax Deduction for Repatriated Dividends
(Private Enterprise Research Center, Texas A&M University, 2016-07-01) Newhard, Joseph
With the intent of stimulating domestic investment and employment, the American Jobs Creation Act of 2004 included a provision under section 965 that allowed for a one-time tax deduction on repatriated dividends. In accordance with the law, qualifying repatriated funds were to be allocated to specific types of investment-related expenditures. However, since money is fungible, there is a question as to whether the law increased domestic investment spending or simply freed up cash that was to be allocated to investment, allowing corporations to increase other types of expenditures instead which were unrelated to capital investment and labor demand. Drawing from the 10-k filings of about 60 repatriating corporations, this paper analyzes the effect of the tax deduction on five types of corporate expenses, only three of which were permitted uses of qualifying funds. I find that the temporary tax deduction coincided with an increase in share repurchases and dividend payments to shareholders, both expressly unpermitted uses of qualifying repatriations. I find no evidence of a boost to the approved expenses of research and development, capital investment, or long term debt repayments. This suggests that the Act was ineffective at stimulating domestic investment, merely freeing up cash for other uses.
The Covid-19 Federal Reserve
(Private Enterprise Research Center, Texas A&M University, 2023-10-13) Saving, Thomas R.
At almost the onset of the effects of the pandemic, the Federal Reserve engaged in a massive asset expansion that was truly unprecedented. In just the first three months of the pandemic, March, April and May of 2020, the Federal Reserve bought $2.13 trillion in securities. Two years later, the money injection reached $4.76 trillion, almost 20% of 2022 GDP! What is more astounding is that unlike the Great Recession interventions, there were no undergoing financial crises that triggered this massive expansion. It has resulted in the end of the Federal Reserveâ€™s annual transfers to the U. S. Treasury that in 2022 equaled 30.5% of the net interest cost of the federal debt. Here, Thomas Saving examines the Federal Reserveâ€™s actions during both the Great Recession and the Covid-19 pandemic, as well as the problems facing the Federal Reserve â€“ a catastrophe of its own making.
The Failed Federal Reserve Attempt to Get Back to the Past
(Private Enterprise Research Center, Texas A&M University, 2020-05-21) Saving, Thomas R.
The end result of the Federal Reserveâ€™s response to the 2008 financial and the Great Recession was an unprecedented increase in assets. Between 2008 and 2014, Federal Reserve assets rose from just under $900 billion to over $4.5 trillion, more than 500%. This asset increase was expected to dramatically increase inflation, but did not due to the introduction of paying interest on bank reserves. In policy study 2002, author Thomas R. Saving shows the Federal Reserveâ€™s rise in assets and the outcomes of its decision to return to their historic level as a share of GDP.
Federal Entitlement Spending
(Private Enterprise Research Center, Texas A&M University, 2018-06-25) Liu, Liqun; Rettenmaier, Andrew J.; Saving, Thomas R.
Federal spending has hovered at around 20% of GDP for the past 50 years. Recent CBO reports forecast deficits averaging around 5% of GDP each year for the next 10 years, combined with rising federal spending continue to raise the federal debt to unprecedented peacetime levels. Today, Social Security, Medicare and Medicaid are the three main transfer programs â€“ accounting for almost 50% of all federal government outlays. In PERC Policy Study 1801, authors Liqun Liu, Andrew J. Rettenmaier and Thomas R. Saving compare federal spending over time, discuss the causes behind the rise in spending, and focus on transfer program reforms. The paper provides workable alternatives that constrain spending by adjusting the full retirement age and benefit formula of Social Security and Medicare, and also redefining the basis by which each state receives federal Medicaid contributions.
Federal Liabilities 2015 Update
(Private Enterprise Research Center, Texas A&M University, 2015-07-01) Liu, Liqun; Rettenmaier, Andrew J.; Saving, Thomas R.

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