James A. Mirrlees

AAA

DEFINITION of 'James A. Mirrlees'

An economist who won the Nobel Memorial Prize in Economics in 1996, along with William Vickrey, for his work on information asymmetry as it relates to taxation and moral hazard problems. Mirrlees believes that the tax system should be used to improve equality, and determined that the optimal marginal tax rate should be only about 20%. Furthermore, he determined that this optimal rate could efficiently be applied to everyone, not just the rich, providing justification for a flat tax rate.

INVESTOPEDIA EXPLAINS 'James A. Mirrlees'

Mirrlees' primary research interests include optimal income taxation, imperfect rationality and principal/agent situations with multidimensional choice variables. He also helped to develop the Diamond-Mirrlees efficiency theorem along with Peter A. Diamond.


Mirrlees was born in Scotland in 1936. He has worked as an emeritus professor of political economy at the University of Cambridge and as a fellow of Trinity College. He has also taught at Oxford.

RELATED TERMS
  1. Economist

    An expert who studies the relationship between a society's resources ...
  2. Moral Hazard

    The risk that a party to a transaction has not entered into the ...
  3. Dismal Science

    A term coined by Scottish writer, essayist and historian Thomas ...
  4. Flat Tax

    A system that applies the same tax rate to every taxpayer regardless ...
  5. Marginal Tax Rate

    The amount of tax paid on an additional dollar of income. The ...
  6. Compound Annual Growth Rate - CAGR

    The year-over-year growth rate of an investment over a specified ...
Related Articles
  1. How Influential Economists Changed Our ...
    Fundamental Analysis

    How Influential Economists Changed Our ...

  2. The Austrian School Of Economics
    Economics

    The Austrian School Of Economics

  3. Adam Smith: The Father Of Economics
    Economics

    Adam Smith: The Father Of Economics

  4. The Uncertainty Of Economics: Exploring ...
    Economics

    The Uncertainty Of Economics: Exploring ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center