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.
BREAKING DOWN '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.