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Tax reform and the cost of capital

The cost of capital was originally presented in a paper written while the author of this Preface was Ford Foundation Research Professor of Economics at the University of  Chicago. Stimulating conversations with Zvi Griliches, Arnold Harberger, and Robert Lucas, who was then a graduate student at Chicago, were especially valuable at this stage.
Griliches kindly arranged for the paper to be presented at a meeting of the American Economic Association. The paper was published in May 1963 in the proceedings of that meeting. Lucas incorporated data on the cost of capital into his dissertation research.

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As a consequence of the research and teaching in public finance at Harvard by Martin Feldstein, Richard Musgrave, and Lawrence Summers, Harvard has been a ‘hot bed’ of activity on the cost of capital for the past two decades. The concept of the marginal effective tax rate was developed in collaboration with Alan Auerbach, then Assistant Professor of Economics at Harvard. The research reported in this book is the result of a collaboration that began when KunYoung Yun was a graduate student at Harvard. Christophe Chamley, Robert Fry, Roger Gordon, Fumio Hayashi, Taewon Kwack, John Laitner, Eric Stubbs, Martin Sullivan and Brian Wright are among the many former Harvard students who have made important contributions to tax policy and the cost of capital.