Laffer curve A draft paper by Y. Hsing looking at the United States economy between 1959 and 1991 placed the revenue-maximizing average federal tax rate between 32.67% and 35.21%. A 1981 article published in the "Journal of Political Economy" presented a model integrating empirical data that indicated that the point of maximum tax revenue in Sweden in the 1970s would have been 70%. A 2011 paper by Trabandt and Uhlig published in the "Journal of Monetary Economics" estimated a 70% revenue maximizing rate, and predicted that the US and most European economies were on the left of the Laffer curve (in other
Contract curve the initial allocations. The analysis cannot say which particular point along the contract curve they will end up at — this depends on the two people's bargaining skills. In the case of two goods and two individuals, the contract curve can be found as follows. Here formula_1 refers to the final amount of good 2 allocated to person 1, etc., formula_2 and formula_3 refer to the final levels of utility experienced by person 1 and person 2 respectively, formula_4 refers to the level of utility that person 2 would receive from the initial allocation without trading at all, and formula_5