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Jeff Gordon

@jeffgordon.bsky.social
1.7K followers 820 following 163 posts

Tax law, industrial policy, decarbonization, between state and market in American law. Assistant Professor at Vanderbilt Law School.

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Jeff Gordon @jeffgordon.bsky.social · 07/08/2026
Pleased to have Blaine Saito review my new article, on TaxProf Blog: taxprofblog.aals.org/2026/08/07/s...
taxprofblog.aals.org
SSRN Review & Roundup: Saito Reviews Gordon's Tax and the Law of Market Cycles • TaxProf Blog
This week, Blaine Saito (Ohio State) reviews Jeff Gordon (Vanderbilt), Tax and the Law of Market Cycles (July 28, 2026). One of the major goals of economic policy is to allow for economic growth while...
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
I knew you specifically would say that about cattle! And I agree, but I think it's a useful directional proxy. The better evidence is just the pattern of capacity additions in response to prices that I document in the paper.
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Luke Herrine @lookheron.bsky.social · 04/08/2026
Forgot about this classic @lpeblog.bsky.social symposium with some absolute bangers. lpeproject.org/symposia/lpe...
lpeproject.org
Symposia: LPE Methods
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Brian Galle @bdgesq.bsky.social · 04/08/2026
This whole long-ass thread is a great read for two interesting (and not necessarily mutually exclusive) takes on what's wrong with U.S. production capacity across many industries. (I'd love to see the author add a climate externalities layer, too!)
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Steve Randy Waldman @interfluidity.com · 01/08/2026
Great paper! A few comments — first overall meta-praise: we really need to develop methods of economic dirigisme that are consistent with the western liberal democratic tradition and that take into account both the imperfection of markets and of state guidance. This is right in that alley. 1/
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
Steve (@interfluidity.com) wrote a very helpful and provocative thread in response to this draft: bsky.app/profile/inte.... My response is here: bsky.app/profile/jeff...
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
I'd like to think more on when to deploy the symmetrical tools vs the asymmetric ones, and I expect to spend some more time with your IDR idea in future projects. I really like this mission statement and am glad you think it fits with the goal of this paper.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
But then your proposal turns fixed costs into variable ones. If funded that way, capital investments can contribute to resilience without crashing prices. I might still prefer to make the IDR loans countercyclical, especially if they are mixed with traditional loans, which will be procyclical.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
In fact, your proposal nicely bridges the market cycles problem and the resilience problem. As I acknowledge at one point, it would be great if firms invested in excess capacity but didn't use it when prices are low. But I viewed such restraint as unrealistic, given high fixed costs...
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
The question of how to raise the average level of investment is a huge one that deserves many dedicated treatments. My paper on resilience with @donibloomfield.bsky.social is an attempt from one angle (wustllawreview.org/2026/03/25/t...). And your income-driven repayment idea is really compelling!
wustllawreview.org
Exploring the Law and Economics of Resilience in Business
Explore the interplay of law and economics in enhancing corporate resilience against supply chain disruptions and external market pressures.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
Taking a step back, I think we need two sets of policies: one to push the average level of investment higher, and a second to minimize volatility around that average. As I argue in this paper, the volatility is itself harmful regardless of where the average sits.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
See U.S. shale: overcapacity in the mid-2010s, capital discipline for a decade thereafter. From this I conclude it is important to mitigate those episodes so as to weaken the capital discipline response. It's not unreasonable to call this reinforcement of the cartel, but I think it's also pragmatic.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
So let's suppose, for the sake of argument, that we face the undercapacity problem more than overcapacity in at least some of these sectors. I would argue that arises in part because firms and investors take any (rare) overcapacity episode so seriously and commit to never letting it happen again.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
Of course, this just shows that my focus industries are not concentrated compared to various other high-profile industries, not that they are as competitive as ideal, nor that they invest at the level of the social optimum. And there is probably still some tacit collusion to hold back investment.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
For better or worse, this paper is meant to deal with a very specific set of industries, including by definition only fairly competitive ones. I pulled some data on HHI concentration to confirm that the ones I discuss are relatively unconcentrated:
Line chart of HHI concentration index computed for industries analyzed in the paper, compared to a set of benchmark industries
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
Steve, thanks so much for these generous and insightful comments. Your concern with secular undercapacity aligns closely with what I worry about in several other projects, even as it fits somewhat awkwardly with this paper. Let's see if I can reconcile it all.
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Jeff Gordon @jeffgordon.bsky.social · 04/08/2026
Thank you! Would of course be interested in any reactions or suggestions you might have!
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Jeff Gordon @jeffgordon.bsky.social · 03/08/2026
Bumping this essay to note that the underlying article is now out for submission to journals: papers.ssrn.com/sol3/papers....
papers.ssrn.com
Industrial Policy as Competition Policy
<p>Throughout U.S. history, and especially in the present era, the government has shaped markets by giving advantages to some firms over others<span>—a version
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
bsky.app/profile/jeff... This is the basic proposal. 263A is just part of it, specifically for measuring capex of an ongoing infrastructure project using the "accumulated production expenditure" concept
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
Whoops, failed to post the one with the proposal: I propose a countercyclical excise tax/subsidy on new capacity additions, the core procyclical behavior. You can think of this as reversing current depreciation incentives. Firms should get negative depreciation at the top, bonus at the bottom.
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
This may be of interest to @arnabdatta.bsky.social @buddyyakov.bsky.social @cthelala.bsky.social @interfluidity.com @advaitarun.bsky.social @jonasnahm.com @horadam.bsky.social @robinsonmeyer.bsky.social @mtkonczal.bsky.social @weisenthal.bsky.social
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
I think this is a good way to think about it...if policy doesn't solve the problem, firms will "solve" it with centralization and capital discipline.
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
I'd be very interested in your feedback and suggestions!
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
There are a lot of market-cycle-management ideas on the table these days, from buffer stocks to CfDs to cartels. I argue that this tax approach is superior because it intervenes on the margin of adding capacity, which is more harmful than merely selling into a bull market.
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
I show that much of necessary regulatory infrastructure for this proposal is already present in tax law's uniform capitalization rules. And what isn't, can be borrowed from other countercyclical regimes like the CCyB or Chile's copper-cycle fiscal rule.
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
I argue that market cycles like these are harmful for everyone. Price volatility is bad for consumers who lack storage; firms invest in costlier, less valuable projects at the top of cycles; crashes cause bankruptcy waves; and market consolidation is the predictable "solution."
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
Cobweb industries produce graphs like this one, from Greenwood & Hanson (2015), where price and supply additions are continuously oscillating out of phase with each other. You can see the same graph in oil, LNG, lithium, polysilicon, commercial real estate, cattle, and more.
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
This is the prediction of the old-school cobweb model, developed in the 1930s but still highly relevant today. The hallmark of a cobweb industry is a lag between deciding to invest in new capacity and that capacity actually coming online.
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
The 2008 GFC made Minsky's financial instability hypothesis famous. The various post-COVID supply chain crises suggest an "investment instability hypothesis." Boom times motivate overinvestment, which crashes prices, which leads to underinvestment, which causes price to spike...
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Jeff Gordon @jeffgordon.bsky.social · 31/07/2026
I have a new working paper up on SSRN, Tax and the Law of Market Cycles. The core idea is: what if we applied everything we've learned about countercyclical macroprudential regulation to the boom-bust cycles of physical commodities and heavy industries? papers.ssrn.com/sol3/papers....
papers.ssrn.com
Tax and the Law of Market Cycles
<p>The signature development in financial regulation over the past two decades has been the macroprudential turn: the recognition that healthy financial conditi
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Luke Herrine @lookheron.bsky.social · 29/06/2026
Great piece, which, among other things, illustrates the value of reading across disciplines and putting heterodox economic traditions in conversation with the mainstream on pragmatic terms
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Jeff Gordon @jeffgordon.bsky.social · 29/06/2026
Thanks very much for reading and sharing!
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Jeff Gordon @jeffgordon.bsky.social · 29/06/2026
Industrial policy is often in tension with competition - a problem I call "the dilemma of picking winners." In this essay and the associated working paper, I propose a framework for doing industrial policy without entrenching the winners. lpeproject.org/blog/the-dil...
lpeproject.org
The Dilemma of Picking Winners
Industrial policy will often require picking winners: if there were already many domestic firms capable of producing the desired output, there would be no compelling reason for subsidy or special…
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Harlan G. Cohen @harlangcohen.bsky.social · 06/05/2026
Totally concur with the "highly recommended." @donibloomfield.bsky.social and @jeffgordon.bsky.social's sophisticated analysis of the the value of export controls is a must-read for anyone in the national security and innovation space.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
The punchline: we can pursue Hamiltonian ends by Brandeisian means. Build up strategic industries, but ensure that today's winners can be challenged tomorrow. Easier said than done! If you've read this far, I would greatly value your comments on the draft
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
3) Avoid cross-subsidy—limit the pick to the business line you actually want to support, not the whole conglomerate. (4) Reduce exit costs—make sure the winner can survive without ongoing govt support, so bailouts aren't baked in.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
The framework has four pillars. (1) Encourage entry—keep the door open for new firms, including ones that don't exist yet. (2) Require modularity—structure deals so assets and responsibilities can be handed off to challengers later.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
(The ideal of temporary monopoly has an eminent pedigree in the history of political economy. See Schumpeter, Hamilton, Unger, Aghion and Howitt.)
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
"Anti-entrenchment industrial policy" is my attempt to sketch a solution to the dilemma. Accept that picking winners is sometimes necessary—but attach a plan for generating competition where there initially wasn't any. Temporary monopoly, not permanent monopoly.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
This is not an easy problem to solve. The industries that most need industrial policy are exactly the ones with too few domestic firms. You can't distribute a CHIPS Act grant across 50 chipmakers if only 4 can build leading-edge fabs. Sometimes (often!) you have to pick a winner.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
Entrenchment has a few big costs. First, it dampens innovation. Second, it breeds dependency and bailouts. Third, it undermines resilience by relying too much on a handful of firms.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
The problem that results from this is entrenchment. The picked winner gets advantages over rivals, the govt grows dependent on that firm, switching costs pile up, and before long you're throwing good money after bad. See: consolidation of defense primes.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
I use "picking winners" as a description of an inevitable process, not a pejorative. When the govt subsidizes critical minerals, funds semiconductor fabs, or awards defense contracts, very few firms qualify. A policy meant to lift industries becomes a policy for lifting firms.
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
So many debates about whether industrial policy is good or bad. I take it as a given. The more interesting question is, if govt is going to shape markets, how do we keep those markets dynamic?
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Jeff Gordon @jeffgordon.bsky.social · 01/04/2026
New draft! "Picking Winners: Industrial Policy and Monopoly." Govts inevitably funnel industrial policy to a handful of firms. I propose "anti-entrenchment industrial policy," a framework for picking winners without getting stuck with them.
t.co
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6433579
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Jeff Gordon @jeffgordon.bsky.social · 27/03/2026
Oil crisis is a fitting moment to share that my paper with Doni Bloomfield, The Law and Economics of Resilience, is now live: wustllawreview.org/2026/03/25/t...
wustllawreview.org
Exploring the Law and Economics of Resilience in Business
Explore the interplay of law and economics in enhancing corporate resilience against supply chain disruptions and external market pressures.
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Reposted by Jeff Gordon
Ilmi @ilmi.bsky.social · 23/05/2025
I'll continue to make the case that policy resilience doesn't mean invincibility, and we shouldn't overinterpret when an otherwise effective policy succumbs to American Maosim. bsky.app/profile/ilmi...
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Ilmi @ilmi.bsky.social · 23/05/2025
This is a logical fallacy. A resilient strategy is not an invincible one. IRA may fail but note it's over the shocked objections of the market. One cannot ignore the decades of tax credit extension, for example, and then cherry pick a black swan data point.
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Jeff Gordon @jeffgordon.bsky.social · 23/05/2025
Awesome stuff in here. Turns out a lot of my favorite people are “LPE-adjacent”
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