Sir James Mirrlees has been influential in several areas. With Little he contributed to development economics through ‘the manual’, a practical guide to the use of cost–benefit analysis. He developed the theory of optimal income taxation and in so doing introduced the concept of incentive compatibility. With Diamond he revolutionized the theory of commodity taxation. His work on the principal–agent problem characterized contracts designed to counter moral hazard. The analytical tools he pioneered have benefited every area of economics to which they have been applied.
Asymmetric information Border prices Commodity taxation Cost–benefit analysis Endogenous growth theory Incentive compatibility Income taxation and optimal policies Mirrlees, J. Monotone likelihood ratio condition Optimal growth Optimum income tax Principal–agent problem Production efficiency lemma Revelation principle Shadow pricing Single-crossing condition Technical change Value-added taxation World Bank
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