The median Greek citizen will be better off if there is a “yes” vote in the July 5 referendum on whether to accept the terms of the bailout package offered by Greece's creditors.
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Behavior in many complex and seemingly intractable strategic settings can be understood more clearly by working out what each party in the game will choose to do if they realize that the other parties will be solving the same problem. This insight has helped us understand behavior as diverse as military conflicts, price setting by competing firms and penalty kicking in soccer.
Californians would be better off on average if all final users in the state paid the same price for water — adjusted for quality, place and time — even if, as a result, some food prices rose sharply and some farms failed.
The Fed should wait until its preferred measure of inflation (Core PCE) is clearly rising — and not just forecast to rise — before it begins hiking interest rates.
Declining to be vaccinated against contagious diseases such as measles imposes costs on other people, which is a negative externality.
Informed postmortems of Ben Bernanke’s Fed chairmanship will judge favorably the Fed's creative and aggressive policy initiatives from autumn 2008 through early 2009.
Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment.
The distortionary costs of raising the federal minimum wage to $9 per hour and indexing it to inflation are sufficiently small compared with the benefits to low-skilled workers who can find employment that this would be a desirable policy.
The economic benefits to the U.S. of having a
handful of banks with balance sheets greater than $1 trillion are small.
Even if inflationary
pressures rise substantially as a result of quantitative easing and low
interest rates, the Federal Reserve has ample tools to rein inflation back in
if it chooses to do so.
Assuming that Germany eventually agrees to backstop the debt of southern European countries, the eurozone as a whole will be better off if that bailout is unconditional, rather than accompanied by the labor market reforms and future budget controls that Germany is demanding of countries in return.
Taking into account all of the ARRA’s economic consequences — including the economic costs of raising taxes to pay for the spending, its effects on future spending, and any other likely future effects — the benefits of the stimulus will end up exceeding its costs.
Local ordinances that limit rent increases for some rental housing units, such as in New York and San Francisco, have had a positive impact over the past three decades on the amount and quality of broadly affordable rental housing in cities that have used them.
The typical chief executive officer of a publicly traded corporation in the U.S. is paid more than his or her marginal contribution to the firm's value.
Mandating that U.S. publicly listed corporations must allow shareholders to cast a non-binding vote on executive compensation was a good idea.
If the US replaced
its discretionary monetary policy regime with a gold standard,
defining a "dollar" as a specific number of ounces of gold, the
price-stability and employment outcomes would be better for the average
American.
Credible assumptions for
inflation, GDP growth and primary budget deficits in Italy imply that either
the Debt-to-GDP ratio in Italy would increase sharply if Italian
interest rates on 10-year government debt remained at the November 30
level of around 7 percent or Italy would lose access to the bond
market.
Absent outside help to deal
with runs, such as a pledge of fiscal support from Germany or an unlimited
commitment by the ECB to buy bonds, there is no spending-and-tax plan
Italy can announce that would be credible enough
to hold its interest rates low enough to stabilize its
Debt-to-GDP ratio.
Federal mandates that
government purchases should be “buy American” unless there are exceptional
circumstances,
such as in the American Recovery and Reinvestment Act of 2009, have a significant positive impact on U.S. manufacturing employment.
The Chinese government
pursues policies that keep the renminbi's exchange rate vis à vis the dollar
lower than it would be if the currency floated without those policies.
Public school students would receive
a higher quality education if they all had the option of taking the government
money (local, state, federal) currently being spent on their own
education and turning that money into vouchers that they
could use towards covering the costs of any private school or public school of
their choice (e.g. charter schools).
The cumulative budget shortfalls in the US over the next 10 years can be reduced by half (or more) purely by increasing the federal marginal tax rate on ordinary income for those in the top tax bracket.
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