Luigi Zingales

Chicago

Personal Homepage

  • Robert C. McCormack Professor of Entrepreneurship and Finance
  • Bernácer Prize (2003)

Voting History

Capital Outflows

Experience over the past 30 years shows that for the typical emerging market nation facing rapid capital outflows, spending foreign currency reserves to defend its currency is a better policy for its citizens than not doing so.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree 4

Airline Mergers

If regulators had not approved mergers in the past decade between major networked airlines, travelers would be better off today.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain 4

Student Credit Risk

Conventional economic reasoning suggests that it would be a good policy to enact the recent Senate bill that would let undergraduate students borrow through the government Stafford program at interest rates equivalent to the primary credit rates offered to banks through the Federal Reserve's discount window.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain 5

Savings Behavior

An effective way to increase savings rates of employees whose firms have defined contribution plans is to combine automatic enrollment in those plans and periodic automatic increases in their contributions (with the ability to opt out of either).

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did not answer
Agree 7

Fiscal Policy and Savings

Sustained tax and spending policies that boost consumption in ways that reduce the saving rate are likely to lower long-run living standards.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 7

Fogel on Slavery

Slavery in the United States was eradicated because of social and political events, not because it was an unprofitable institution for slaveholders.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 7

LNG Exports

Restricting US exports of liquefied natural gas would have adverse effects on the US economy.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 6

Infrastructure

Question A: Because the US has underspent on new projects, maintenance, or both, the federal government has an opportunity to increase average incomes by spending more on roads, railways, bridges and airports.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 6

Question B: Past experience of public spending and political economy suggests that if the government spent more on roads, railways, bridges and airports, many of the projects would have low or negative returns.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain 5

Charitable Deductions

Reducing the income-tax deductibility of charitable gifts is a less distortionary way to raise new revenue than raising the same amount of revenue through a proportional increase in all marginal tax rates.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Agree 6

Bitcoin

A bitcoin's value derives solely from the belief that others will want to use it for trade, which implies that its purchasing power is likely to fluctuate over time to a degree that will limit its usefulness.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 5
Agree 6

High Debt Countries

Countries that let their debt loads get high risk losing control of their own fiscal sustainability, through an adverse feedback loop in which doubts by lenders lead to higher government bond rates, which in turn make debt problems more severe.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 6
Agree 7

Trade Deals

Refusing to liberalize trade unless partner countries adopt new labor or environmental rules is a bad policy, because even if the new standards would reduce distortions on some dimensions, such a policy involves threatening to maintain large distortions in the form of restricted trade.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
No Opinion
Uncertain 5

Early Education

Using government funds to guarantee preschool education for four-year olds would yield a much lower social return than the ones achieved by the most highly touted targeted preschool initiatives.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
No Opinion
Uncertain 4

Minimum Wage

Question A:

Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain 5

Question B:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain 5

High-Skilled Immigrants

The average US citizen would be better off if a larger number of highly educated foreign workers were legally allowed to immigrate to the US each year.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
Agree 7

Japan's Deflation

The persistent deflation in Japan since 1997 could have been avoided had the Bank of Japan followed different monetary policies.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 6

Debt Ceiling

Because all federal spending and taxes must be approved by both houses of Congress and the executive branch, a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and can potentially lead to worse fiscal outcomes.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 5
It can also lead to potential better outcomes
Agree 7

Small Firms

The federal government would make the average U.S. citizen better off by using policies that directly focus more on increasing small business growth than growth of economic output overall.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 1
Disagree 6

Indexing

The annual indexing of Social Security benefits to increases in the consumer price index for urban wage earners and clerical workers (the CPI-W) leads to higher benefits than would be required to compensate recipients for genuine cost-of-living increases.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
No Opinion
Uncertain 6

Carbon Taxes II

The Brookings Institution recently described a US carbon tax of $20 per ton, increasing at 4% per year, which would raise an estimated $150 billion per year in federal revenues over the next decade. Given the negative externalities created by carbon dioxide emissions, a federal carbon tax at this rate would involve fewer harmful net distortions to the US economy than a tax increase that generated the same revenue by raising marginal tax rates on labor income across the board.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Agree 7

Ten-year Budgets

Question A: Because federal spending on Medicare and Medicaid will continue to grow under current policy beyond the 10-year window of most political budget debates, it is easy for a politician to devise a budget plan that would reduce federal deficits over the next decade without really making the U.S. fiscally sustainable.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 5
Agree 7

Question B: Comparing two plans that would reduce federal budget deficits by identical amounts in each of the next 10 years, one that did so partly by reducing significantly the long-term growth rate of Medicare and Medicaid spending would do more to make the U.S. budget fiscally sustainable than one that did not lower the growth of these spending programs.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 5
Agree 7

Bailouts: Banks and Automakers

Question A: Taking into account all of the economic consequences — including the incentives of banks to ensure their own liquidity and solvency in the future — the benefits of bailing out U.S. banks in 2008 will end up exceeding the costs.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 4
Agree 6

Question B: Because GM and Chrysler were bailed out in 2008-09, the U.S. unemployment rate was lower at the end of 2010 than it would it have been if Congress and the executive branch had not intervened.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 1
Agree 6

Question C: Taking into account all of the economic consequences — including effects on corporate managers' incentives and on creditors' expectations of how their claims will be treated in future bankruptcies — the benefits of bailing out GM and Chrysler will end up exceeding the costs.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 5
Uncertain 6

Big Banks

Question A: The U.S government should make further efforts to shrink the size of the country's largest banks — such as by capping the size of their liabilities or penalizing large banks more heavily through taxes or other means — because the existing regulations do not require the biggest banks to internalize enough of the "too-big-to-fail" risks that they pose.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
Agree 6

Question B:

The economic benefits to the U.S. of having a handful of banks with balance sheets greater than $1 trillion are small.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 4
Agree 5

Manufacturing

Question A: The federal government would make the average U.S. citizen better off by using policies that directly focus more on increasing manufacturing employment than employment in other sectors.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 4
I depends what you mean with average citizen. Lower educated people would probably benefit at the expense of others.
Disagree 6

Question B: Because firms and inventors do not capture the full returns from research and development, the government would increase the average well-being of Americans (and potentially of others too) by favoring R&D using the tax code.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 4
If you tink of fundamental research is probably true. If you think about research in general, even the premise might be wrong
Agree 6

Medicare

Question A: Consider one of two proposals for restraining future Medicare spending, each by the same amount: The method that President Obama enacted in the Affordable Care Act — reducing Medicare-related payments to private insurers and altering the payment system for doctors and hospitals — imposes risks on future Medicare patients because over time the supply of doctors, hospitals and insurers willing to offer them health services may decline in response to restrained payments.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 6
Agree 6

Question B: Consider the other of two proposals for restraining future Medicare spending, each by the same amount: The method that Governor Romney advocates — giving future seniors a fixed payment for premiums and letting private insurers compete with Medicare — imposes risks on future Medicare patients because competition may not be powerful to enough to offer future seniors the same quality of care that is currently promised without supplementing their premium support.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 4
Agree 6

Presidents and Jobs

Claims by incumbent presidents and challengers about how many private-sector jobs can be created in a four-year period by sector-level or other targeted policies should be viewed as rough guesses, because overall macroeconomic conditions drive aggregate employment in ways that dominate any net effects of polices that focus on specific industries or households.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 3
Agree 8

Taxing Capital and Labor

Question A: One drawback of taxing capital income at a lower rate than labor income is that it gives people incentives to relabel income that policymakers find hard to categorize as "capital" rather than labor".

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
Agree 7

Question B: Despite relabeling concerns, taxing capital income at a permanently lower rate than labor income would result in higher average long-term prosperity, relative to an alternative that generated the same amount of tax revenue by permanently taxing capital and labor income at equal rates instead.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 3
Uncertain 5

Question C: Although they do not always agree about the precise likely effects of different tax policies, another reason why economists often give disparate advice on tax policy is because they hold differing views about choices between raising average prosperity and redistributing income.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 4
Agree 7

U.S. State Budgets

Question A: By discounting pension liabilities at high interest rates under government accounting standards, many U.S. state and local governments understate their pension liabilities and the costs of providing pensions to public-sector workers.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 10
Agree 7

Question B: During the next two decades some U.S. states, unless they substantially increase taxes, cut spending, and/or change public-sector pensions, will require a combination of severe austerity budgets, a federal bailout, and/or default.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
Agree 7

QE3

Question A: Even if the third round of quantitative easing that the Fed recently announced increases real GDP growth over the next two years, the increase will be inconsequential.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 6
Uncertain 5

Question B: Even if the third round of quantitative easing that the Fed recently announced increases annual consumer price inflation over the next five years, the increase will be inconsequential.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 2
Uncertain 5

Question C:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 5
The difference between can do it and will do it is a bit tricky when we are talking about the Fed
Agree 5

Ethanol

Question A: Ethanol content requirements and protectionism against imported ethanol (which includes fuel from sugarcane) raise food prices without significantly reducing carbon-dioxide emissions.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Agree 7

Question B: A direct disincentive to emit carbon-dioxide, for example through a carbon tax or an emissions permit market, is more efficient than requiring the use of corn-based ethanol fuels.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
Strongly Agree 8

European Debt

Question A: Even if all the official-sector funding that Greece received from 2010 through August 2012 is written off, propping up Greece to buy time for the rest of Europe to prepare for Greek default has been better for citizens of the Eurozone outside of Greece than a policy that would have cut off funding sooner.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 3
I do not think it has been better for Greece either
Uncertain 5

Question B: A substantial sovereign-debt default by some combination of Greece, Ireland, Italy, Portugal and Spain is a necessary condition for the euro area as a whole to grow at its pre-crisis trend rate over the next three years.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 5
Disagree 5

Question C: Unless there is a substantial default by some combination of Greece, Ireland, Italy, Portugal and Spain on their sovereign debt and commercial bank debt, plus credible reforms to prevent excessive borrowing in the future, the euro area is headed for a costly financial meltdown and a prolonged recession.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 3
Uncertain 4

Trade Barriers for Sugar

The current trade barriers in the U.S. sugar industry raise the profits of sugar producers and make the typical U.S. consumer pay more for sugar and goods that use sugar as an input.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 10
Agree 7

Student Loans

Question A: Loans to students attending for-profit colleges are especially risky because students attending them have had default rates that greatly exceed those for comparable students attending public and non-profit private institutions.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
No Opinion
If the fact is correct ( I do not know ) I agree
Uncertain 5

Question B: Rules that tie each college's eligibility for federal student loans to its students' graduation rates and post-schooling employment outcomes would better protect taxpayers from losses on student loans.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 9
Agree 5

Money Market Funds

Question A: The way in which money market funds normally trade – at one dollar per share, even though the per-share value of the assets backing them varies over time – made them vulnerable to a run in 2008 before they received taxpayer guarantees.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 9
Agree 8

Question B: Taxpayers would be better protected if each money market fund in the U.S. were instead required to trade at its floating net asset value.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Uncertain 7

Question C: In the absence of floating net asset values, taxpayers would be better protected if each money market fund in the U.S. were required to set aside capital to protect against losses while holding back a portion of shareholders' cash for a time when they seek to withdraw all of their money.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Uncertain 5

Obesity and Soft Drinks

Taxes or bans on large bottles of soft drinks containing sugar are not likely to have a significant effect on obesity rates because people will substitute towards consuming excessive calories in other ways.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 2
This is a question a psychologist is better at answering. Are people aware of all the calories they assume? I do not think so.
Uncertain 5

Online Sales Taxes

Subjecting online sales from out-of-state vendors to the same retail sales taxes imposed on in-state sales would raise more tax revenue in the states making this change while reducing the pro-online bias of current policy.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 7

Cable-Satellite TV Fees

Consumers would not necessarily be better off if cable and satellite TV firms were required to offer a la carte pricing for individual channels, because the networks' programming charges and the satellite-and-cable fees could adjust in response to this rule.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
No Opinion
Agree 5

Healthcare and Taxes

Long run fiscal sustainability in the U.S. will require cuts in currently promised Medicare and Medicaid benefits and/or tax increases that include higher taxes on households with incomes below $250,000.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 7
Agree 8

Europe

Question A:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 6
Disagree 6

Question B: If Germany fails to bail out the southern tier of Europe, its own economy will be hurt more — because of output and asset losses — than it would be by an unconditional bailout.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 1
Uncertain 5

Question C: The main reason other eurozone countries need to worry about Greek banks losing access to ECB support is because the ensuing chaos in Greece could trigger bank runs in peripheral countries.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Agree 6

Laffer Curve

Question A: A cut in federal income tax rates in the US right now would lead to higher GDP within five years than without the tax cut.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 4
If the cut is permanent
Uncertain 5

Question B: A cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 6
Strongly Disagree 7

China-US Trade

Question A: Trade with China makes most Americans better off because, among other advantages, they can buy goods that are made or assembled more cheaply in China.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 8

Question B: Some Americans who work in the production of competing goods, such as clothing and furniture, are made worse off by trade with China.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Agree 8

College Tuition

An important reason why private college and university tuition has risen faster than the CPI during the past few decades is because competition for faculty members — whose potential earnings in other sectors have steadily improved — has driven up their pay faster than their productivity.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Uncertain 5

Fiscal Cliff

If the fiscal changes that are planned under current US law take place next year — including Bush era tax cuts expiring, Medicare payment rates to doctors being cut, the AMT applying to many more taxpayers, and automatic cuts in defense and non-defense discretionary spending kicking in — then US real GDP growth in 2013 will be lower than it would be under the CBO's alternative fiscal scenario, in which the above changes do not occur.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 1
The worst aspect is the perduring uncertainty on what will happen
Agree 7

Fracking

New technology for fracking natural gas, by lowering energy costs in the United States, will make US industrial firms more cost competitive and thus significantly stimulate the growth of US merchandise exports.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 4
In the answer I am ignoring any potential environemtal impact
Disagree 5

Cuba's Economy

Cuba’s low per-capita income growth — 1.2 percent per year since 1960 —has more to do with Cuba’s own economic policies than with the U.S. embargo on trade and tourism.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Agree 6

French Labor Policies

Question A: Reducing the minimum retirement age in France from 62 back to age 60, permanently, would reduce long-term French economic growth and substantially raise French debt relative to GDP over time.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 5
Agree 7

Question B: France’s overall employment is higher today because of the 35 hour work week than it would be without a limit on weekly hours.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 2
Disagree 6

Price Gouging

Connecticut should pass its Senate Bill 60, which states that during a “severe weather event emergency, no person within the chain of distribution of consumer goods and services shall sell or offer to sell consumer goods or services for a price that is unconscionably excessive.”

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did Not Answer
Disagree 6

Security Screening

The former head of the Transportation Security Administration is correct in arguing that randomizing airport “security procedures encountered by passengers (additional upper-torso pat-downs, a thorough bag search, a swab test of carry-ons, etc.), while not subjecting everyone to the full gamut" would make it "much harder for terrorists to learn how to evade security procedures."

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 1
Uncertain 5

Ticket Resale

Laws that limit the resale of tickets for entertainment and sports events make potential audience members for those events worse off on average.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 4
Agree 7

Fannie and Freddie

Prior to the crisis, the benefits from the funding advantage that Fannie Mae and Freddie Mac had by virtue of perceived government support mostly went to their shareholders, rather than into substantially lower interest rates on residential mortgages.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Did not answer
Uncertain 5

School Vouchers

Question A: If public school students 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), most would be better off.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 4
Uncertain 6

Question B: The main drawback to allowing all public school students to take 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) would be that some students would not make an active choice and would be left with much worse peers and a weaker school.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 7
Problem can be solved with vouchers that incentivate good schools to search and enroll underpivileged kids
-see background information here
Agree 5

Too Big to Fail

Question A: The average size of the 19 financial firms that just completed the Federal Reserve stress tests (i.e. the CCAR) would be substantially smaller if they did not have implicit government support.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 3
Uncertain 5

Question B: The 19 financial firms that just completed the Federal Reserve stress tests (i.e. the CCAR) are big primarily because of economies of scale and scope, rather than because of implicit government support.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 3
Uncertain 5

Gasoline Prices

Changes in U.S. gasoline prices over the past 10 years have predominantly been due to market factors rather than U.S. federal economic or energy policies.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 3
Agree 8

Free Trade

Question A: Freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 6
Agree 8

Question B: On average, citizens of the U.S. have been better off with the North American Free Trade Agreement than they would have been if the trade rules for the U.S., Canada and Mexico prior to NAFTA had remained in place.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 6
The key word is on average: there are large distributional effects.
Agree 6

Bank Bailouts

Because the U.S. Treasury bailed out and backstopped banks (by injecting equity into them in late 2008, and later committing to provide public capital to any banks that failed the stress tests and could not raise private capital), the U.S. unemployment rate was lower at the end of 2010 than it would have been without these measures.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 5
The question presumes Paulson’s forced alternative. If the only choice is between evil and Armageddon, evil might look ok.
Agree 6

Health-Care Licensing

Loosening current licensing restrictions on the range of services that nurses, physician assistants, dental hygienists and pharmacists are permitted to perform would help patients on balance, because the additional safety risks would be small compared to the decreased costs in waiting time and fees.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 3
Agree 6

Short Selling

Bans on the short selling of financial securities, such as stocks and government bonds, lead to prices that are further, on average, from their fundamental values.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 9
Agree 5

Economic Stimulus

Question A: Because of the American Recovery and Reinvestment Act of 2009, the U.S. unemployment rate was lower at the end of 2010 than it would have been without the stimulus bill.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 6
At the very minimum the transfer to the states prevented them from firing state employees. But I do not know how big the overall effect was
Agree 7

Question B:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 4
Uncertain 6

Rent Control

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Disagree 6
Disagree 6

Executive Pay

Question A:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Uncertain 3
If you had asked the question the other way (we know that they are paid their marginal valuation) I would have strongly diagreed.
Uncertain 4

Question B:

Mandating that U.S. publicly listed corporations must allow shareholders to cast a non-binding vote on executive compensation was a good idea. 

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 9
The cost is minimal, while the benefit of transparency and societal pressure against excesses high.
Uncertain 5

Inequality and Skills

One of the leading reasons for rising U.S. income inequality over the past three decades is that technological change has affected workers with some skill sets differently than others.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 7
The statement is likely to be true but it does not address why the technology moved that way.
Agree 7

Gold Standard

Question A:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Disagree 8
Strongly Disagree 8

Question B: There are many factors besides US inflation risk that influence the current dollar price of gold.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 10
Strongly Agree 9

Congestion Pricing

In general, using more congestion charges in crowded transportation networks — such as higher tolls during peak travel times in cities, and peak fees for airplane takeoff and landing slots — and using the proceeds to lower other taxes would make citizens on average better off.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
Strongly Agree 8

Carbon Tax

A tax on the carbon content of fuels would be a less expensive way to reduce carbon-dioxide emissions than would a collection of policies such as “corporate average fuel economy” requirements for automobiles.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 6
Strongly Agree 7

Drug Use Policies

Question A: All else equal, making drugs illegal raises street prices for those drugs because suppliers require extra compensation for the risk of incarceration and other punishments.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 10
Agree 8

Question B: The Netherlands restrictions on “soft drugs” combined with a moderate tax aimed at deterring their consumption would have lower social costs than continuing to prohibit use of those drugs as in the US. (Click here for a summary of the Netherlands restrictions.)

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 7
Agree 5

Italy's Debt

Question A:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 6
Agree 6

Question B:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Agree 6
Uncertain 5

Healthcare

There are no consequential distortions created by the tax preference that favors obtaining health insurance through employers.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Disagree 9
Strongly Disagree 8

Buy American

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Disagree 5
Disagree 5

Tax Reform

Question A: Eliminating tax deductions for non-investment personal interest expenses (e.g., on mortgages), with reductions in personal tax rates that are both budget neutral and keep the burden of taxes by income group the same, would lead to more efficient financing decisions by individuals.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 9
Agree 7

Question B: Reducing the deductibility of interest expenses for non-financial businesses to equalize the overall tax cost of debt and equity financing, while using the extra revenue to reduce personal and corporate tax rates in a budget neutral fashion that also keeps the burden of taxes the same, would lead to more efficient financing decisions by firms.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 9
Agree 7

Stock Prices

Question A: Unless they have inside information, very few investors, if any, can consistently make accurate predictions about whether the price of an individual stock will rise or fall on a given day.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
Strongly Agree 8

Question B: Plausible expectations of future dividends, discounted using a plausible risk-adjusted interest rate, explain well the level of stock prices for recently listed internet businesses in 1999.  

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Disagree 8
Disagree 7

Exchange Rates

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 6
Agree 6

Education

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).

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 5
Uncertain 6

Taxes

Question A: All else equal, permanently raising the federal marginal tax rate on ordinary income by 1 percentage point for those in the top (i.e., currently 35%) tax bracket would increase federal tax revenue over the next 10 years.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Agree 8
The negative effect on growth would have to be huge to offset the tax revenues raised.
Agree 8

Question B:

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.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Disagree 10
cumulative deficit is 10 trillion. taxable income at the 35% 600 billions. to halve the deficit you will need 100% tax rate. Impossible
Disagree 7

Monetary Policy

All else equal, the Fed's new plan to increase the maturity of its Treasury holdings will boost expected real GDP growth for calendar year 2012 by at least one percentage point.

Vote Confidence Comments Median Survey Vote Median Survey Confidence
Strongly Disagree 9
We Are not even sure it can impact the real rate, let alone growth
Disagree 4

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and are being analyzed for an article to appear in a leading peer-reviewed journal.

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