Thursday, May 23, 2013 8:52am

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.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

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.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Agree 4
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Strongly Agree 8
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 3
Bio/Vote History
         
Autor David Autor MIT Agree 6
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 3
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 3
Bio/Vote History
         
Chetty Raj Chetty Harvard Agree 6
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 6
Bio/Vote History
         
Currie Janet Currie Princeton Agree 7
Bio/Vote History
         
Cutler David Cutler Harvard Strongly Agree 8
Bio/Vote History
         
Deaton Angus Deaton Princeton Strongly Agree 9
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 3
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 5
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Did Not Answer
Bio/Vote History
         
Fair Ray Fair Yale No Opinion
One needs to know how the projects will be financed.
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Agree 5
Bio/Vote History
         
Goldin Claudia Goldin Harvard Uncertain 3
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Strongly Agree 7
18 different kinds of coffee but every way to get to them has a pothole
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 7
yes but possible there are relatively few places w infrastructure deficit (innovative proposal below) lots of opp's eff gains w pricing
-see background information here
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 8
Serious overspending currently on rail. Roads and bridges need user charges. Not many true public goods that call for higher spending.
Bio/Vote History
         
Holmström Bengt Holmström MIT Agree 5
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Disagree 9
The best evidence with anything like a CAUSAL character suggests that this is untrue. There is lots of junk correlational evidence: ignore.
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 4
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 5
Repairing bridges & roads would have been good to do over the last 5 years; the problem is nothing is really shovel ready so it takes time
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 2 Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Answer
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 8
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 1
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Agree 6
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 5
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Strongly Agree 8
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 4
Bio/Vote History
         
Shin Hyun Song Shin Princeton Did Not Answer
Bio/Vote History
         
Stokey Nancy Stokey Chicago Agree 5
Many roads and bridges need repair.
Bio/Vote History
         
Thaler Richard Thaler Chicago Strongly Agree 8
Borrowing at negative interest rates and high unemployement rates to stop bridges from collapsing is as close as we get to a no brainer.
Bio/Vote History
         
Udry Christopher Udry Yale Strongly Agree 6
Both of these statements, of course, can be true. The opportunity can be squandered.
Bio/Vote History
         
Zingales Luigi Zingales Chicago Did Not Answer
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Strongly Agree 7
Average return is likely to be because of underspending in many activities, but many will be adopted because of politics and have <0 returns
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 5
There will be some bad projects, but current infrastructure needs are very large.
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 3
Bio/Vote History
         
Autor David Autor MIT Disagree 6
Some will have low returns, of course. But the mean and median rate of return will likely be favorable.
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 4
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 3
Bio/Vote History
         
Chetty Raj Chetty Harvard Uncertain 5
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 5
"Many" will have low returns, because the political process doesn't always do a great job picking projects. But some will be very positive.
Bio/Vote History
         
Currie Janet Currie Princeton Agree 7
Bio/Vote History
         
Cutler David Cutler Harvard Strongly Disagree 8
Bio/Vote History
         
Deaton Angus Deaton Princeton Disagree 7
"Some" for sure, but many sounds like a majority.
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 3
Some of the returns may be lower than those in the private sector, but it may hard be get needed infrastructure but for the government.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 6
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Did Not Answer
Bio/Vote History
         
Fair Ray Fair Yale No Opinion
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Disagree 5
Bio/Vote History
         
Goldin Claudia Goldin Harvard Uncertain 3
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Strongly Agree 9
Have you been to John Murtha airport?
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 7
currently infra spending does not aim to maximize returns. c. winston research suggests returns are declining but more research is critical
Bio/Vote History
         
Hall Robert Hall Stanford Agree 8
True for rail. For other infrastructure, the main problem is not the spending, but rather the failure to impose appropriate user charges.
Bio/Vote History
         
Holmström Bengt Holmström MIT Disagree 5
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Agree 9
Best credibly CAUSAL evidence suggests this statement is, broadly speaking, correct. Of course, there are exceptions.
Bio/Vote History
         
Judd Kenneth Judd Stanford Uncertain 5
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 5
Depends on what "many" means, but dollar weighted we do overpay too often. See Calif high speed train
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 6 Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Answer
Bio/Vote History
         
Maskin Eric Maskin Harvard Disagree 6
interests rates are very low---suggesting that returns from public investment might well be good
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 1
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Disagree 6
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Uncertain 4
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Disagree 6
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 3
Depends importantly on whether earmarks play a significant role.
Bio/Vote History
         
Shin Hyun Song Shin Princeton Did Not Answer
Bio/Vote History
         
Stokey Nancy Stokey Chicago Uncertain 5
In the past both good and bad projects have been funded. The proportion of each? Hard to say without more careful study.
Bio/Vote History
         
Thaler Richard Thaler Chicago Uncertain 1
All depends on what you mean by many. Any portfolio of projects will included duds, in both private and public sector. Change many to some.
Bio/Vote History
         
Udry Christopher Udry Yale Agree 5
"Many" would surely have low returns. There are difficult empirical problems, but it seems historical experience on average has been good.
-see background information here
-see background information here
Bio/Vote History
         
Zingales Luigi Zingales Chicago Did Not Answer
Bio/Vote History
         

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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