Tuesday, September 09, 2014 7:48am

Infrastructure (revisited)

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. (The experts panel previously voted on this question on May 23, 2013. Those earlier results can be found here.)

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. (The experts panel previously voted on this question on May 23, 2013. Those earlier results can be found here.)

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 6
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 7
Bio/Vote History
         
Autor David Autor MIT Agree 6
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 3
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Uncertain 1
How do we know that the US has underspent? Investment will probably raise incomes for Keynesian reasons but will it promote growth?
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 4
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Agree 4
Bio/Vote History
         
Chetty Raj Chetty Harvard Agree 5
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 5
Bio/Vote History
         
Currie Janet Currie Princeton Agree 6
Bio/Vote History
         
Cutler David Cutler Harvard Strongly Agree 6
Bio/Vote History
         
Deaton Angus Deaton Princeton Strongly Agree 8
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 5
Public infrastructure is valuable, and the premise of underspending in this area seems correct. Hence, the conclusion.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 8
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Strongly Agree 7
Bio/Vote History
         
Einav Liran Einav Stanford Agree 6
Bio/Vote History
         
Fair Ray Fair Yale No Opinion
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Did Not Answer
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Agree 6
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Agree 6
public goods matter if chosen well
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 7
seems likely but spending not determined by costs and benefits see innovative proposal below lots of efficiency gains w pricing policies
-see background information here
Bio/Vote History
         
Hall Robert Hall Stanford Did Not Answer
Bio/Vote History
         
Hart Oliver Hart Harvard Agree 10
I would say increase average welfare rather than income. There are surely many potential projects where the social benefit exceeds cost.
Bio/Vote History
         
Holmström Bengt Holmström MIT Strongly Agree 7
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Strongly Agree 9
In the long run.
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 3
I interpret "underspending" to mean that spending more would increase economic productivity. So, yes.
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Agree 6
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 7
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 3 Bio/Vote History
         
Levin Jonathan Levin Stanford Agree 5
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 7
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 5
I would rather this be about all kinds, not just physical.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 5
Bio/Vote History
         
Samuelson Larry Samuelson Yale Agree 8
It would increase welfare; income is more difficult to assess.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Strongly Agree 7
Better regulation and congestion pricing would also help.
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 6
This is a no-brainer as regards roads and bridges, but the federal government doesn't do railroads and rarely if ever does airports.
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Strongly Agree 9
Bio/Vote History
         
Shimer Robert Shimer Chicago Uncertain 3
Bio/Vote History
         
Stokey Nancy Stokey Chicago Did Not Answer
Bio/Vote History
         
Thaler Richard Thaler Chicago Strongly Agree 7
Bio/Vote History
         
Udry Christopher Udry Yale Strongly Agree 7
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Uncertain 7
Past evidence suggests that there will be waste and corruption (a lot of corruption!). But this does not imply that average NPV is negative.
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 8
Both public and private sector investments are risky. Some infrastructure projects will fail even when most have high social returns.
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 5
Bio/Vote History
         
Autor David Autor MIT Disagree 4
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 2
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Agree 7
Many does not have to mean most, and on average returns may be quite positive. We just don't know enough right now.
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Disagree 3
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Uncertain 3
Bio/Vote History
         
Chetty Raj Chetty Harvard Uncertain 1
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 3
Bio/Vote History
         
Currie Janet Currie Princeton Agree 6
Bio/Vote History
         
Cutler David Cutler Harvard Uncertain 5
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 6
Bio/Vote History
         
Duffie Darrell Duffie Stanford Uncertain 5
The accounting return to the government would be low, but the total returns, include positive social spillovers, could be moderately good.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 1
Many projects would no doubt be mistakes, but many is far from most. Most would probably be good investments.
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Uncertain 5
Bio/Vote History
         
Einav Liran Einav Stanford Uncertain 5
Bio/Vote History
         
Fair Ray Fair Yale No Opinion
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Did Not Answer
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Disagree 6
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Agree 6
hard to argue with the reality that some money will end up in powerful districts without much need for it when congress controls
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 7
currently infra spending does not aim to maximize returns. c. winston research says returns are declining but more research is critical
Bio/Vote History
         
Hall Robert Hall Stanford Did Not Answer
Bio/Vote History
         
Hart Oliver Hart Harvard Uncertain 5
Perhaps sometimes true in the past but I don't think it's inevitable. Projects like the interstate highways are notable exceptions.
Bio/Vote History
         
Holmström Bengt Holmström MIT Disagree 5
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Disagree 8
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 5
The same is true of many investments in the private sector. Hard to imagine the government having a better record than the private sector.
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Strongly Agree 10
Just consider the high speed rail system in California.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 3
Depends on what many means, but the perpetual repaving of roads in Chicago is not that atypical of many public projects.
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 6 Bio/Vote History
         
Levin Jonathan Levin Stanford Uncertain 4
Bio/Vote History
         
Maskin Eric Maskin Harvard Disagree 5
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 1
Poorly worded. Surely "many" out of 50K miles, but probably not "most."
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Disagree 4
Bio/Vote History
         
Samuelson Larry Samuelson Yale Agree 5
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Uncertain 6
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Uncertain 6
I could agree with "some," but "many" is not obvious. Also, railroads are privately funded.
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Uncertain 1
Bio/Vote History
         
Shimer Robert Shimer Chicago Agree 7
Bio/Vote History
         
Stokey Nancy Stokey Chicago Did Not Answer
Bio/Vote History
         
Thaler Richard Thaler Chicago Agree 3
Same is true for private sector!
Bio/Vote History
         
Udry Christopher Udry Yale Strongly Agree 6
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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