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.
Responses
Responses weighted by each expert's confidence
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.
Responses
Responses weighted by each expert's confidence
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.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
|
|
||||
 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
 Joseph Altonji |
Yale | Bio/Vote History | ||
|
|
||||
 Alan Auerbach |
Berkeley | Bio/Vote History | ||
|
|
||||
 David Autor |
MIT | Bio/Vote History | ||
|
Long term unemployed workers are costly; many collect SSDI. Aiding GM was likely a cost effective welfare/employment program, all else aside
|
||||
 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
|
|
||||
 Marianne Bertrand |
Chicago | Bio/Vote History | ||
|
|
||||
 Raj Chetty |
Harvard | Bio/Vote History | ||
|
|
||||
 Judith Chevalier |
Yale | Bio/Vote History | ||
|
On net I agree, but the future costs are difficult to measure.
|
||||
 Janet Currie |
Princeton | Bio/Vote History | ||
|
|
||||
 David Cutler |
Harvard | Bio/Vote History | ||
|
|
||||
 Angus Deaton |
Princeton | Bio/Vote History | ||
|
|
||||
 Darrell Duffie |
Stanford | Bio/Vote History | ||
|
Absent those bailouts, a depression was much more likely. The moral hazard is now being reduced by new rules, such as for capital.
|
||||
 Aaron Edlin |
Berkeley | Bio/Vote History | ||
|
The past bailout, by itself, won't ensure the next one, nor would a refusal to bail firms out set a binding precedent.
|
||||
 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
|
"Bailing out the banks" is not a very precise characterization of the policies of 2008-9.
|
||||
 Ray Fair |
Yale | Bio/Vote History | ||
|
Too many possibilities, and hard to measure costs and benefits.
|
||||
 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
|
The consequenses (economic and social) of a potential financial collapse would have been immense.
|
||||
 Claudia Goldin |
Harvard | Bio/Vote History | ||
|
|
||||
 Austan Goolsbee |
Chicago | Bio/Vote History | ||
|
may not cost $ but was still an outrage we got to that point
|
||||
 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
|
Yes. Credit markets were frozen and that was having a terrible impact on the economy. Check out a graph of the TED spread.
|
||||
 Robert Hall |
Stanford | Bio/Vote History | ||
|
Not compared to an ideal policy of an orderly reorganization imposing losses on creditors according to seniority. But better than chaotic.
|
||||
 Bengt Holmström |
MIT | Did Not Answer | Bio/Vote History | |
|
|
||||
 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
 Kenneth Judd |
Stanford | Bio/Vote History | ||
|
|
||||
 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
Bankruptcy and liquidation would have been worse, but could have nationalized a couple of the weakest ones, especially Citi.
-see background information here |
||||
 Pete Klenow |
Stanford | Bio/Vote History | ||
 Edward Lazear |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
|
|
||||
 Eric Maskin |
Harvard | Bio/Vote History | ||
|
|
||||
 William Nordhaus |
Yale | Bio/Vote History | ||
|
|
||||
 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
|
|
||||
 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
|
|
||||
 José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
|
|
||||
 Richard Schmalensee |
MIT | Bio/Vote History | ||
|
|
||||
 Hyun Song Shin |
Princeton | Bio/Vote History | ||
|
|
||||
 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
|
|
||||
 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
|
Many details could have been improved but you could do nothing.
|
||||
 Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
|
|
||||
 Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
|
|
||||
Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
Daron Acemoglu |
MIT | Bio/Vote History | ||
|
|
||||
|
Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Joseph Altonji |
Yale | Bio/Vote History | ||
|
|
||||
|
Alan Auerbach |
Berkeley | Bio/Vote History | ||
|
|
||||
|
David Autor |
MIT | Bio/Vote History | ||
|
Putting costs aside, this is almost certainly true since many displaced workers would not have found reemployment by now in bad economy.
|
||||
|
Katherine Baicker |
University of Chicago | Bio/Vote History | ||
|
|
||||
|
Marianne Bertrand |
Chicago | Bio/Vote History | ||
|
|
||||
|
Raj Chetty |
Harvard | Bio/Vote History | ||
|
|
||||
|
Judith Chevalier |
Yale | Bio/Vote History | ||
|
|
||||
|
Janet Currie |
Princeton | Bio/Vote History | ||
|
|
||||
|
David Cutler |
Harvard | Bio/Vote History | ||
|
|
||||
|
Angus Deaton |
Princeton | Bio/Vote History | ||
|
|
||||
|
Darrell Duffie |
Stanford | Bio/Vote History | ||
|
To answer this would require a reliable and detailed quantitative macroeconomic model, or at least expert empirical knowledge.
|
||||
|
Aaron Edlin |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Barry Eichengreen |
Berkeley | Bio/Vote History | ||
|
While I agree, I would have preferred seeing the gov stand behind warantees and provide debtor in possession finance only.
|
||||
|
Ray Fair |
Yale | Bio/Vote History | ||
|
Probably yes, but a very small effect.
|
||||
|
Pinelopi Goldberg |
Yale | Bio/Vote History | ||
|
In the short run, it seems uncontroversial.
|
||||
|
Claudia Goldin |
Harvard | Bio/Vote History | ||
|
|
||||
|
Austan Goolsbee |
Chicago | Bio/Vote History | ||
|
as with banks, even if true, outrageous we ever got to that position
|
||||
|
Michael Greenstone |
University of Chicago | Bio/Vote History | ||
|
the strongest argument is US auto manufacturing would be better off in the long run, which may or may not be true, but v doubtful by 2010
|
||||
|
Robert Hall |
Stanford | Bio/Vote History | ||
|
Again, it would have been better to reorganize with suitable losses on the junior creditors. This would not have resulted in higher unemp.
|
||||
|
Bengt Holmström |
MIT | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Kenneth Judd |
Stanford | Bio/Vote History | ||
|
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
But traditional bankruptcy and restructuring was an option too. Challenges for financial and non-financial firms are totally different.
-see background information here |
||||
|
Pete Klenow |
Stanford | Bio/Vote History | ||
|
|
||||
|
Edward Lazear |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jonathan Levin |
Stanford | Bio/Vote History | ||
|
|
||||
|
Eric Maskin |
Harvard | Bio/Vote History | ||
|
|
||||
|
William Nordhaus |
Yale | Bio/Vote History | ||
|
|
||||
|
Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Emmanuel Saez |
Berkeley | Bio/Vote History | ||
|
|
||||
|
José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Richard Schmalensee |
MIT | Bio/Vote History | ||
|
|
||||
|
Hyun Song Shin |
Princeton | Bio/Vote History | ||
|
|
||||
|
Nancy Stokey |
University of Chicago | Bio/Vote History | ||
|
|
||||
|
Richard Thaler |
Chicago Booth | Bio/Vote History | ||
|
There was no private money available.
|
||||
|
Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
|
|
||||
Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
Daron Acemoglu |
MIT | Bio/Vote History | ||
|
|
||||
|
Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Joseph Altonji |
Yale | Bio/Vote History | ||
|
|
||||
|
Alan Auerbach |
Berkeley | Bio/Vote History | ||
|
|
||||
|
David Autor |
MIT | Bio/Vote History | ||
|
|
||||
|
Katherine Baicker |
University of Chicago | Bio/Vote History | ||
|
|
||||
|
Marianne Bertrand |
Chicago | Bio/Vote History | ||
|
|
||||
|
Raj Chetty |
Harvard | Bio/Vote History | ||
|
|
||||
|
Judith Chevalier |
Yale | Bio/Vote History | ||
|
|
||||
|
Janet Currie |
Princeton | Bio/Vote History | ||
|
|
||||
|
David Cutler |
Harvard | Bio/Vote History | ||
|
|
||||
|
Angus Deaton |
Princeton | Bio/Vote History | ||
|
|
||||
|
Darrell Duffie |
Stanford | Bio/Vote History | ||
|
The bankruptcy law was circumvented. Absent unstated exigent (e.g. systemic) reasons, upsetting creditor rights is inefficient.
|
||||
|
Aaron Edlin |
Berkeley | Bio/Vote History | ||
|
Incentive effects are real. Incentive effects from a decision to bail out are overstated.
|
||||
|
Barry Eichengreen |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Ray Fair |
Yale | Bio/Vote History | ||
|
Again, hard to measure costs and benefits.
|
||||
|
Pinelopi Goldberg |
Yale | Bio/Vote History | ||
|
|
||||
|
Claudia Goldin |
Harvard | Bio/Vote History | ||
|
|
||||
|
Austan Goolsbee |
Chicago | Bio/Vote History | ||
|
|
||||
|
Michael Greenstone |
University of Chicago | Bio/Vote History | ||
|
|
||||
|
Robert Hall |
Stanford | Bio/Vote History | ||
|
See previous answer
|
||||
|
Bengt Holmström |
MIT | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Kenneth Judd |
Stanford | Bio/Vote History | ||
|
|
||||
|
Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
|
Costs will appear in the next crisis; the precedent for a bailout is now set. Reduced incentives for the private sector to hold dry powder.
|
||||
|
Pete Klenow |
Stanford | Bio/Vote History | ||
|
Edward Lazear |
Stanford | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jonathan Levin |
Stanford | Bio/Vote History | ||
|
Not at all obvious at the time decision was made, and I expect many would disagree now.
|
||||
|
Eric Maskin |
Harvard | Bio/Vote History | ||
|
|
||||
|
William Nordhaus |
Yale | Bio/Vote History | ||
|
|
||||
|
Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
|
|
||||
|
Emmanuel Saez |
Berkeley | Bio/Vote History | ||
|
|
||||
|
José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Richard Schmalensee |
MIT | Bio/Vote History | ||
|
Moral hazard seems less of a problem with non-financial corporations.
|
||||
|
Hyun Song Shin |
Princeton | Bio/Vote History | ||
|
|
||||
|
Nancy Stokey |
University of Chicago | Bio/Vote History | ||
|
|
||||
|
Richard Thaler |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
|
|
||||
