Tuesday, July 12th, 2016 11:57 am

Brexit II

Question A: Because of the Brexit vote's outcome, the UK's real per-capita income level is likely to be lower a decade from now.

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: Because of the Brexit vote's outcome, the rest of the EU's real per-capita income level is likely to be lower a decade from now.

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 Uncertain 4
Probably lower, but too much uncertainty. The UK-EU deal likely to be similar to the status quo ante, so should not have too large an effect
Bio/Vote History
         
Alesina Alberto Alesina Harvard Uncertain 8
Bio/Vote History
         
Altonji Joseph Altonji Yale Strongly Agree 8
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 5
Bio/Vote History
         
Autor David Autor MIT Agree 5
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 1
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Agree 6
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 4
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Agree 8
Bio/Vote History
         
Chetty Raj Chetty Harvard Agree 4
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 7
There is substantial uncertainty about the contours of the going-forward relationship with the EU.
Bio/Vote History
         
Cutler David Cutler Harvard Disagree 3
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 7
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 3
Main factors: lost trade in goods and services, especially for London City, coupled with delayed investment due to policy uncertainty.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 2
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Agree 6
The outcome depends on policy, but "likely" is the operative word here.
Bio/Vote History
         
Einav Liran Einav Stanford Agree 3
Bio/Vote History
         
Fair Ray Fair Yale Agree 2
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Agree 4
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Did Not Answer
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Strongly Disagree 8
Brexit will cause big problems but in the short run. W/reasonable uk/eu terms, long run prospects no different (though Euro still doomed)
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 3
distributional consequences are less clear. form of trade deals will matter a great deal.
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 3
Way too complicated to call.
Bio/Vote History
         
Hart Oliver Hart Harvard Agree 8
A post-Brexit agreement between U.K. and E.U. is likely to involve trade barriers. This will reduce gains from trade. The U.K. will suffer.
Bio/Vote History
         
Holmström Bengt Holmström MIT Disagree 5
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Strongly Disagree 8
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Agree 8
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 8
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Uncertain 8
Pluses and minuses to vote. Minus for financial sector. Plus for innovation, experimentation and decentralization.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 5
Voter anger trumps econ considerations, but slowdown is underway and City of London is likely to shrink necessitating higher taxes
-see background information here
-see background information here
-see background information here
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 5
Bio/Vote History
         
Levin Jonathan Levin Stanford Uncertain 3
Hard to predict GDP levels ten years out, especially given uncertainty about what Brexit actually will mean.
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 7
Bio/Vote History
         
Nordhaus William Nordhaus Yale Strongly Agree 7
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 4
Bio/Vote History
         
Samuelson Larry Samuelson Yale Agree 8
The European Union has various structural problems, but exiting will lead to efficiency losses and to lower per capital income in the UK.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Agree 6
Less access to single market, specially in financial services, and immigration restrictions outweigh gains in deregulation and transfers.
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Strongly Agree 7
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Did Not Answer
Bio/Vote History
         
Shimer Robert Shimer Chicago Agree 3
Bio/Vote History
         
Thaler Richard Thaler Chicago Agree 5
This assumes they go through with it. Hoping reason prevails.
Bio/Vote History
         
Udry Christopher Udry Yale Agree 3
Very uncertain, because the path forward is so unclear.
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Agree 5
Two negative effects: greater uncertainty about the periphery's future, and absence of British lobbying for more open EU markets.
Bio/Vote History
         
Alesina Alberto Alesina Harvard Agree 8
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 7
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Uncertain 3
Bio/Vote History
         
Autor David Autor MIT Agree 5
Bio/Vote History
         
Baicker Katherine Baicker Harvard Uncertain 1
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Uncertain 6
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 5
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Agree 6
Bio/Vote History
         
Chetty Raj Chetty Harvard Agree 4
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 4 Bio/Vote History
         
Cutler David Cutler Harvard Disagree 3
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 7
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 6
Factors: lost trade in goods and services, increased EU-existential uncertainty, and reduced UK moderating influence on policy choices.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 2
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Disagree 6
Little long-run effect one way or the other, although there should be plenty of additional volatility in the short run.
Bio/Vote History
         
Einav Liran Einav Stanford Agree 2
Bio/Vote History
         
Fair Ray Fair Yale Agree 2
I assume you mean lower than had the vote gone the other way, not lower than today.
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Agree 3
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Did Not Answer
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Strongly Disagree 9
See above. Switzerland like deal with uk will have little lasting damage. But Euro doomed either way.
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 3
form of trade deals will matter a great deal.
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 3
Bio/Vote History
         
Hart Oliver Hart Harvard Agree 8
Both sides gain from trade and so the EU will also suffer. The per capita loss is likely to be smaller simply because the EU is bigger.
Bio/Vote History
         
Holmström Bengt Holmström MIT Disagree 5
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Uncertain 8
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Agree 7
Bio/Vote History
         
Judd Kenneth Judd Stanford Uncertain 6
The economic impact rest of EU is unclear since UK is less than 20% of EU. If Brexit leads to EU collapse then impact will be bad.
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Disagree 2
Minus = short-term instability. Plus = may lead to less centralization, more innovation. Eurozone as is = problematic economically.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 3
Stability of rest of the EU much more in doubt. If anyone else leaves big transition costs for everyone. The politics around this are bad.
-see background information here
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 5
Bio/Vote History
         
Levin Jonathan Levin Stanford Uncertain 3
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 7
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 2
Excluding migrants from capita for both cases.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 4
Bio/Vote History
         
Samuelson Larry Samuelson Yale Agree 8
The effect on the EU will be smaller than that on the UK, unless the European Union unravels further.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Uncertain 4
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Strongly Agree 6
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Did Not Answer
Bio/Vote History
         
Shimer Robert Shimer Chicago Agree 7
Bio/Vote History
         
Thaler Richard Thaler Chicago Strongly Agree 5
This is bad for the EU even if sanity is restored and especially if the Brexit process begins. Could unravel.
Bio/Vote History
         
Udry Christopher Udry Yale Agree 3
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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