Tuesday, June 16th, 2015 1:22 pm

Currency Manipulation

Question A: Economic analysis can identify whether countries are using their exchange rates to benefit their own people at the expense of their trading partners’ welfare.

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: Bank of Japan monetary policies that result in a weaker yen make Americans generally worse off.

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 No Opinion
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Disagree 5
Bio/Vote History
         
Autor David Autor MIT Uncertain 1
Bio/Vote History
         
Baicker Katherine Baicker Harvard No Opinion
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Disagree 6
Its hard to know whether the net effect of the manipulation is to benefit the average citizen, just some interest group or indeed no one.
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 1
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Did Not Answer
Bio/Vote History
         
Chetty Raj Chetty Harvard Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Did Not Answer
Bio/Vote History
         
Cutler David Cutler Harvard Uncertain 5
Bio/Vote History
         
Deaton Angus Deaton Princeton No Opinion
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 7
Yes, but it seems rare in practice that conditions support both detection of the strategy and effectiveness of the strategy by the "abuser".
-see background information here
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 7
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Uncertain 10
Bio/Vote History
         
Einav Liran Einav Stanford Uncertain 3
Bio/Vote History
         
Fair Ray Fair Yale Disagree 5
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Did Not Answer
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Did Not Answer
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Agree 3
"though twilight may be long, there is a difference between day and night"
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Uncertain 1
Bio/Vote History
         
Hall Robert Hall Stanford Disagree 2
Optimal tariff theory says that countries should raise their prices. So policies to lower prices by devaluing must be harmful.
Bio/Vote History
         
Hart Oliver Hart Harvard Disagree 5
The answer depends on whether prices are flexible or sticky,the importance of foreign inputs in domestic goods. So hard to assess welfare.
Bio/Vote History
         
Holmström Bengt Holmström MIT Uncertain 6
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley No Opinion
Bio/Vote History
         
Judd Kenneth Judd Stanford Uncertain 6
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Uncertain 1
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Disagree 7
Like the Volcker rule, the devil is in the details and most of the time it is very difficult to determine; rule very, very hard to write.
Bio/Vote History
         
Klenow Pete Klenow Stanford Uncertain 3 Bio/Vote History
         
Levin Jonathan Levin Stanford Agree 5
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 6
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 1
Have no idea of what this question means.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 3
Bio/Vote History
         
Samuelson Larry Samuelson Yale Uncertain 1
This is a difficult inference problem.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Disagree 8
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Disagree 3
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Uncertain 1
Bio/Vote History
         
Shimer Robert Shimer Chicago Uncertain 5
Exchange rate policy matters because of nominal rigidities and affects on global supply and demand. Identifying these situations is tricky.
Bio/Vote History
         
Thaler Richard Thaler Chicago Uncertain 1
Bio/Vote History
         
Udry Christopher Udry Yale No Opinion
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Uncertain 5
Americans benefit from cheaper Japanese goods and would not benefit from Japan in depression.
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale No Opinion
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Disagree 7
Bio/Vote History
         
Autor David Autor MIT Uncertain 1
Bio/Vote History
         
Baicker Katherine Baicker Harvard No Opinion
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Uncertain 7
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 1
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Did Not Answer
Bio/Vote History
         
Chetty Raj Chetty Harvard Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Did Not Answer
Bio/Vote History
         
Cutler David Cutler Harvard Uncertain 5
Bio/Vote History
         
Deaton Angus Deaton Princeton Disagree 7
Bio/Vote History
         
Duffie Darrell Duffie Stanford Disagree 6
America's cost in lower domestic output may have been recovered through better or cheaper substitutes from Japan.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Uncertain 7
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Disagree 10
Bio/Vote History
         
Einav Liran Einav Stanford No Opinion
Bio/Vote History
         
Fair Ray Fair Yale Uncertain 5
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Did Not Answer
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Did Not Answer
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Uncertain 1
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Uncertain 1
Bio/Vote History
         
Hall Robert Hall Stanford Disagree 3
Most Americans benefit because of lower prices of imports. Some lose because they are employed in industries competing with the devaluer.
Bio/Vote History
         
Hart Oliver Hart Harvard Uncertain 5
Again it depends on whether prices are flexible or sticky. Also Americans benefit from cheaper Japanese goods. So hard to say.
Bio/Vote History
         
Holmström Bengt Holmström MIT Agree 6
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Did Not Answer
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley No Opinion
Bio/Vote History
         
Judd Kenneth Judd Stanford Disagree 7
Some may lose, but a cheaper yen will benefit buyers of Japanese goods. Japan trades with many nations. Japanese gains do not imply US loss.
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Disagree 5
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Disagree 5
Will be good for us if japan grows and avoids a crisis. loose monetary policy one example of why a rule is so difficult
Bio/Vote History
         
Klenow Pete Klenow Stanford Uncertain 3
A weaker yen means a terms of trade *improvement* for the U.S.
Bio/Vote History
         
Levin Jonathan Levin Stanford No Opinion
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 6
Bio/Vote History
         
Nordhaus William Nordhaus Yale Disagree 3
No macro effect if US offsets with mon policy, and will help stabilize world economy. So no if cooperative policies.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Uncertain 5
Bio/Vote History
         
Samuelson Larry Samuelson Yale Disagree 6
The weak yen gives rise to winners and losers in the US; it is not clear that the net effect (even if we could measure it) is negative.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Disagree 8
Even if effective, BoJ policies to weaken yen would help some Americans while hurting others.
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Uncertain 4
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley No Opinion
Bio/Vote History
         
Shimer Robert Shimer Chicago Disagree 7
As usual, there are winners and losers from such policies
Bio/Vote History
         
Thaler Richard Thaler Chicago Uncertain 1
Bio/Vote History
         
Udry Christopher Udry Yale No Opinion
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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