Tuesday, July 3rd, 2012 4:07 pm

Europe

Question A:

Assuming that Germany eventually agrees to backstop the debt of southern European countries, the eurozone as a whole will be better off if that bailout is unconditional, rather than accompanied by the labor market reforms and future budget controls that Germany is demanding of countries in return.

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: If Germany fails to bail out the southern tier of Europe, its own economy will be hurt more — because of output and asset losses — than it would be by an unconditional bailout.

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 C: The main reason other eurozone countries need to worry about Greek banks losing access to ECB support is because the ensuing chaos in Greece could trigger bank runs in peripheral countries.

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 Disagree 6
Bio/Vote History
         
Alesina Alberto Alesina Harvard Strongly Disagree 10
The trde off has to be help from Gaermany in exchange for reforms and conditionality.
Bio/Vote History
         
Altonji Joseph Altonji Yale Disagree 3
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Disagree 7
Bio/Vote History
         
Autor David Autor MIT No Opinion
Bio/Vote History
         
Baicker Katherine Baicker Harvard No Opinion
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 1
Bio/Vote History
         
Chetty Raj Chetty Harvard Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 5
Depends on how we measure "eurozone as a whole"
Bio/Vote History
         
Currie Janet Currie Princeton Uncertain 2
Bio/Vote History
         
Cutler David Cutler Harvard Did Not Answer
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 5
Too many other contingencies unspecified to be sure. Details matter. As does democracy.
Bio/Vote History
         
Duffie Darrell Duffie Stanford Disagree 3
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 6
Longer term budget controls would be better than shorter term.
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Disagree 6
The answer depends, in part, on how that conditionality is designed and implemented, which is not specified in the question, unfortunately.
Bio/Vote History
         
Fair Ray Fair Yale Uncertain 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Disagree 8
Structural reforms are needed, but there is a difference between austerity as punishment and well-designed reforms.
Bio/Vote History
         
Goldin Claudia Goldin Harvard Agree 2
Depends how unconditional
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Uncertain 7
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 8
Bio/Vote History
         
Hall Robert Hall Stanford Disagree 6
Although the ideal regime to bring discipline to economic policies of the southern Euro countries would be self-reliance, conditions are 2nd
Bio/Vote History
         
Holmström Bengt Holmström MIT Disagree 6
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Disagree 6
Bio/Vote History
         
Judd Kenneth Judd Stanford Disagree 5
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Strongly Disagree 7
Without the structural reforms these countries medium term outlook is grim.
Bio/Vote History
         
Klenow Pete Klenow Stanford Disagree 5
Conditionality could help countries overcome political opposition to painful but necessary policies.
-see background information here
-see background information here
Bio/Vote History
         
Lazear Edward Lazear Stanford Disagree 7
Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Answer
Bio/Vote History
         
Maskin Eric Maskin Harvard Disagree 7
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 8
Too many conditionals to give clean answer, particularly fiscal issues.
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Agree 10
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Uncertain 4
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Disagree 8
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Did Not Answer
Bio/Vote History
         
Shin Hyun Song Shin Princeton Uncertain 7
Bio/Vote History
         
Stock James Stock Harvard Did Not Answer
Bio/Vote History
         
Stokey Nancy Stokey Chicago Strongly Disagree 7
Without structural reforms in the highly indebted countries, bailouts won't work. The Germans aren't going to bankroll the south forever.
Bio/Vote History
         
Thaler Richard Thaler Chicago No Opinion
All these questions require better knowledge of details than I possess.
Bio/Vote History
         
Udry Christopher Udry Yale Uncertain 1
Bio/Vote History
         
Zingales Luigi Zingales Chicago Disagree 6
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Uncertain 4
Bio/Vote History
         
Alesina Alberto Alesina Harvard Uncertain 5
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 3
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Disagree 5
Bio/Vote History
         
Autor David Autor MIT No Opinion
Bio/Vote History
         
Baicker Katherine Baicker Harvard No Opinion
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 1
Bio/Vote History
         
Chetty Raj Chetty Harvard Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Agree 5
Bio/Vote History
         
Currie Janet Currie Princeton Uncertain 1
Bio/Vote History
         
Cutler David Cutler Harvard Did Not Answer
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 4
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 3
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Uncertain 1
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Uncertain 6
Unfortunately, there exist no models or evidence of the costs of collapse to Germany (economists are supposed to use models and evidence).
Bio/Vote History
         
Fair Ray Fair Yale Uncertain 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Agree 6
Most likely. But Germany might be able to find alterntives in Asia or emerging Europe.
Bio/Vote History
         
Goldin Claudia Goldin Harvard Agree 2
Once again, a lot depends on the level of unconditionality
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Agree 7
in te end, Germany is going to subsidize to keep it together or else it's going to come apart.
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Uncertain 1
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 3
Seems like Europe and Germany are in for bad times no matter what. There's no way Germany could bail out everything.
Bio/Vote History
         
Holmström Bengt Holmström MIT Uncertain 5
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Disagree 8
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 4
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Uncertain 7
Too many factors about the details of a break up and the policies followed under a bailout need to be specified to answer this.
Bio/Vote History
         
Klenow Pete Klenow Stanford Uncertain 3
Bio/Vote History
         
Lazear Edward Lazear Stanford Disagree 6
Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Answer
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 6
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 7
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Agree 10
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Uncertain 3
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Disagree 8
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Did Not Answer
Bio/Vote History
         
Shin Hyun Song Shin Princeton Agree 7
Bio/Vote History
         
Stock James Stock Harvard Did Not Answer
Bio/Vote History
         
Stokey Nancy Stokey Chicago Uncertain 1
Bio/Vote History
         
Thaler Richard Thaler Chicago No Opinion
Bio/Vote History
         
Udry Christopher Udry Yale Uncertain 1
Bio/Vote History
         
Zingales Luigi Zingales Chicago Uncertain 1
Bio/Vote History
         

Question C Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Agree 5
Bio/Vote History
         
Alesina Alberto Alesina Harvard Agree 7
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 2
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 No Opinion
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 1
Bio/Vote History
         
Chetty Raj Chetty Harvard Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 5
That is a reason certainly.
Bio/Vote History
         
Currie Janet Currie Princeton Agree 5
Bio/Vote History
         
Cutler David Cutler Harvard Did Not Answer
Bio/Vote History
         
Deaton Angus Deaton Princeton Strongly Agree 7
Bio/Vote History
         
Duffie Darrell Duffie Stanford Strongly Agree 8
Banks runs are often triggered by self fulfulling expectations. A run in Greece could tip expectations toward a run elsewhere.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Agree 6
To bank runs, I would add higher interest rates and general uncertainty.
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Agree 8
Bio/Vote History
         
Fair Ray Fair Yale Agree 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Agree 8
Bio/Vote History
         
Goldin Claudia Goldin Harvard Agree 2
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Strongly Agree 6
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Agree 5
Bio/Vote History
         
Hall Robert Hall Stanford Disagree 7
We should care about Greece and apply tough love for its own sake, not just the stability of other countries.
Bio/Vote History
         
Holmström Bengt Holmström MIT Strongly Agree 8
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Uncertain 6
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 4
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Strongly Agree 7
Greece is doomed absent a complete bailout. But then how do Port, Italy, Spain not get the same deal? When Greece collapses watch for runs
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 5
They might like the precedent too (if the ECB buys Greek debt, it should buy the debt of Spain, Italy, etc. as well).
Bio/Vote History
         
Lazear Edward Lazear Stanford No Opinion
Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Answer
Bio/Vote History
         
Maskin Eric Maskin Harvard Agree 7
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 7
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Agree 10
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 3
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Agree 8
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Did Not Answer
Bio/Vote History
         
Shin Hyun Song Shin Princeton Agree 8
Bio/Vote History
         
Stock James Stock Harvard Did Not Answer
Bio/Vote History
         
Stokey Nancy Stokey Chicago Agree 3
Bio/Vote History
         
Thaler Richard Thaler Chicago No Opinion
Bio/Vote History
         
Udry Christopher Udry Yale Agree 2
Bio/Vote History
         
Zingales Luigi Zingales Chicago Strongly Agree 7
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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