Tuesday, February 24th, 2015 9:12 am

Greece

In 10 years, per capita purchasing power in Greece will be higher if — rather than continuing to service its debts over the next decade and complying with the budget rules currently in place — it refuses to accept a continuation of its current troika program and explicitly defaults on its debt held by the official sector.

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
Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Uncertain 7
Greece's problems are political not just macroeconomic. Unclear whether default will help. Syriza's approach so far goes in wrong direction
Bio/Vote History
         
Alesina Alberto Alesina Harvard Did Not Answer
Bio/Vote History
         
Altonji Joseph Altonji Yale Disagree 7
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Uncertain 5
Bio/Vote History
         
Autor David Autor MIT No Opinion
Bio/Vote History
         
Baicker Katherine Baicker Harvard No Opinion
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Agree 7
The debt overhang is very costly. Domestic demand is also a problem. And the government is busy fire-fighting rather than making policy.
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 2
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Disagree 5
One has to find the right/sustainable balance btw structural reforms that ultimately benefit the common man and some creative debt relief .
Bio/Vote History
         
Chetty Raj Chetty Stanford Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 3 Bio/Vote History
         
Cutler David Cutler Harvard Agree 4
Bio/Vote History
         
Deaton Angus Deaton Princeton Uncertain 3
Impossible to predict all the consequences and their effect on Greece.
Bio/Vote History
         
Duffie Darrell Duffie Stanford Agree 7
It's a tough tradeoff. A fresh start would help after some forced restructuring of labor markets, the civil service, and tax collection.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Uncertain 6
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Uncertain 5
Depends mainly on ancillary policies under the two scenarios which are now not possible to foresee.
Bio/Vote History
         
Einav Liran Einav Stanford No Opinion
Bio/Vote History
         
Fair Ray Fair Yale Uncertain 5
Too many possible effects to know the net effect.
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Uncertain 5
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Disagree 7
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Uncertain 10
They're in a hopeless situation now. But would they manage themselves better if they got out of the Euro than they did before they got in?
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Uncertain 2
Bio/Vote History
         
Hall Robert Hall Stanford Agree 3
Greece seems incapable of running a big enough primary surplus to satisfy Germany, and it is probably harmful to try. Autarky is better.
Bio/Vote History
         
Hart Oliver Hart Harvard Uncertain 5
For Greece: default is a plus,exclusion from the EU banking system is a minus- it could lead to bank runs and political chaos. Net unclear.
Bio/Vote History
         
Holmström Bengt Holmström MIT Uncertain 7
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Agree 6
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley No Opinion
Bio/Vote History
         
Judd Kenneth Judd Stanford Disagree 4
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Agree 3
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Agree 2
They will never repay all that is promised anyway & at some point the pain of avoiding default is too much. Exit will be awful in the SR.
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 3
Greek government debt held by non-Greeks (mostly the EU) is more than Greece's annual GDP.
Bio/Vote History
         
Levin Jonathan Levin Stanford Uncertain 1
Bio/Vote History
         
Maskin Eric Maskin Harvard Uncertain 5
It all depends on how financial markets react---and this is hard to predict
Bio/Vote History
         
Nordhaus William Nordhaus Yale Uncertain 8
Too much uncertainty about response, whether leaves Eurozone, and impacts to have clear reading.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 3
Bio/Vote History
         
Samuelson Larry Samuelson Yale Disagree 3
Greek economic institutions are notoriously ineffective; the troika program may provide the commitment needed to build working institutions.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Uncertain 7
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Uncertain 5
So much would seem to depend on the difficult-to-predict reactions of various strategic players with diverse interests and agendas.
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Did Not Answer
Bio/Vote History
         
Shimer Robert Shimer Chicago Uncertain 10
If Greece continues to service its debt, outcomes are reasonably forecastable. If it defaults, many different outcomes can happen.
Bio/Vote History
         
Thaler Richard Thaler Chicago No Opinion
Bio/Vote History
         
Udry Christopher Udry Yale Uncertain 1
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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