Conventional economic reasoning suggests that it would be a good policy to enact the recent Senate bill that would let undergraduate students borrow through the government Stafford program at interest rates equivalent to the primary credit rates offered to banks through the Federal Reserve's discount window.
Responses
Responses weighted by each expert's confidence
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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Federal student loands should be tied to a longer term rate such as 10 year t-bill rate plus a premium, not a very short term rate.
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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College remains an excellent investment for most students, and the federal government is the appropriate lender for most borrowers.
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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Education creates externalities, justifying subsidies. But there are problematic institutions who may be abusing the programs.
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 Janet Currie |
Princeton | Bio/Vote History | ||
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Provides modest subsidies to students but still stabilizes cost of the program (since cost of loans to govt exceeds govt cost of borrowing).
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 David Cutler |
Harvard | Bio/Vote History | ||
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Unclear what you mean by "conventional", but the evidence suggests inadequate college attendance because of price.
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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Why are we being asked about "conventional economic opinion" instead of substance? Makes it a test.
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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The discount-window rate represents a subsidy to education. The case for this: (1) credit frictions, and (2) knowledge externalities.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Main q is whether marginal return to college exceeds the cost. If it does, std reasoning says we should encourage more college degrees
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Claudia Goldin |
Harvard | Bio/Vote History | ||
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This has already been done but with a cap on the total rate. Also, the rate is locked in for the loan period. The Q did not state this.
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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better skills for the workforce helps not just the workers themselves but the wider economy, too.
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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What do we assume about externalities? If no externalities, then this int rate is too low bc doesn't reflect riskiness of student loans.
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 Robert Hall |
Stanford | Bio/Vote History | ||
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There are so many things wrong with the student loan program that changing the interest rate is down the list.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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Something needs to be done to return the student loan program to what it was earlier this year.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Discount window loans are secured and only made to solvent banks. Student loans historically have high default rates. Very bad idea!
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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I can see the case for subsidizing college, but not pushing the borrowing rate below the risk free rate plus default risk.
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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Haven't had a chance to get informed on this one.
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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 William Nordhaus |
Yale | Did Not Answer | Bio/Vote History | |
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Conventional reasoning may rationalize a subsidy, but it is not clear what the alternative is or why this formula might be optimal.
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 Hyun Song Shin |
Princeton | Did Not Answer | Bio/Vote History | |
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Guessing what conventional economic reasoning suggests is not in my wheel house. Social returns to student loans is probably high.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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 Luigi Zingales |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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