Wednesday, December 7th, 2016 8:55 am

Trade Within Europe

Question A: Freer movement of goods and services across borders within Europe has made the average western European citizen better off since the 1980s.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question B: Freer movement of goods and services across borders within Europe has made many low-skilled western European citizens worse off since the 1980s.

Responses
 

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Responses weighted by each expert's confidence

Source: European IGM Economic Experts Panel
www.igmchicago.org/european-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Strongly Agree 7
Free trade increases the efficiency of the economy. Although there significant distributional issues, the average person is better off.
Bio/Vote History
         
Antras Pol Antras Harvard Strongly Agree 8
It would be hard to argue it has been worse for the average western citizen
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Strongly Agree 10
Author of leading textbook on Econ of European integration
-see background information here
Bio/Vote History
         
Besley Timothy J. Besley LSE Did Not Answer
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Strongly Agree 8
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Agree 10
Bio/Vote History
         
Blundell Richard William Blundell University College London Strongly Agree 9
Europe, including the UK, is a highly integrated economic region. Across a whole set of services, manufacturing and agricultural products.
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Strongly Agree 8
Although there is no counter-factual, many studies suggest that European integration has increased average GDP per capita.
Bio/Vote History
         
Carletti Elena Carletti Bocconi Agree 5
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Strongly Agree 2
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Agree 8
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Strongly Agree 10
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Agree 8
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Strongly Agree 8
In spite of some costs due to the common agricultural policy, the benefits of specialization have allowed a more efficient allocation
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Strongly Agree 9
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Agree 8
Access to a larger variety of goods and services, at lower prices. A higher standard of living overall.
Bio/Vote History
         
Garicano Luis Garicano LSE Strongly Agree 9
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Strongly Agree 10
the questions asks about movements WITHIN Europe: here there is no doubt
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Strongly Agree 9
A body of empirical evidence and theory suggests gains from European integration.
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Strongly Agree 7
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Strongly Agree 1
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Did Not Answer
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Strongly Agree 9
But not uniform increases: stronger in Eastern Europe.
Bio/Vote History
         
Kleven Henrik Kleven Princeton Strongly Agree 9
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Agree 7
Citizens, not workers or consumers are evaluated. Gains from trade have probably increased in terms of averaging across Europeans.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Strongly Agree 8
I am not a trade economist by specialization, which explains why I selected somewhat limited confidence.
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Strongly Agree 8
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Agree 4
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Strongly Agree 8
Especially in the long run.
Bio/Vote History
         
Meghir Costas Meghir Yale Strongly Agree 10
Bio/Vote History
         
Neary Peter Neary Oxford Strongly Agree 8
Greater integration has led to classical gains from trade through specialization, as well as new gains from exploiting supply chains
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford No Opinion
I'd have chosen "meaningless" if I could have, since "average citizen" is a dangerous fiction. Intra-EU trade has clearly increased GDP
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Strongly Agree 7
This statements is not only consistent with what economic theory predicts, but also with substantial evidence from several studies.
-see background information here
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Agree 8
Bio/Vote History
         
Persson Torsten Persson Stockholm University Strongly Agree 8
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Strongly Agree 10
Trade allows more specialization and this increases efficiency so there is more variety of goods available at lower cost
Bio/Vote History
         
Portes Richard Portes London Business School Strongly Agree 10
For consumers, there has been an astonishing increase in variety for all goods and a significant reduction in the real prices of durables.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Strongly Agree 9
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Agree 5
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Strongly Agree 8
Bio/Vote History
         
Rey Hélène Rey London Business School Agree 7
Standard economic theory arguments in favour of free trade seem to apply fairly well within Europe.
Bio/Vote History
         
Schoar Antoinette Schoar MIT Strongly Agree 8
Bio/Vote History
         
Van Reenen John Van Reenen MIT Strongly Agree 8
Numerous studies, especially of the impact of single market
Bio/Vote History
         
Vickers John Vickers Oxford Agree 8
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Agree 3
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Strongly Agree 1
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Agree 5
I agree but evidence on productivity suggests that the gains from this kind of liberalisation have been smaller than anticipated.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Strongly Agree 9
Much evidence on more competition, economies of scale and of scope.
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Strongly Agree 10
Competition, lower prices, more innovation
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Aghion Philippe Aghion Harvard Did Not Answer
Bio/Vote History
         
Allen Franklin Allen Imperial College London Agree 5
Some workers are made worse off but as consumers they are probably better off.
Bio/Vote History
         
Antras Pol Antras Harvard Uncertain 6
The sentiment of many low-skilled workers is that they might have been made worse off. This is probably true for some but not clear how many
Bio/Vote History
         
Baldwin Richard Baldwin The Graduate Institute Geneva Strongly Disagree 10 Bio/Vote History
         
Besley Timothy J. Besley LSE Did Not Answer
Bio/Vote History
         
Blanchard Olivier Blanchard Peterson Institute Agree 8
Bio/Vote History
         
Bloom Nicholas Bloom Stanford Strongly Disagree 7
Bio/Vote History
         
Blundell Richard William Blundell University College London Uncertain 6
A set of changes including rules on union bargaining and skill-biased tech change that have put downward pressure on low skilled male wages.
Bio/Vote History
         
Bénassy-Quéré Agnès Bénassy-Quéré Paris School of Economics Disagree 8
In most Western EU countries, inequalities of disposable income have not increased at least up to the crisis.
Bio/Vote History
         
Carletti Elena Carletti Bocconi No Opinion
Bio/Vote History
         
Danthine Jean-Pierre Danthine Paris School of Economics Agree 2
but appropriate training and labour market policies have the overall impact of free trade positive for almost everyone in some countries
Bio/Vote History
         
De Grauwe Paul De Grauwe LSE Agree 7
Bio/Vote History
         
Eeckhout Jan Eeckhout University College London Uncertain 7
Bio/Vote History
         
Fehr Ernst Fehr Universität Zurich Uncertain 4
Bio/Vote History
         
Freixas Xavier Freixas Universitat Pompeu Fabra Strongly Agree 8
European competition has led to a reduction in low skilled jobs that combined with a larger supply coming from low income countries
Bio/Vote History
         
Fuchs-Schündeln Nicola Fuchs-Schündeln Goethe-Universität Frankfurt Agree 5
Bio/Vote History
         
Galí Jordi Galí Universitat Pompeu Fabra Agree 4
Possibly, and at least in the short run, due to the reallocation of manufacturing activities in low wage new EU members.
Bio/Vote History
         
Garicano Luis Garicano LSE Disagree 9
Bio/Vote History
         
Giavazzi Francesco Giavazzi Bocconi Strongly Disagree 10
again the question is about trade within europe, thus no doubts
Bio/Vote History
         
Griffith Rachel Griffith University of Manchester Disagree 5
Some low-skilled workers have undoubtedly been made worse off, but we do not know if many have, any my sense is that it is not many.
Bio/Vote History
         
Guerrieri Veronica Guerrieri Chicago Booth Uncertain 7
Bio/Vote History
         
Guiso Luigi Guiso Einaudi Institute for Economics and Finance Uncertain 1
I think competition to Asia may have had this effect but not openness within Europe, except perhaps the enlargement to the eastern European
Bio/Vote History
         
Hellwig Martin Hellwig Max Planck Institute for Research on Collective Goods Did Not Answer
Bio/Vote History
         
Honohan Patrick Honohan Trinity College Dublin Disagree 7
Some yes; many no. But this is measuring economic wellbeing. Loss of identity, community, social certainties would be an offset.
Bio/Vote History
         
Kleven Henrik Kleven Princeton Uncertain 8
Bio/Vote History
         
Krahnen Jan Pieter Krahnen Goethe University Frankfurt Disagree 7
Gains from trade have increased the extent to which redistribution via the social security system can be effective.
Bio/Vote History
         
Krusell Per Krusell Stockholm University Disagree 8
I think mist low-wage competition is from outside of Europe. Of course some always lose from trade. But many low-skilled workers gain too.
Bio/Vote History
         
Kőszegi Botond Kőszegi Central European University Uncertain 3
Bio/Vote History
         
La Ferrara Eliana La Ferrara Bocconi Disagree 2
Bio/Vote History
         
Leuz Christian Leuz Chicago Booth Uncertain 7
Benefit from lower prices but neg. employment effects; net effect depends on horizon & transfers. Bigger effect for them is technology
-see background information here
Bio/Vote History
         
Meghir Costas Meghir Yale Strongly Disagree 8
Bio/Vote History
         
Neary Peter Neary Oxford Disagree 6
It is not true that many low-skilled workers have lost out, especially considering improved quality and lower prices; but some have lost
Bio/Vote History
         
O'Rourke Kevin O'Rourke Oxford Disagree 6
Intra-EU trade has hurt some via outsourcing to Eastern Europe but not huge numbers I guess -- extra-EU trade more the problem here.
Bio/Vote History
         
Pagano Marco Pagano Università di Napoli Federico II Disagree 4
Intra-EU trade expanded employment opportunities. Some displacement of low-skill workers occurred, but mostly due to non-EU imports.
Bio/Vote History
         
Pastor Lubos Pastor Chicago Booth Agree 5
Bio/Vote History
         
Persson Torsten Persson Stockholm University Disagree 6
Trade within western Europe is mostly intra-industry trade
Bio/Vote History
         
Pissarides Christopher Pissarides LSE Disagree 5
it has made some western workers worse off but not many because of competition from lower-cost eastern nations
Bio/Vote History
         
Portes Richard Portes London Business School Strongly Disagree 10
Free movement of goods and (not all) services has benefited low-skilled as well as high-skilled; migration may have harmed some low-skilled.
Bio/Vote History
         
Prendergast Canice Prendergast Chicago Booth Agree 6
Bio/Vote History
         
Reichlin Lucrezia Reichlin London Business School Disagree 8
Bio/Vote History
         
Repullo Rafael Repullo CEMFI Disagree 6
Bio/Vote History
         
Rey Hélène Rey London Business School Disagree 5
Some low-skilled workers worse off because of job outsourcing. Compensations to losers not adequate. But there are also gains to consumers
Bio/Vote History
         
Schoar Antoinette Schoar MIT Disagree 7
Bio/Vote History
         
Van Reenen John Van Reenen MIT Disagree 8
Overall income growth is greater; no obvious differential impact by skill (all relatively wealthy countries). Our Brexit analysis summarises
-see background information here
-see background information here
Bio/Vote History
         
Vickers John Vickers Oxford Agree 6
Bio/Vote History
         
Voth Hans-Joachim Voth University of Zurich Disagree 4
hugely heterogenous - strongly positive for Germany etc., probably a small minus in places with a weaker manufacturing base
Bio/Vote History
         
Weder di Mauro Beatrice Weder di Mauro Gutenberg University Mainz and INSEAD Disagree 7
Bio/Vote History
         
Whelan Karl Whelan University College Dublin Disagree 9
Eastern European immigration has had limited effects on wages in Western Europe. Trade liberalisation with non-EU areas more important.
Bio/Vote History
         
Wyplosz Charles Wyplosz The Graduate Institute Geneva Agree 7
Usual RIcardian redistribution as many firms have closed down. Many people recovered but some did not.
Bio/Vote History
         
Zilibotti Fabrizio Zilibotti Universität Zurich Disagree 4
At best true for very specific sectors of labor market (e.g., construction).
Bio/Vote History
         

About the European IGM Economic Experts Panel

This panel explores the views of European economists on vital public policy issues. It does this by polling them on important policy questions, by including a way for them to explain their answers briefly if they wish, and by disseminating these responses directly to the public in a simple format.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the main areas of economics, to be geographically diverse, and to include older and younger scholars. As with the IGM’s US panel, the experts are all outstanding researchers in their fields. The panel includes recipients of top national and international prizes in economics, fellows of the Econometric society and the European Economic Association, members of distinguished national and international policymaking bodies in Europe, recipients of significant grants for economic research, highly accomplished affiliates and program directors of the Centre for Economic Policy Research and the National Bureau of Economic Research, and past and current editors of leading academic journals in the profession. This approach not only provides 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 in Europe and beyond.

Questions for the European IGM Economic Experts Panel are emailed individually to all members of the panel. They are phrased as statements with which one can agree or disagree. The experts are also asked how confident they are in their knowledge of the issue associated with the question (10 being highest). Each panelist responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering. They may also include brief comments with their responses, or provide links to relevant sources.

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 knows a lot about 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 knowledge that he or she does not feel well placed to judge. In this case, our panelists vote "no opinion".

Panelists suggest many of the questions themselves. Members of the public are also welcome to suggest questions (see link below). Although IGM faculty members are responsible for deciding the final version of each question, we 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. This process helps us to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and will be analyzed for an article to appear in a peer-reviewed journal.

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