Question A:
US share prices have risen since Donald Trump’s election victory at least partly because the policies he seems poised to implement are likely to increase US after-tax corporate profits.
Responses
Responses weighted by each expert's confidence
Question B:
US share prices have risen since Donald Trump’s election victory at least partly because the policies he seems poised to implement are likely to increase US real GDP growth.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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They are more likely to increase the corporate profits of listed firms than all firms, and also in the short/medium run rather than long run
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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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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | 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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The after-tax part is crucial.
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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Even if there is no impact on before-tax profits, stock market investors generally believe that corporate tax rates will drop a lot.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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Changes in stock prices are largely unpredictable. No real way to identify the increase in stock prices to Trump.
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 Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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 Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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companies like tax cuts
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 Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Robert Hall |
Stanford | Bio/Vote History | ||
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Two forces in the universe are really hard to predict or understand: Trump and the stock market.
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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People, probably correctly, expect lower corporate taxes and fewer regulations. Go figure.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Pure Animal Spirits would seem to be the best explanation.
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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The rise in prices could be due to a reduction in uncertainty, not to a change in expectations.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Enthusiasm driven by the expectation of regulatory relief and concomitant investment, growth and profits.
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Can't be proven one way or another, this is plausible but no way to know for sure
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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Trump + Republican Congress = lower tax rate on corporate profits.
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 Jonathan Levin |
Stanford | Did Not Answer | Bio/Vote History | |
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 Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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 William Nordhaus |
Yale | Bio/Vote History | ||
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Hard to separate the different causes. The impact of tax policies seems the most important reason, particularly the cut in business taxes.
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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There is too much uncertainty about his policies to know for sure, but they appear to auger well for corporate profits.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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More precisely, most market participants believe Trump's policies are likely to increase corporate profits
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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Hard to imagine what else it could be.
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 Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Explaining any short term movement in stock prices is a fools game, but this explanation is a plausible one.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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Corporate tax cuts and defense / some infrastructure spending may happen with a unified government.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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They are much more likely to be disastrous for the economy and the US political system. The economic policies we know about are shambles.
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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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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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Some policies likely to boost growth, at least temporarily. Others likely to suppress it. Hard to say!
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Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | 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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Uncertain because real winners and losers.
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Yes, investors do seem to perceive this, from commentary. The degree to which it will happen cannot be predicted with as much confidence.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Maybe would have risen also if Clinton had been elected.
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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High income tax cuts aren't stimulative and infrastructure takes years
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Robert Hall |
Stanford | Bio/Vote History | ||
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see above
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Oliver Hart |
Harvard | Bio/Vote History | ||
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I see no reason to think that growth will be higher because of Trump's policies, which are probably bad for the economy overall.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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I do not agree with the premise that his policies are likely to increase growth in the long run.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Again, regulatory relief expected to drive investment and growth.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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also impossible to know and the horizon that matters for stocks is longer term growth and after tax earnings
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Depends on the weight put on a trade war vs. stimulative fiscal policy -- and the Fed's response.
-see background information here |
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Jonathan Levin |
Stanford | Did Not Answer | Bio/Vote History | |
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Bio/Vote History | ||
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Here, the Keynesian impact of tax cuts on output is partly offset by likely higher real interest rates.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Despite bold claims about growth, the new administration has not described an effective policy to increase GDP growth.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Stock returns are poor predictors of future changes in output (see e.g. Stock and Watson 2003 Journal of Economic Literature)
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Share prices depend on profits, not GDP. Tax cuts plus more spending may increase GDP in the short run. but profits are what matter .
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Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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It is hard to know what Trump's policies will be since he contradicts himself repeatedly, but he shows no signs of understanding economics.
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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In the short run, which dominates, fiscal stimulus or barriers to trade? The longer run looks bad for many reasons.
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