Question A:
The release of strategic oil reserves announced by the International Energy Agency will deliver substantially lower prices for vehicle fuels over the next six months than would otherwise have been the case.
Responses
Responses weighted by each expert's confidence
Question B:
Assuming that world commodity prices over the next six months continue to be elevated and volatile, temporarily subsidising or capping natural gas prices would be an effective way to protect European households and businesses from high energy bills.
Responses
Responses weighted by each expert's confidence
Question C:
The vulnerability of the European economy to high and volatile fossil fuel prices indicates the need for stronger incentives to promote decarbonisation rather than rowing back on policy support for the energy transition.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Much will depend on how the war unfolds. If it finishes soon, the release may lower prices relative to where they otherwise would have been. However, if it lasts for some time the effect may be the opposite of intended since it means there are less emergeny reserves in place.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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 Emmanuelle Auriol |
Toulouse School of Economics | Bio/Vote History | ||
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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"substantially" is too strong. It can only fill a limited proportion (20-30%) of the likely gap.
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 Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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 Maristella Botticini |
Bocconi | Bio/Vote History | ||
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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 Julia Cagé |
Sciences Po | Bio/Vote History | ||
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 Elena Carletti |
Bocconi | Bio/Vote History | ||
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Antonio Fatás |
INSEAD | Bio/Vote History | ||
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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 Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Hard to predict
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 Sergei Guriev |
London Business School | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Oil and gas prices determined largely in asset markets, where expectations regarding duration of the conflict are important; release of a few million barrels a day unlikely to reliably or substantially affect this.
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 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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In times like ours, a depletion of strategic oil reserves will not happen to a significant extent because it (i.e.a depletion) would open up a potential strategic weakness of the US (and the West) with high political downside. No government will allow this to happen.
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 Botond Kőszegi |
Central European University | Bio/Vote History | ||
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 Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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 Kalina Manova |
University College London | Bio/Vote History | ||
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 Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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 Costas Meghir |
Yale | Bio/Vote History | ||
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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 Elias Papaioannou |
London Business School | Bio/Vote History | ||
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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 Richard Portes |
London Business School | Bio/Vote History | ||
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Carol Propper |
Imperial College London | Bio/Vote History | ||
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 Imran Rasul |
University College London | Bio/Vote History | ||
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 Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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 Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Antoinette Schoar |
MIT | Did Not Answer | Bio/Vote History | |
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 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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The strategic release is about 1% of annual world production of oil. It will dent the prices but it will not lower prices "substantially".
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 Per Strömberg |
Stockholm School of Economics | Bio/Vote History | ||
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 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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While the release is large, the quantities are still small and expectations about the war in Iran too important for prices.
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 Silvana Tenreyro |
LSE | Bio/Vote History | ||
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The announced release covers only a small part of the deficit caused by the conflict. More is needed to see a substantial impact on prices.
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 Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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It might affect the time profile of prices but not so much the general level.
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Targeted help for low income families and firms in danger of bankruptcy would be a better way to go. Controlling the price for every agent uses scarce government funds unnecessarily.
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Pol Antras |
Harvard | Bio/Vote History | ||
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Emmanuelle Auriol |
Toulouse School of Economics | Bio/Vote History | ||
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The level of public debt in France is too high to do that
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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I was in favor of it last time. I think this was the right decision, but it turned out to be costly. More narrow help, for those people whose professional activity depends in a major way on gas prices. Note easy to narrow and do, but we should try.
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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If the price stays elevated, a temporary support does not help much.
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Julia Cagé |
Sciences Po | Bio/Vote History | ||
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Antonio Fatás |
INSEAD | Bio/Vote History | ||
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Sergei Guriev |
London Business School | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Such a device can be good to prevent a short-term supply squeeze from unanchoring inflation expectations, but repeated use will discourage decarbonization and is a costly way of protecting the most affected. Eventually the fiscal cost will be paid by someone.
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Subsidizing energy consumption will be costly, leading to (political) opportunity costs in the form of foregone "other" state activities, as well as increased indebtedness.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Energy subsidies would protect Europe's households, essentially moving the burden of price shock to governments' balance sheets. Energy subsidies are more effective than transfers but if many countries adopt subsidies, they become self-defeating as prices rise further. See link.
-see background information here |
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Kalina Manova |
University College London | Bio/Vote History | ||
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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Costas Meghir |
Yale | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Elias Papaioannou |
London Business School | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Antoinette Schoar |
MIT | Did Not Answer | Bio/Vote History | |
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Subsidizing a scarce good (natural gas) is an expensive policy which will have to be paid in terms of higher taxes and lower spending. Not cost effective
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Per Strömberg |
Stockholm School of Economics | Bio/Vote History | ||
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Subsidizing / capping energy prices increases usage and increases the shortage. More efficient to have subsidies to households affected that are not explicitly tied to energy purchases.
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
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It is an effective way to protect households and firms. It is also very expensive, so governments will need to take that into account. Importantly, this needs to be understood as a temporary measure that would be unwound in X months.
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Beware fiscal cost of such subsidies
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Any measure should be precisely targetted
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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The faster Europe moves away from fossil fuels the less vulnerable we will be. Removing tariffs on Chinese EVs and renewable technologies would be helpful in this regard.
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Pol Antras |
Harvard | Bio/Vote History | ||
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Emmanuelle Auriol |
Toulouse School of Economics | Bio/Vote History | ||
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We need to build nuclear power plants all over EU
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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and what is happening will probably help that transition. Electric cars look better this week.
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Julia Cagé |
Sciences Po | Bio/Vote History | ||
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Not using reserves to lower prices of oil and gas is an incentive to increase investment in alternative energy sources
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Antonio Fatás |
INSEAD | Bio/Vote History | ||
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Sergei Guriev |
London Business School | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Europe's response to volatile and high energy prices will be the increase of alternative sources of energy - from solar and wind to nuclear. This process is already under way.
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Bio/Vote History | ||
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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This highlights the national security and energy independence dimension to decarbonization.
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Kalina Manova |
University College London | Bio/Vote History | ||
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Thierry Mayer |
Sciences-Po | Bio/Vote History | ||
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Costas Meghir |
Yale | Bio/Vote History | ||
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Elias Papaioannou |
London Business School | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Did Not Answer | Bio/Vote History | |
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Antoinette Schoar |
MIT | Did Not Answer | Bio/Vote History | |
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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It's complicated. The shift to sun and wind energy requires balance power when the wind is not blowing. Natural gas is the only viable balance power. So high gas prices will mean higher (average) prices for energy, even with a lot of alternative energy
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Per Strömberg |
Stockholm School of Economics | Bio/Vote History | ||
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The example of solar in China shows how green industrial policy can give a competitive advantage over the long run. Green investment and R&D subsidies in combination with carbon pricing and CBAM is an effective way to reduce dependence on fossile fuels.
-see background information here |
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
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Europe needs to accelerate efforts to decarbonize, which will allow it to diversify risk, reducing exposure to global oil (and gas) prices
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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It depends whether you mean decarbonisation of domestic energy production or consumption. The former can increase vulnerability by increasing reliance on energy imports.
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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