Question A:
A substantial increase in defense spending largely funded by government borrowing would deliver a measurable boost to economic growth over the next five years.
Responses
Responses weighted by each expert's confidence
Question B:
Increasing public investment in defense R&D would generate substantial technological spillovers and productivity gains in addition to the boost to national military capabilities.
Responses
Responses weighted by each expert's confidence
Question C:
The market power of defense suppliers substantially raises procurement costs without adding to military capabilities.
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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Yes, because of increased spending. But it's much more uncertain whether this would have a positive impact on consumption or welfare.
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 Mark Aguiar |
Princeton | Bio/Vote History | ||
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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I am uncertain because debt/gdp ratio in the US is heading toward territory in which it will have a significant negative impact on the economy.
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Abhijit Banerjee |
MIT | Bio/Vote History | ||
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 Dirk Bergemann |
Yale | 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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 Judith Chevalier |
Yale | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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It seems possible that this raises output in the near term because defense output is output and the spending is funded by debt and taxes that has an uncertain impact on other output in the near term. Probably sometime after five years the net impact on output is negative. .
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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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 Edward Glaeser |
Harvard | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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 Oliver Hart |
Harvard | 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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 Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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This seemed to work in the 1980's. One worry is that the total level of debt may make the bond market nervous about future inflation.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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See Valerie Ramey's work
-see background information here |
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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 William Nordhaus |
Yale | Did Not Answer | Bio/Vote History | |
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 Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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 Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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Spending the same amount on productive investments, such as in infrastructure or research, would better promote growth.
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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 Fiona Scott Morton |
Yale | Bio/Vote History | ||
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 Carl Shapiro |
Berkeley | Bio/Vote History | ||
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Higher government spending raises GDP, but the multiplier is almost surely less than 1. There would be substantial crowding out of consumption, investment, and net exports.
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 Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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 James Stock |
Harvard | Bio/Vote History | ||
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The economy is at full employment so the unfunded increase in spending would be inflationary and displace other activity
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 Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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It's not clear that demand constraints are limiting growth now.
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 Ivan Werning |
MIT | Did Not Answer | Bio/Vote History | |
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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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Caveat: the composition matters. In the past, military R&D directed at sectors that provided inputs or technologies into civilian use, such as communication, health, aviation and nano, have generated important spillovers.
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Mark Aguiar |
Princeton | 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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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Dirk Bergemann |
Yale | 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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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Some of this has happened in the past (e.g. DARPA). Would it happen again? I've little idea.
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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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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Oliver Hart |
Harvard | 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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Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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I agree - but, those benefits would accrue over a much larger time line than 5 years.
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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This has been true for past investment in defense R&D.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Did Not Answer | Bio/Vote History | |
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Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Defense R&D would generate spillovers, but would not be as effective in increasing productivity as directly targeted R&D as well as basic research.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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It was true in the past (DARPA) but in this administration the decisions will be made by political appointees instead of science and engineering experts
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Depends on the technologies on which spending focuses.
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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But even more effective for driving technology would be to return to funding basic science and lab-state R&D which has been the foundation of U.S. tech growth
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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It's not an efficient way of generating technology change. But there are often significant spillovers from military innovation. Obviously, there are better ways to generate stronger spillovers.
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Ivan Werning |
MIT | Did Not Answer | Bio/Vote History | |
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Mark Aguiar |
Princeton | 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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This is not just a cost problem; it's a speed problem. Defense innovation is accelerating -- see Ukraine -- and slow, stodgy US contractors are a strategic problem for the US.
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Abhijit Banerjee |
MIT | Bio/Vote History | ||
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Dirk Bergemann |
Yale | 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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The depends on the amount of extra defense spending and the procurement procedures.
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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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I don't know enough about this to reach the "substantially" threshold.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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It depends though on this: compared to what? Higher prices compared to them having but choosing benevolently not to exercise market power. But prices may not be higher than any feasible alternative.
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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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Edward Glaeser |
Harvard | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Oliver Hart |
Harvard | 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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Erik Hurst |
Chicago Booth | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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This is a worry. Encouraging competition is desirable. Collaboration with our allies could create competition.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Government has a lot of market power too. So, a function of how government manages the process.
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Did Not Answer | Bio/Vote History | |
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Maurice Obstfeld |
Peterson Institute for International Economics | Bio/Vote History | ||
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Parag Pathak |
MIT | Did Not Answer | Bio/Vote History | |
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Larry Samuelson |
Yale | Bio/Vote History | ||
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The procurement process as a whole is ineffective, but much of the problem arises from Congress' pork barrel approach to military procurement.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Although new firms that focus on new technologies seem to be increasing competition.
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Fiona Scott Morton |
Yale | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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This question is incoherent. Market power doesn't exist in a vacuum. It exists in large part because advanced military capabilities are difficult to produce.
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Stefanie Stantcheva |
Harvard | Did Not Answer | Bio/Vote History | |
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James Stock |
Harvard | Bio/Vote History | ||
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Chad Syverson |
Chicago Booth | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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Ivan Werning |
MIT | Did Not Answer | Bio/Vote History | |
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