European Economic Experts Panel

 

 

China’s worldwide investments have expanded dramatically over the past decade, particular in infrastructure projects. In the European Union and elsewhere, this has raised some concerns about security and other geopolitical and economic matters. So we invited our European panel of economic experts to express their views on whether Europe’s governments should consider favoring local firms for public infrastructure projects over potentially lower-cost bidders from elsewhere in the world.

 

This week’s IGM European Economic Experts Panel statements:

A) Breaking the “doom loop” — a negative spiral that can result when banks hold sovereign bonds and governments bail out banks — would increase the stability of European economies in the event of another financial crisis.

B) Regulators should try to break the doom loop by assigning positive risk weights — in calculating banks’ capital requirements — to banks’ holdings of domestic and other Eurozone sovereign bonds.

C) Breaking the doom loop would impose substantial costs on powerful political constituencies. 

When more affluent people move into an urban neighborhood, the influx can raise house prices and the value of local amenities, leading to the displacement of long-time lower-income residents – a process sometimes known as gentrification. We invited our European panel of economic experts to express their views on whether governments in Europe should be doing more to counter this phenomenon via a range of housing market policies.

 

This week’s IGM European Economic Experts Panel statements:

A common European deposit insurance scheme, once fully implemented, would increase the stability of European economies in the event of another financial crisis.

A common European deposit insurance scheme, once fully implemented, would increase the likelihood of another financial crisis in Europe. 

This week’s IGM European Economic Experts Panel statements:

A) Overall, public spending on the arts in Europe creates benefits that exceed the deadweight loss caused by taxation to fund it.

B) Additional public spending on the arts in Europe would create incremental benefits that exceed the deadweight loss caused by taxation to fund it. 

This week's IGM European Economic Experts Panel Statements:

A) The average European is better off if Europe’s competition authorities let firms merge into European champions in their sectors, even it weakens competition.

B) If China and other countries use policies that create giant international firms, then the average European is better off if Europe's competition authorities let firms merge into European champions in their sectors, even it weakens competition. 

This week's IGM European Economic Experts Panel statements:

A) Letting publicly traded European firms report earnings annually rather than quarterly would lead their executives to place more weight on long-term issues in their investments and other decisions.

B) A switch from quarterly to annual earnings reports would, on net, benefit shareholders of European firms. 

This week's IGM European Economic Experts Panel Statement(s):

A) To the extent that public corporations pursue social and environmental initiatives, they tend to achieve higher risk-adjusted (private) returns than otherwise similar corporations that pursue such initiatives less.

B) To the extent that Norway’s global government pension fund makes investments for social and environmental objectives — apart from investments that would bring the highest expected risk-adjusted returns — it improves the welfare of Norwegians.