Clark Center Forum

 

 

With the US federal government having reached the current debt ceiling set by Congress and amid political tensions about raising the limit, we invited our panels of experts in economics and finance to express their views on the potential effects of default, as well as the ceiling’s impact on the long-run size of the debt. Over the weekend before the recent meeting between President Biden and Speaker of the House Kevin McCarthy, we asked the US economics panel whether they agreed or disagreed with the following statements, and, if so, how strongly and with what degree of confidence:

 

With the US federal government having reached the current debt ceiling set by Congress and amid political tensions about raising the limit, we invited our panels of experts in economics and finance to express their views on the potential effects of default, as well as the ceiling’s impact on the long-run size of the debt. Over the weekend before the recent meeting between President Biden and Speaker of the House Kevin McCarthy, we asked the US economics panel whether they agreed or disagreed with the following statements, and, if so, how strongly and with what degree of confidence:

 

This European survey examines (a) Loosening regulations on state aid to allow targeted incentives for companies in certain sectors will substantially improve the EU’s relative attractiveness for corporate investment; (b) Loosening regulations on state aid will give a substantial advantage to the economies of EU members with stronger public finances; (c) Even if looser regulations on state aid are temporary, they risk permanent damage to the EU’s longstanding competition policy regime 

This Finance survey examines (a) The SEC’s proposed new rule for stock orders from individual investors is likely to be effective in giving those investors better prices on their trades on average; (b) The new rule would improve the overall operation of the stock market

  

This US survey examines (a) Prohibiting firms from imposing employment contract provisions that prevent workers from moving to a competitor or starting a competing business would lead to a substantial increase in wages in the affected industries; (b) A ban on non-compete clauses would lead to a measurable increase in innovation; (c) A ban on non-compete clauses would lead to a measurable reduction in firms’ investment in staff training

  

This Finance survey examines (a) Although the reported volatility of asset values in private markets (private equity, buyouts, and venture capital) is lower than that of comparable assets in public markets, their true volatility is broadly similar or greater; (b) Since the global financial crisis, the realized returns on private equities have measurably exceeded the returns on public equities 

This US survey examines (a) The market power of event ticket-selling intermediaries leads to consumers who ultimately attend the events paying substantially more and producers receiving substantially less than they would if the intermediary sector were more competitive; (b) The present system of initial ticket selling and reselling through secondary ticket intermediaries often leads to large transfers between different groups of ticket buyers that could be partially captured by artists through higher initial ticket prices; (c) Artists set prices at less than market-clearing levels in an effort to provide access for fans with modest incomes 

This European survey examines (a) Without government intervention, take-up of electric vehicles will be substantially less than is desirable to reduce carbon emissions; (b) To encourage greater take-up of electric vehicles, public expenditure on infrastructure to support them (such as charging stations) is likely to be more cost-effective than providing equivalent amounts as tax credits/purchase rebates for buyers