Clark Center Forum

 

 

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. 

Recent nominations to join the board of governors of the Federal Reserve have raised concerns about political threats to the independence of monetary policy-making. The Economist has explained the dangers of weakened central banks, not only in the United States but also elsewhere in the world. And economists and economic journalists have questioned the economic ideas of President Trump’s latest Fed picks, both of whom have now withdrawn their names.

 

The recent scandal of rich and famous people buying places for their children at elite colleges has led to a renewed public conversation about the system of legacy preference in admissions at many top US universities. We invited our US panel to express their views on the likely effects of legacies on potentially high-achieving applicants from less advantaged backgrounds and on wider society.

 

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. 

In January this year, Senator Elizabeth Warren unveiled a proposal to tax the wealth of the richest 0.1% of Americans. The proposed legislation to tax households with a net worth of $50 million or more draws on analysis by one of our US panel of economic experts – Emmanuel Saez at Berkeley – showing that the richest 0.1% has seen its share of American wealth more than triple from 7% to 22% since the late 1970s. Saez and colleagues have also made calculations of the potential impact of Senator Warren’s proposed tax.

 

This week’s IGM Economic Experts Panel statements:

A) Forcing Amazon to divest Whole Foods now would be in the public interest.

B) Acquisitions by large tech platforms where there are risks of anti-competitive effects like those posed by Amazon’s acquisition of Whole Foods should not be permitted.

C) Large tech platforms, such as Amazon Marketplace and Google Search, should be designated as ‘platform utilities' and broken apart from any participant on that platform. 

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.