US

European Debt

Question A:

Even if all the official-sector funding that Greece received from 2010 through August 2012 is written off, propping up Greece to buy time for the rest of Europe to prepare for Greek default has been better for citizens of the Eurozone outside of Greece than a policy that would have cut off funding sooner.

Responses weighted by each expert's confidence

Question B:

A substantial sovereign-debt default by some combination of Greece, Ireland, Italy, Portugal and Spain is a necessary condition for the euro area as a whole to grow at its pre-crisis trend rate over the next three years.

Responses weighted by each expert's confidence

Question C:

Unless there is a substantial default by some combination of Greece, Ireland, Italy, Portugal and Spain on their sovereign debt and commercial bank debt, plus credible reforms to prevent excessive borrowing in the future, the euro area is headed for a costly financial meltdown and a prolonged recession.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Disagree
6
Bio/Vote History
Alesina
Alberto Alesina
Harvard
Disagree
6
Bio/Vote History
Altonji
Joseph Altonji
Yale Did Not Answer Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Uncertain
3
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
No Opinion
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Uncertain
1
Bio/Vote History
Chetty
Raj Chetty
Harvard
No Opinion
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Uncertain
2
Bio/Vote History
Currie
Janet Currie
Princeton
Uncertain
2
Bio/Vote History
Cutler
David Cutler
Harvard Did Not Answer Bio/Vote History
Deaton
Angus Deaton
Princeton
Agree
7
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Agree
7
Bio/Vote History
An immediate default would have left some Euro zone banks unprepared, and possibly have generated runs. That risk is now reduced.
Edlin
Aaron Edlin
Berkeley
Uncertain
5
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
1
Bio/Vote History
Earlier restructuring of Greece's private and official debt would have been better, but IGM's "cutting off funding" language is ambiguous.
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Agree
7
Bio/Vote History
Goldin
Claudia Goldin
Harvard
No Opinion
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Uncertain
6
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago
No Opinion
Bio/Vote History
Hall
Robert Hall
Stanford Did Not Answer Bio/Vote History
Holmström
Bengt Holmström
MIT
Uncertain
5
Bio/Vote History
Buying time was sensible at least initially. In retrospect it looks like a bad call.
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Judd
Kenneth Judd
Stanford
Uncertain
1
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Disagree
5
Bio/Vote History
Better to have backstopped all the banks and let Greece default in early 2010 -- contagion was manageable then if the banks were supported
Klenow
Pete Klenow
Stanford
Uncertain
1
Bio/Vote History
The IMF seems to think so, but it's not clear to me.
-see background information here
Lazear
Edward Lazear
Stanford
Disagree
6
Bio/Vote History
Danger of contagion has been overstated.
Levin
Jonathan Levin
Stanford Did Not Answer Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
7
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Agree
8
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Uncertain
9
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Uncertain
3
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University Did Not Answer Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Uncertain
5
Bio/Vote History
Shin
Hyun Song Shin
Princeton
Agree
8
Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
No Opinion
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Udry
Christopher Udry
Northwestern
No Opinion
Bio/Vote History
Zingales
Luigi Zingales
Chicago Booth
Disagree
3
Bio/Vote History
I do not think it has been better for Greece either

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Strongly Agree
7
Bio/Vote History
Alesina
Alberto Alesina
Harvard
Strongly Disagree
8
Bio/Vote History
Altonji
Joseph Altonji
Yale Did Not Answer Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Uncertain
3
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
No Opinion
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Uncertain
1
Bio/Vote History
Chetty
Raj Chetty
Harvard
No Opinion
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Uncertain
1
Bio/Vote History
Currie
Janet Currie
Princeton
Uncertain
1
Bio/Vote History
Cutler
David Cutler
Harvard Did Not Answer Bio/Vote History
Deaton
Angus Deaton
Princeton
Agree
4
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Disagree
7
Bio/Vote History
More restructuring might help a lot if managed carefully. But I don't see that this this a necessary condition for growth.
Edlin
Aaron Edlin
Berkeley
Uncertain
3
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
1
Bio/Vote History
Without getting into "necessary but not sufficient" quibbles the EZ is not going to grow at its pre-crisis rate in the next 3 years, period.
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale
Disagree
6
Bio/Vote History
There are many ways to transfer wealth from the North to the South; default is not the only option.
Goldin
Claudia Goldin
Harvard
No Opinion
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Disagree
5
Bio/Vote History
even that won't work
Greenstone
Michael Greenstone
University of Chicago
No Opinion
Bio/Vote History
Hall
Robert Hall
Stanford Did Not Answer Bio/Vote History
Holmström
Bengt Holmström
MIT
Agree
6
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Judd
Kenneth Judd
Stanford
Disagree
3
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
3
Bio/Vote History
ECB could inflate things away (and maybe the OMT is the first step) which is another form of default.
Klenow
Pete Klenow
Stanford
Disagree
1
Bio/Vote History
Necessary condition is just too strong. There's a lot of uncertainty in any forecast, including upside as well as downside.
-see background information here
Lazear
Edward Lazear
Stanford
Uncertain
5
Bio/Vote History
Levin
Jonathan Levin
Stanford Did Not Answer Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
6
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Disagree
5
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Uncertain
9
Bio/Vote History
Greece has already defaulted, and its government debt still looks unsustainable.
Saez
Emmanuel Saez
Berkeley
Agree
3
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University Did Not Answer Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Agree
3
Bio/Vote History
Shin
Hyun Song Shin
Princeton
Agree
8
Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
No Opinion
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Udry
Christopher Udry
Northwestern
Uncertain
1
Bio/Vote History
Zingales
Luigi Zingales
Chicago Booth
Disagree
5
Bio/Vote History

Question C Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Strongly Agree
7
Bio/Vote History
Alesina
Alberto Alesina
Harvard
Strongly Disagree
9
Bio/Vote History
Altonji
Joseph Altonji
Yale Did Not Answer Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Uncertain
3
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago
No Opinion
Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Uncertain
1
Bio/Vote History
Chetty
Raj Chetty
Harvard
No Opinion
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Agree
2
Bio/Vote History
Currie
Janet Currie
Princeton
Uncertain
1
Bio/Vote History
Cutler
David Cutler
Harvard Did Not Answer Bio/Vote History
Deaton
Angus Deaton
Princeton
Agree
4
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Disagree
7
Bio/Vote History
The question leaves no other options for avoiding meltdown. There are other options, including muddling through with ECB support.
Edlin
Aaron Edlin
Berkeley
Uncertain
2
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
1
Bio/Vote History
More debt restructuring is coming. But I would not unconditionally forecast a "costly financia meltdown" in its absence. It depends on Mario
Fair
Ray Fair
Yale
Uncertain
5
Bio/Vote History
This question and the other 2 are too broad. Many other things matter and these are not held constant in the questions.
Goldberg
Pinelopi Goldberg
Yale
Disagree
7
Bio/Vote History
Structural reforms are essential. But again, default is not the only way to reduce the debt burden of Greece, etc...
Goldin
Claudia Goldin
Harvard
No Opinion
Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Disagree
6
Bio/Vote History
misaligned exchange rates mean slow growth. slow growth means no solving the problem, regardless
Greenstone
Michael Greenstone
University of Chicago
No Opinion
Bio/Vote History
Hall
Robert Hall
Stanford Did Not Answer Bio/Vote History
Holmström
Bengt Holmström
MIT
Agree
4
Bio/Vote History
The timing and character of the default matters a lot for the consequences. EZ needs to be better prepared for it.
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Judd
Kenneth Judd
Stanford
Disagree
3
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
3
Bio/Vote History
Again inflating is the alternative -- a clean restructuring is probably better, but inflation may be the path of least resistance.
Klenow
Pete Klenow
Stanford
Disagree
1
Bio/Vote History
I think it's still possible for a virtuous cycle without more defaults.
Lazear
Edward Lazear
Stanford
Uncertain
5
Bio/Vote History
Too toug to predict business cycle activity let alone the effect of a particular factor on it in this case.
Levin
Jonathan Levin
Stanford Did Not Answer Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
6
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Uncertain
5
Bio/Vote History
Obstfeld
Maurice Obstfeld
Berkeley
Uncertain
9
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Agree
2
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University Did Not Answer Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Agree
3
Bio/Vote History
Shin
Hyun Song Shin
Princeton
Strongly Agree
9
Bio/Vote History
Stokey
Nancy Stokey
University of Chicago
No Opinion
Bio/Vote History
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Udry
Christopher Udry
Northwestern
Uncertain
1
Bio/Vote History
Zingales
Luigi Zingales
Chicago Booth
Agree
3
Bio/Vote History