Question A:
Assuming it exits its third bailout program this summer without an immediate restructuring or other debt relief, Greece is unlikely to default on its sovereign debt in the coming decade.
Responses
Responses weighted by each expert's confidence
Question B:
Greece would be better off if it had decided to exit the euro between 2011 and 2015.
Responses
Responses weighted by each expert's confidence
Question C:
If Greece had defaulted on (or restructured) its private debt in 2010, while also staying within the euro, that combination would have been better for Greece than either exiting the euro or proceeding as it has actually done.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 Philippe Aghion |
Harvard | Did Not Answer | Bio/Vote History | |
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 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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I would say there is a great deal of uncertainty about this with much depending on how things develop in the Eurozone in the coming years.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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Hard to imagine an outright default could happen. There will be other opportunities to restructure.
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 Timothy J. Besley |
LSE | Did Not Answer | Bio/Vote History | |
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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If they have to pay market rates for new lending, it is very difficult to see how they will be able to repay.
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 Nicholas Bloom |
Stanford | Bio/Vote History | ||
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 Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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It would probably be later, given the maturity of the debt.
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 Elena Carletti |
Bocconi | Bio/Vote History | ||
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Ernst Fehr |
Universität Zurich | Did Not Answer | Bio/Vote History | |
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 Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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 Francesco Giavazzi |
Bocconi | Bio/Vote History | ||
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Official lenders can string this out for at least another decade; but Greece may not be willing to deliver the primary surpluses entailed.
-see background information here |
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 Henrik Kleven |
Princeton | Did Not Answer | Bio/Vote History | |
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Greece is now back on track, has accepted many hardships in order to comply with European requests - why should it change its stance?
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 Per Krusell |
Stockholm University | Bio/Vote History | ||
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 Botond Kőszegi |
Central European University | Bio/Vote History | ||
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 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Very hard to predict. Much depends on continued structural reforms & if there is a major shock to world economy. Not much room for error.
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 Costas Meghir |
Yale | Did Not Answer | Bio/Vote History | |
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 Peter Neary |
Oxford | Bio/Vote History | ||
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 Kevin O'Rourke |
Oxford | Did Not Answer | Bio/Vote History | |
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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In a low-growth, scenario, debt relief will be needed to avoid a default, and default without debt relief could take place within 10 years.
-see background information here |
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 Lubos Pastor |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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 Torsten Persson |
Stockholm University | Did Not Answer | Bio/Vote History | |
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 Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
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Repayment terms are easy if interest rates do not hike. The economy will grow and fiscal budget is in surplus
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 Richard Portes |
London Business School | Bio/Vote History | ||
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Net financing needs are very low for the next decade.
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Hélène Rey |
London Business School | Bio/Vote History | ||
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Net financing needed by Greece is small over that horizon.
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
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 John Van Reenen |
LSE | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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10Y bond yield of 4.2% is well above bunds but does not suggest that default is more likely than not
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 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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 Beatrice Weder di Mauro |
The Graduate Institute, Geneva | Bio/Vote History | ||
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Gross financing needs only increase later, in the short run they ar low due to highly concessional conditions on European loans.
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 Karl Whelan |
University College Dublin | Bio/Vote History | ||
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Uncertain. The debt is unsustainable (see the recent CEPR report) but there will likely be debt relief thus avoiding an outright default.
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Most serious studies find that the Greek debt is unlikely to be sustainable.
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 Fabrizio Zilibotti |
Yale University | Bio/Vote History | ||
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I interpret "default" it as an outright unilateral decision. A different point is whether there there will be haircuts and renegotiations.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Philippe Aghion |
Harvard | Did Not Answer | Bio/Vote History | |
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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It has suffered a punishing depression and has only recently started growing. It would have grown much faster outside the Eurozone.
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Pol Antras |
Harvard | Bio/Vote History | ||
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Transitional costs could have been large.
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Timothy J. Besley |
LSE | Did Not Answer | Bio/Vote History | |
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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They would have needed help from others, but they would have been able to improve competitiveness much faster, and get growth going earlier
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Nicholas Bloom |
Stanford | Bio/Vote History | ||
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Posted an external deficit along the crisis, thanks to emergency assistance and Target inflows. Alone, it would have lost more purch power.
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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under the assumption of a prepared, coordinated exit
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Ernst Fehr |
Universität Zurich | Did Not Answer | Bio/Vote History | |
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Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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Francesco Giavazzi |
Bocconi | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Weak short or medium-term export supply elasticity. Exit unlikely to improve financial, macroeconomic or political stability.
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Henrik Kleven |
Princeton | Did Not Answer | Bio/Vote History | |
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Exiting a currency union is tough. Lots of international exposures will be in default, because of the extreme devaluation.
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Per Krusell |
Stockholm University | Bio/Vote History | ||
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Exit restores competitiveness, but would have led to default on euro liab thereafter would have been little political will to help Greece.
-see background information here |
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Costas Meghir |
Yale | Did Not Answer | Bio/Vote History | |
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Peter Neary |
Oxford | Bio/Vote History | ||
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Kevin O'Rourke |
Oxford | Did Not Answer | Bio/Vote History | |
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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If it had done so, today Greece would have runaway inflation and difficulty in accessing international capital markets.
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Lubos Pastor |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Torsten Persson |
Stockholm University | Did Not Answer | Bio/Vote History | |
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Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
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The transition cost would have been very high and governments would have resorted to inflation-finance, devaluations and no reforms
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Richard Portes |
London Business School | Bio/Vote History | ||
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Financial system would have collapsed completely.
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Bio/Vote History | ||
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There would have been a major crisis with social distress and no institutional reforms.
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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John Van Reenen |
LSE | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Major exit costs v some benefits of devaluation. Euro-denominated debt would still need servicing.
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Beatrice Weder di Mauro |
The Graduate Institute, Geneva | Bio/Vote History | ||
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Karl Whelan |
University College Dublin | Bio/Vote History | ||
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Better to have larger sovereign default in 2011 restoring sustainability and avoiding the excessively tight fiscal policy of 2012 onwards.
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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You don't exit the euro for a few years and then come back. If you exit, you're out, maybe better off in the medium run.
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Fabrizio Zilibotti |
Yale University | Bio/Vote History | ||
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Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Philippe Aghion |
Harvard | Did Not Answer | Bio/Vote History | |
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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It would have removed the debt overhang and could have grown much faster as a result.
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Pol Antras |
Harvard | Bio/Vote History | ||
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Timothy J. Besley |
LSE | Did Not Answer | Bio/Vote History | |
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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I argued that at the time.
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Nicholas Bloom |
Stanford | Bio/Vote History | ||
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Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Staying in the euro under reduced debt is better if the necessary reforms are also implemented
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Ernst Fehr |
Universität Zurich | Did Not Answer | Bio/Vote History | |
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Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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Francesco Giavazzi |
Bocconi | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Henrik Kleven |
Princeton | Did Not Answer | Bio/Vote History | |
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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The default-in-2010 option would have been close to Banking Union rules: Bail-in creditors - which at the time were mostly foreign banks
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Per Krusell |
Stockholm University | Bio/Vote History | ||
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Botond Kőszegi |
Central European University | Bio/Vote History | ||
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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Default w/ liquidity for GR/EU banking system & money for structural reform would have been better than giving money to creditors. See oped.
-see background information here -see background information here |
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Costas Meghir |
Yale | Did Not Answer | Bio/Vote History | |
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Peter Neary |
Oxford | Bio/Vote History | ||
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Kevin O'Rourke |
Oxford | Did Not Answer | Bio/Vote History | |
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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This would have avoided excess fiscal contraction, and kept price & financial stability.
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Lubos Pastor |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Torsten Persson |
Stockholm University | Did Not Answer | Bio/Vote History | |
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Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
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Cypriot deposit haircut had similar effects. In Cyprus unsuspecting depositors lost their assets in Greece's lenders would have lost them
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Richard Portes |
London Business School | Bio/Vote History | ||
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Unfortunately, European officials (including ECB) blocked this path.
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Bio/Vote History | ||
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Greece was insolvent and an orderly default inside euro coupled with reforms would have been best.
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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John Van Reenen |
LSE | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
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Not very clear what doing the same thing 2 years earlier would have bought them...
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Beatrice Weder di Mauro |
The Graduate Institute, Geneva | Bio/Vote History | ||
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Karl Whelan |
University College Dublin | Bio/Vote History | ||
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Euro membership provided stability and low interest rates. The damage was done by "debt denial " and excessively tight fiscal policy.
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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Barry Eichengreen and I tell the story, see the URL.
-see background information here |
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Fabrizio Zilibotti |
Yale University | Bio/Vote History | ||
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In 2011, private-sector holders of Greek debt did take a 53% write-down on the value of their holdings.
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