US

International Macroeconomics

Question A:

In an economy open to capital flows, monetary policy can only be effective with a floating exchange rate.

Responses weighted by each expert's confidence

Question B:

For emerging and developing economies open to the world capital market, a flexible exchange rate confers little advantage over a pegged exchange rate in terms of economic stability.

Responses weighted by each expert's confidence

Question C:

The key feature making the US a more natural optimum currency area than the euro area is higher labor mobility.

Responses weighted by each expert's confidence

Question A Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
3
Bio/Vote History
The market may expect the exchange rate pegged to be dropped or modified, affecting (expected) relative prices.
Altonji
Joseph Altonji
Yale
Agree
5
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Agree
3
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago Did Not Answer Bio/Vote History
Banerjee
Abhijit Banerjee
MIT Did Not Answer Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
2
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Agree
5
Bio/Vote History
In theory - in reality picture is more mixed as one faces financial frictions.
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale Did Not Answer Bio/Vote History
Cutler
David Cutler
Harvard
Uncertain
4
Bio/Vote History
Deaton
Angus Deaton
Princeton
No Opinion
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Agree
8
Bio/Vote History
A corollary of Mundell's trilemma.
Edlin
Aaron Edlin
Berkeley
Agree
3
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
If domestic and foreign bonds are imperfect substitutes, limited scope may remain.
Einav
Liran Einav
Stanford
No Opinion
Bio/Vote History
Fair
Ray Fair
Yale
Agree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT Did Not Answer Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale Did Not Answer Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Agree
5
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago Did Not Answer Bio/Vote History
Hall
Robert Hall
Stanford
Agree
6
Bio/Vote History
Hart
Oliver Hart
Harvard
Disagree
5
Bio/Vote History
A helicopter drop might work if there is unemployment.
Holmström
Bengt Holmström
MIT
Agree
6
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Hoynes
Hilary Hoynes
Berkeley
Uncertain
5
Bio/Vote History
Judd
Kenneth Judd
Stanford
Agree
6
Bio/Vote History
Kaplan
Steven Kaplan
Chicago Booth
Uncertain
2
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Strongly Agree
10
Bio/Vote History
Klenow
Pete Klenow
Stanford
Strongly Agree
5
Bio/Vote History
Levin
Jonathan Levin
Stanford
Agree
2
Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
7
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Strongly Agree
8
Bio/Vote History
has the trilemma been cancelled?
Obstfeld
Maurice Obstfeld
Berkeley
Uncertain
10
Bio/Vote History
If the authorities engage in a managed float they can retain some degree of monetary autonomy--albeit likely less than under a free float.
Saez
Emmanuel Saez
Berkeley
Agree
3
Bio/Vote History
Samuelson
Larry Samuelson
Yale
No Opinion
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
Agree
4
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT Did Not Answer Bio/Vote History
Shapiro
Carl Shapiro
Berkeley Did Not Answer Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Strongly Agree
8
Bio/Vote History
Stock
James Stock
Harvard Did Not Answer Bio/Vote History
Thaler
Richard Thaler
Chicago Booth Did Not Answer Bio/Vote History
Udry
Christopher Udry
Northwestern Did Not Answer Bio/Vote History

Question B Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
3
Bio/Vote History
Fixed exchange rates create greater certainty, but also more room for mistakes and unsustainable booms. So how they are managed is key.
Altonji
Joseph Altonji
Yale
Uncertain
2
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Disagree
3
Bio/Vote History
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago Did Not Answer Bio/Vote History
Banerjee
Abhijit Banerjee
MIT Did Not Answer Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
No Opinion
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Uncertain
7
Bio/Vote History
Managed float and reserve holdings are necessary as foreign denominated debt and financial stability complicates matters.
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale Did Not Answer Bio/Vote History
Cutler
David Cutler
Harvard
Uncertain
4
Bio/Vote History
Deaton
Angus Deaton
Princeton
No Opinion
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Agree
2
Bio/Vote History
Edlin
Aaron Edlin
Berkeley
No Opinion
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Depends, on the presence or absence of balance sheet effects (foreign currency denominated debt) etc. etc.
Einav
Liran Einav
Stanford
Agree
1
Bio/Vote History
Fair
Ray Fair
Yale
Disagree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT Did Not Answer Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale Did Not Answer Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Uncertain
1
Bio/Vote History
Greenstone
Michael Greenstone
University of Chicago Did Not Answer Bio/Vote History
Hall
Robert Hall
Stanford
Uncertain
3
Bio/Vote History
Hart
Oliver Hart
Harvard
Disagree
5
Bio/Vote History
Holmström
Bengt Holmström
MIT
Agree
5
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Hoynes
Hilary Hoynes
Berkeley
Uncertain
5
Bio/Vote History
Judd
Kenneth Judd
Stanford
Disagree
6
Bio/Vote History
Countries should keep flexibility as an option for those (hopefully rare) times when the natural exchange rate changes significantly.
Kaplan
Steven Kaplan
Chicago Booth
Uncertain
2
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
5
Bio/Vote History
I think it is country specific and depends in part on what they can do to manage "hot money" -- do they have a macro prudential regime?
Klenow
Pete Klenow
Stanford
Disagree
3
Bio/Vote History
Levin
Jonathan Levin
Stanford
Uncertain
2
Bio/Vote History
Maskin
Eric Maskin
Harvard
Agree
4
Bio/Vote History
Nordhaus
William Nordhaus
Yale
Uncertain
8
Bio/Vote History
Clearly depends on many factors -- openness, maturity and size of domestic capital markets, etc.
Obstfeld
Maurice Obstfeld
Berkeley
Strongly Disagree
10
Bio/Vote History
If the central bank can set the interest rate separately from the world rate, this can be a big advantage.
-see background information here
Saez
Emmanuel Saez
Berkeley
Uncertain
5
Bio/Vote History
Samuelson
Larry Samuelson
Yale
No Opinion
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
No Opinion
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT Did Not Answer Bio/Vote History
Shapiro
Carl Shapiro
Berkeley Did Not Answer Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Uncertain
1
Bio/Vote History
Stock
James Stock
Harvard Did Not Answer Bio/Vote History
Thaler
Richard Thaler
Chicago Booth Did Not Answer Bio/Vote History
Udry
Christopher Udry
Northwestern Did Not Answer Bio/Vote History

Question C Participant Responses

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Disagree
7
Bio/Vote History
US mobility is exaggerated (see refs for small mobility effects from large shocks). Institutions and correlation of cycle is more important.
-see background information here
-see background information here
-see background information here
Altonji
Joseph Altonji
Yale
Uncertain
5
Bio/Vote History
The fact that the US has a strong central government is at least as important as labor mobility.
Auerbach
Alan Auerbach
Berkeley
Disagree
3
Bio/Vote History
*A* key feature, but *the* key feature? Huge differences in risk-sharing through central government.
Autor
David Autor
MIT
No Opinion
Bio/Vote History
Baicker
Katherine Baicker
University of Chicago Did Not Answer Bio/Vote History
Banerjee
Abhijit Banerjee
MIT Did Not Answer Bio/Vote History
Bertrand
Marianne Bertrand
Chicago
Agree
1
Bio/Vote History
Brunnermeier
Markus Brunnermeier
Princeton
Disagree
9
Bio/Vote History
Labor mobility is declining in the US. Financial stability, fiscal matters and a common safe asset play at least as an important role.
Chetty
Raj Chetty
Harvard Did Not Answer Bio/Vote History
Chevalier
Judith Chevalier
Yale Did Not Answer Bio/Vote History
Cutler
David Cutler
Harvard
Agree
4
Bio/Vote History
Deaton
Angus Deaton
Princeton
No Opinion
Bio/Vote History
Duffie
Darrell Duffie
Stanford
Strongly Agree
2
Bio/Vote History
Edlin
Aaron Edlin
Berkeley
No Opinion
Bio/Vote History
Eichengreen
Barry Eichengreen
Berkeley
Uncertain
5
Bio/Vote History
Fiscal federalism is also key. So too is the symmetry of shocks (if you believe Bayoumi & Eichengreen 1993).
Einav
Liran Einav
Stanford
Agree
1
Bio/Vote History
Fair
Ray Fair
Yale
Agree
5
Bio/Vote History
Finkelstein
Amy Finkelstein
MIT Did Not Answer Bio/Vote History
Goldberg
Pinelopi Goldberg
Yale Did Not Answer Bio/Vote History
Goolsbee
Austan Goolsbee
Chicago
Uncertain
5
Bio/Vote History
Fiscal transfers, too
Greenstone
Michael Greenstone
University of Chicago Did Not Answer Bio/Vote History
Hall
Robert Hall
Stanford
Uncertain
2
Bio/Vote History
Hart
Oliver Hart
Harvard
Disagree
5
Bio/Vote History
Labor mobility is important but I'm not sure it's the key factor. Federal payments to the states also matter.
Holmström
Bengt Holmström
MIT
Agree
4
Bio/Vote History
Hoxby
Caroline Hoxby
Stanford Did Not Answer Bio/Vote History
Hoynes
Hilary Hoynes
Berkeley
Uncertain
5
Bio/Vote History
Judd
Kenneth Judd
Stanford
Agree
7
Bio/Vote History
While labor mobility may be the key factor, I would add common language and institutions, and population and capital mobility.
Kaplan
Steven Kaplan
Chicago Booth
Uncertain
2
Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Uncertain
3
Bio/Vote History
that is certainly part of it, but a common fiscal policy, language matter too.
Klenow
Pete Klenow
Stanford
Agree
4
Bio/Vote History
Levin
Jonathan Levin
Stanford
Uncertain
2
Bio/Vote History
US also has greater fiscal integration
Maskin
Eric Maskin
Harvard
Uncertain
4
Bio/Vote History
Labor mobility is one factor, but I don't know whether it is the most important.
Nordhaus
William Nordhaus
Yale
Strongly Agree
8
Bio/Vote History
Maybe better "a key" rather than "the key." Other important factors are integration of other markets, mobility of capital, legal structure
Obstfeld
Maurice Obstfeld
Berkeley
Agree
9
Bio/Vote History
This is important but not all (and this comparative advantage has been eroding). Also very important is fiscal federalism in the US.
Saez
Emmanuel Saez
Berkeley
Agree
6
Bio/Vote History
Samuelson
Larry Samuelson
Yale
Agree
8
Bio/Vote History
The US has other advantages, including a central government and hence common fiscal policy, as well as shared cultural norms.
Scheinkman
José Scheinkman
Columbia University
Uncertain
5
Bio/Vote History
Agree that labor mobility is A key feature. However, the US fiscal union is also a key feature.
Schmalensee
Richard Schmalensee
MIT Did Not Answer Bio/Vote History
Shapiro
Carl Shapiro
Berkeley Did Not Answer Bio/Vote History
Shimer
Robert Shimer
University of Chicago
Disagree
5
Bio/Vote History
Fiscal transfers are also important
Stock
James Stock
Harvard Did Not Answer Bio/Vote History
Thaler
Richard Thaler
Chicago Booth Did Not Answer Bio/Vote History
Udry
Christopher Udry
Northwestern Did Not Answer Bio/Vote History