Question A:
In an economy open to capital flows, monetary policy can only be effective with a floating exchange rate.
Responses
© 2025. Kent A. Clark Center for Global Markets.
30%
9%
0%
2%
14%
35%
9%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
4%
21%
52%
23%
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
© 2025. Kent A. Clark Center for Global Markets.
30%
14%
2%
12%
33%
9%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
10%
23%
55%
12%
0%
Question C:
The key feature making the US a more natural optimum currency area than the euro area is higher labor mobility.
Responses
© 2025. Kent A. Clark Center for Global Markets.
30%
7%
0%
12%
23%
23%
5%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
23%
30%
39%
8%
Question A Participant Responses
Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Fixed exchange rates create greater certainty, but also more room for mistakes and unsustainable booms. So how they are managed is key.
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 Joseph Altonji |
Yale | Bio/Vote History | ||
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 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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 Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Managed float and reserve holdings are necessary as foreign denominated debt and financial stability complicates matters.
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Depends, on the presence or absence of balance sheet effects (foreign currency denominated debt) etc. etc.
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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 Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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 Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Robert Hall |
Stanford | Bio/Vote History | ||
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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Countries should keep flexibility as an option for those (hopefully rare) times when the natural exchange rate changes significantly.
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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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?
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Bio/Vote History | ||
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 William Nordhaus |
Yale | Bio/Vote History | ||
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Clearly depends on many factors -- openness, maturity and size of domestic capital markets, etc.
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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If the central bank can set the interest rate separately from the world rate, this can be a big advantage.
-see background information here |
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Did Not Answer | Bio/Vote History | |
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 Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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 James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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 Richard Thaler |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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 Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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Question C Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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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 |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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The fact that the US has a strong central government is at least as important as labor mobility.
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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*A* key feature, but *the* key feature? Huge differences in risk-sharing through central government.
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David Autor |
MIT | Bio/Vote History | ||
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Labor mobility is declining in the US. Financial stability, fiscal matters and a common safe asset play at least as an important role.
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Did Not Answer | Bio/Vote History | |
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Fiscal federalism is also key. So too is the symmetry of shocks (if you believe Bayoumi & Eichengreen 1993).
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Did Not Answer | Bio/Vote History | |
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Pinelopi Goldberg |
Yale | Did Not Answer | Bio/Vote History | |
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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Fiscal transfers, too
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Robert Hall |
Stanford | Bio/Vote History | ||
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Oliver Hart |
Harvard | Bio/Vote History | ||
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Labor mobility is important but I'm not sure it's the key factor. Federal payments to the states also matter.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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While labor mobility may be the key factor, I would add common language and institutions, and population and capital mobility.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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that is certainly part of it, but a common fiscal policy, language matter too.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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US also has greater fiscal integration
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Eric Maskin |
Harvard | Bio/Vote History | ||
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Labor mobility is one factor, but I don't know whether it is the most important.
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William Nordhaus |
Yale | Bio/Vote History | ||
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Maybe better "a key" rather than "the key." Other important factors are integration of other markets, mobility of capital, legal structure
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Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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This is important but not all (and this comparative advantage has been eroding). Also very important is fiscal federalism in the US.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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The US has other advantages, including a central government and hence common fiscal policy, as well as shared cultural norms.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
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Agree that labor mobility is A key feature. However, the US fiscal union is also a key feature.
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Richard Schmalensee |
MIT | Did Not Answer | Bio/Vote History | |
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Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Fiscal transfers are also important
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James Stock |
Harvard | Did Not Answer | Bio/Vote History | |
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Richard Thaler |
Chicago Booth | Did Not Answer | Bio/Vote History | |
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Christopher Udry |
Northwestern | Did Not Answer | Bio/Vote History | |
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