US

Monetary Policy

All else equal, the Fed's new plan to increase the maturity of its Treasury holdings will boost expected real GDP growth for calendar year 2012 by at least one percentage point.

Responses weighted by each expert's confidence

Participant University Vote Confidence Bio/Vote History
Acemoglu
Daron Acemoglu
MIT
Uncertain
4
Bio/Vote History
Expansionary policy, aimed at reducing long-term interest rates. Should be successful but no idea about whether it gets 1% growth for 2012.
Alesina
Alberto Alesina
Harvard
Strongly Disagree
8
Bio/Vote History
Altonji
Joseph Altonji
Yale
Uncertain
1
Bio/Vote History
Auerbach
Alan Auerbach
Berkeley
Disagree
3
Bio/Vote History
Autor
David Autor
MIT
Disagree
3
Bio/Vote History
1pct increase in real GDP growth is a huge effect! If only it were that easy...
Baicker
Katherine Baicker
University of Chicago
Uncertain
1
Bio/Vote History
Such a big effect seems unlikely.
Bertrand
Marianne Bertrand
Chicago
Uncertain
1
Bio/Vote History
Chetty
Raj Chetty
Harvard
No Opinion
Bio/Vote History
Chevalier
Judith Chevalier
Yale
Uncertain
3
Bio/Vote History
Currie
Janet Currie
Princeton
Uncertain
2
Bio/Vote History
Cutler
David Cutler
Harvard
Uncertain
1
Bio/Vote History
This isn't an area where I know the most recent literature.
Deaton
Angus Deaton
Princeton
Disagree
2
Bio/Vote History
Hard to imagine that high long term interests are the problem, or that we know enough to be so sure.
Duffie
Darrell Duffie
Stanford
Disagree
4
Bio/Vote History
It is will probably have a positive effect, but 1% of GDP is a lot to expect from a moderate twist.
Edlin
Aaron Edlin
Berkeley
Strongly Disagree
9
Bio/Vote History
One percent is a lot. Any effects will be smaller.
Eichengreen
Barry Eichengreen
Berkeley
Strongly Disagree
3
Bio/Vote History
Fair
Ray Fair
Yale
Strongly Disagree
10
Bio/Vote History
Way too large an effect.
Goldberg
Pinelopi Goldberg
Yale
Disagree
5
Bio/Vote History
The decrease in long term rates is likely to promote growth, but a one percentage boost for 2012 seems excessively optimistic / unfounded.
Goldin
Claudia Goldin
Harvard
Uncertain
2
Bio/Vote History
Making more funds available for long-term borrowing need not raise investment with so much uncertainty. Also one %age point is too precise
Goolsbee
Austan Goolsbee
Chicago
Disagree
7
Bio/Vote History
even if it works to lower long term rates, they are already so low it's hard to see how more reduction will induce much more investment etc
Greenstone
Michael Greenstone
University of Chicago
Uncertain
3
Bio/Vote History
I am unaware of convincing empirical evidence.
Hall
Robert Hall
Stanford
Disagree
4
Bio/Vote History
Need to be sure the Treasury does not offset the twist. Also most likely that lowering the long Treasury rate has little effect on other rts
Holmström
Bengt Holmström
MIT Did Not Answer Bio/Vote History
Hoxby
Caroline Hoxby
Stanford
Disagree
9
Bio/Vote History
Judd
Kenneth Judd
Stanford Did Not Answer Bio/Vote History
Kashyap
Anil Kashyap
Chicago Booth
Strongly Disagree
10
Bio/Vote History
The gains will be tiny. Monetary policy is a poor tool for what ails the economy. The mandate says try it, but political risks are real.
Klenow
Pete Klenow
Stanford
Disagree
7
Bio/Vote History
This seems like policy ahead of the evidence. Not that I blame the Fed for trying.
-see background information here
Lazear
Edward Lazear
Stanford
Disagree
5
Bio/Vote History
Fed has already used its best weapons. This is fine tuning to the extreme and unlikely to do much. It might not even go in the right directi
Levin
Jonathan Levin
Stanford
Disagree
5
Bio/Vote History
Might have some effect but hard to hard to see how it would be anywhere near this large.
Nordhaus
William Nordhaus
Yale
Disagree
8
Bio/Vote History
Very likely to increase real output, but the effect is probably in the 0 - 1/2 percent range.
Obstfeld
Maurice Obstfeld
Berkeley
Strongly Disagree
10
Bio/Vote History
1% is a huge effect to forecast given (i) modest effect on long-term interest rates and (ii) uncertain effect of long-term rates on activity
Rouse
Cecilia Rouse
Princeton
Uncertain
5
Bio/Vote History
Saez
Emmanuel Saez
Berkeley
Uncertain
3
Bio/Vote History
Scheinkman
José Scheinkman
Columbia University
No Opinion
Bio/Vote History
Schmalensee
Richard Schmalensee
MIT
Disagree
4
Bio/Vote History
I expect a positive impact, as the Fed plainly does. But one percentage point seems implausibly large -- at least to a micro person...
Shin
Hyun Song Shin
Princeton
Uncertain
6
Bio/Vote History
Stock
James Stock
Harvard
Disagree
8
Bio/Vote History
Reducing long term rates by (say) 25 basis points or less is likely to have a positive but small effect on short-term growth.
Stokey
Nancy Stokey
University of Chicago
Uncertain
1
Bio/Vote History
There is little or no evidence one way or the other---little basis for *anyone* to feel confident.
Thaler
Richard Thaler
Chicago Booth
No Opinion
Bio/Vote History
Not a monetary economist. No idea.
Udry
Christopher Udry
Northwestern
Uncertain
1
Bio/Vote History
Zingales
Luigi Zingales
Chicago Booth
Strongly Disagree
9
Bio/Vote History
We Are not even sure it can impact the real rate, let alone growth