The recent decline in oil prices will promote higher real GDP in the US over the next couple of years.
Responses
Responses weighted by each expert's confidence
Participant | University | Vote | Confidence | Bio/Vote History |
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Daron Acemoglu |
MIT | Bio/Vote History | ||
There will be a negative effect on the now sizable US energy sector, but the positive impact on the rest of the economy should dominate.
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Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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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 | Bio/Vote History | ||
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
A decline in oil prices leads to redistribution of wealth within the US, which favors (sub)sectors with impaired balance sheet constraints.
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Raj Chetty |
Harvard | Bio/Vote History | ||
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Judith Chevalier |
Yale | Bio/Vote History | ||
Obviously, there are losers as well as winners, but the US economy benefits on net.
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Janet Currie |
Princeton | 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 | ||
We are still net importers, right. But there could be second round effects, especially political, that could moderate or even reverse it.
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Darrell Duffie |
Stanford | Bio/Vote History | ||
Oil production investment is a negative, but reducing the cost of a raw input nets to positive, unless oil exports heavily dominate imports.
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Aaron Edlin |
Berkeley | Bio/Vote History | ||
U.S. is a large net importer. Increased oil prices in the past have slowed GDP growth.
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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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 | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
Costs would go down, Fed may keep rates low. But negative effects on oil exploration, production and potential future oil exports.
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
but not as much as in the old days because the economy is more energy efficient now and because we have become a significant producer of oil
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Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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Robert Hall |
Stanford | Bio/Vote History | ||
The 1986 decline had little effect on real GDP. Oil prices don't shift production functions. Real income rises, but not real output.
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Oliver Hart |
Harvard | Bio/Vote History | ||
There are potentially confounding general equilibrium effects but the US as a net importer of oil should benefit from increased fracking.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Bio/Vote History | ||
The U.S. econom remains strongly anti-cyclical in oil prices. Some industries suffer from lower prices, but they are dominated by winners.
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
For the average household this will be a like a tax cut, of course oil producing states suffer a bit, but overall this good news for the US
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Pete Klenow |
Stanford | Bio/Vote History | ||
Ceteris paribus. And because the U.S is still a net importer.
-see background information here |
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Jonathan Levin |
Stanford | Bio/Vote History | ||
Eric Maskin |
Harvard | Bio/Vote History | ||
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William Nordhaus |
Yale | Bio/Vote History | ||
Both because of quasi-fiscal stimulus and lower measured inflation.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
The decline in price is less significant than the technological progress in resource extraction it reflects, which should promote growth.
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José Scheinkman |
Columbia University | Bio/Vote History | ||
But if drop is result of correct forecast of weaker world economic activity, it will be hard to identify the net benefit ex-post.
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Bio/Vote History | ||
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
The US is still a net energy importer and the shock is largely a supply shock. But this will cause some reallocation away from shale
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
We have almost balanced trade in energy; the net effect will be very small (although there will be distributional effects).
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