US Economic Experts Panel

 

 

In October, the US Department of Justice launched a federal antitrust lawsuit against Google, accusing the technology giant of abusing its dominance in the market for internet search. We invited both our US and European panels to express their views on some of the issues surrounding this case. We asked the experts whether they agreed or disagreed with the following statements, and, if so, how strongly and with what degree of confidence:

 

This week's US Economic Experts Panel statement:

The practical application of auction theory to the licensing of rights to use public assets like radiospectrum and other natural resources has generated substantially higher government revenues and better allocative efficiency worldwide than would have happened under previous arrangements. 

This week's US Economic Experts Panel statements:
A) Restoring the top individual federal income tax rate to 39.6% for incomes over $400,000 (from the current 37%) and taxing the capital gains and dividends of taxpayers with income over $1 million at that top rate (instead of the current preferential rate of 20%), with no other associated changes in taxes or spending, would be unlikely to hurt economic growth noticeably.

B) Restoring the top tax rate, removing the preferential rate on capital gains and dividends, and raising the corporate tax rate from 21% to 28%, with no other associated changes in taxes or spending, would be likely to lead to a meaningful sustained reduction in fiscal deficits. 

This week's US Economic Experts Panel statements:
A) The US economy would be substantially stronger today if the state and local ‘stay-at-home’ orders had been more uniform and lasted longer in the first half of the year.

B) The economy will receive a substantial boost as soon as K-12 schools can be safely opened in person nationwide. 

This week's US Economic Experts Panel statement:

The Fed's revised strategy to focus on employment shortfalls and a more flexible interpretation of the inflation target will make little practical difference to monetary policy outcomes over the next decade. 

Despite the latest GDP figures showing that the US economy had contracted nearly 10% in the second quarter and with unemployment insurance claim numbers continuing to rise, there is still no resolution in Washington on whether the enhanced federal benefits for the jobless set to expire today (31 July) will be extended in some form.

 

An executive order by President Trump in late June has suspended a range of visas for skilled workers. We invited our panel to express their views on the potential impact of the visa ban on US leadership in science and innovation; on the attractiveness of US universities for foreign students; and on the location of corporate research facilities.

 

This week’s IGM Economic Experts Panel statements:

A) Given the social and regulatory pressures to keep prices down for drugs and vaccines to treat Covid-19, the financial incentives for pharmaceutical companies to invest in such products are below the value of the investment to society.

B) Government commitments to pay developers and manufacturers above average costs for an effective vaccine or drug treatments for Covid-19 would accelerate production.

C) Given the positive externalities from vaccination, an effective Covid-19 vaccine should be mandatory for every US resident (except those with health exceptions, such as infants and people with compromised immunity) with the cost covered by the federal government.