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
Responses weighted by each expert's confidence
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Expansionary policy, aimed at reducing long-term interest rates. Should be successful but no idea about whether it gets 1% growth for 2012.
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 Alberto Alesina |
Harvard | 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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1pct increase in real GDP growth is a huge effect! If only it were that easy...
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 Katherine Baicker |
University of Chicago | Bio/Vote History | ||
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Such a big effect seems unlikely.
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Raj Chetty |
Harvard | Bio/Vote History | ||
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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 Janet Currie |
Princeton | Bio/Vote History | ||
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 David Cutler |
Harvard | Bio/Vote History | ||
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This isn't an area where I know the most recent literature.
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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Hard to imagine that high long term interests are the problem, or that we know enough to be so sure.
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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It is will probably have a positive effect, but 1% of GDP is a lot to expect from a moderate twist.
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 Aaron Edlin |
Berkeley | Bio/Vote History | ||
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One percent is a lot. Any effects will be smaller.
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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Way too large an effect.
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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The decrease in long term rates is likely to promote growth, but a one percentage boost for 2012 seems excessively optimistic / unfounded.
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 Claudia Goldin |
Harvard | Bio/Vote History | ||
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Making more funds available for long-term borrowing need not raise investment with so much uncertainty. Also one %age point is too precise
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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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
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 Michael Greenstone |
University of Chicago | Bio/Vote History | ||
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I am unaware of convincing empirical evidence.
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 Robert Hall |
Stanford | Bio/Vote History | ||
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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
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 Bengt Holmström |
MIT | Did Not Answer | Bio/Vote History | |
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 Caroline Hoxby |
Stanford | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Did Not Answer | Bio/Vote History | |
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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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.
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 Pete Klenow |
Stanford | Bio/Vote History | ||
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This seems like policy ahead of the evidence. Not that I blame the Fed for trying.
-see background information here |
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 Edward Lazear |
Stanford | Bio/Vote History | ||
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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
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 Jonathan Levin |
Stanford | Bio/Vote History | ||
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Might have some effect but hard to hard to see how it would be anywhere near this large.
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 William Nordhaus |
Yale | Bio/Vote History | ||
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Very likely to increase real output, but the effect is probably in the 0 - 1/2 percent range.
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 Maurice Obstfeld |
Berkeley | Bio/Vote History | ||
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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
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 Cecilia Rouse |
Princeton | Bio/Vote History | ||
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 José Scheinkman |
Columbia University | Bio/Vote History | ||
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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I expect a positive impact, as the Fed plainly does. But one percentage point seems implausibly large -- at least to a micro person...
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 Hyun Song Shin |
Princeton | Bio/Vote History | ||
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 James Stock |
Harvard | Bio/Vote History | ||
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Reducing long term rates by (say) 25 basis points or less is likely to have a positive but small effect on short-term growth.
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 Nancy Stokey |
University of Chicago | Bio/Vote History | ||
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There is little or no evidence one way or the other---little basis for *anyone* to feel confident.
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Not a monetary economist. No idea.
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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 Luigi Zingales |
Chicago Booth | Bio/Vote History | ||
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We Are not even sure it can impact the real rate, let alone growth
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