Question A:
Rising energy prices suggest that the European Central Bank and the Federal Reserve will have to increase interest rates faster than they intended to before the invasion.
Responses
Responses weighted by each expert's confidence
Question B:
Increased public spending by European countries to accommodate larger defense budgets, migration inflows and accelerated investment in alternative energy sources would be better financed mostly through taxes, rather than debt.
Responses
Responses weighted by each expert's confidence
Question C:
Economic damage from the shock to global commodity markets will fall disproportionately hard on low- and middle-income countries.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
 Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
Although the interest rate rises may not have significant direct effects on this type of inflation, they may have important indirect ones.
|
||||
 Pol Antras |
Harvard | Bio/Vote History | ||
|
|
||||
 Oriana Bandiera |
London School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
|
problem more acute for fed than ecb. in europe, demand may be weak on its own, limiting inflation without the need for tighter money.
|
||||
 Nicholas Bloom |
Stanford | Bio/Vote History | ||
|
The Fed has a dual mandate and the invasion likely reduce growth and employment, which has an offsetting effect of lowering likely rates.
|
||||
 Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
|
|
||||
 Elena Carletti |
Bocconi | Bio/Vote History | ||
|
|
||||
 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
|
|
||||
 Paul De Grauwe |
LSE | Bio/Vote History | ||
|
|
||||
 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
|
|
||||
 Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
|
|
||||
 Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
|
|
||||
 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Did Not Answer | Bio/Vote History | |
|
|
||||
 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
|
Else they risk losing credibility as inflation targeters, with a possible deanchoring of medium term inflation expectations, hard to revert
|
||||
 Francesco Giavazzi |
Bocconi | Did Not Answer | Bio/Vote History | |
|
|
||||
 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
|
|
||||
 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
|
it is a real shock not much monetary policy can do
|
||||
 Sergei Guriev |
Sciences Po | Bio/Vote History | ||
|
|
||||
 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
|
|
||||
 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
|
|
||||
 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
|
There are considerations in both directions that may require the ECB to condition an interest move on inflationary dynamics in the summer
|
||||
 Botond Kőszegi |
Central European University | Bio/Vote History | ||
|
|
||||
 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
|
|
||||
 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
|
Depends on view of how transient increases in energy prices are. Lots of volatility in energy prices.
|
||||
 Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
|
|
||||
 Costas Meghir |
Yale | Bio/Vote History | ||
|
|
||||
 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
|
It is a complete misconception that central banks should react to such a supply shock (by itself contractionary) by raising interest rates.
|
||||
 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
|
Even though this is non-core inflation, it needs checking because it could spill over into inflation expectations, especially if persistent.
|
||||
 Torsten Persson |
Stockholm University | Bio/Vote History | ||
|
|
||||
 Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
|
that's how central banks think.I think it's a mistake. Relative price changes should be allowed to happen without macro tightening
|
||||
 Richard Portes |
London Business School | Bio/Vote History | ||
|
They will, but it will be a mistake.
|
||||
 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
|
|
||||
 Carol Propper |
Imperial College London | Bio/Vote History | ||
|
|
||||
 Imran Rasul |
University College London | Bio/Vote History | ||
|
|
||||
 Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
|
|
||||
 Ricardo Reis |
London School of Economics | Bio/Vote History | ||
|
Ceteris paribus, yes. How much / how fast requires careful analysis.
-see background information here |
||||
 Rafael Repullo |
CEMFI | Bio/Vote History | ||
|
|
||||
 Hélène Rey |
London Business School | Bio/Vote History | ||
|
|
||||
 Antoinette Schoar |
MIT | Bio/Vote History | ||
|
|
||||
 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
|
|
||||
 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
|
Depends on their strategy for dealing with supply shocks.
|
||||
 John Van Reenen |
LSE | Bio/Vote History | ||
|
|
||||
 John Vickers |
Oxford | Bio/Vote History | ||
|
Too soon to say whether these effects on inflation are transitory or will become embedded through expectations etc.
|
||||
 Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
|
|
||||
 Karl Whelan |
University College Dublin | Bio/Vote History | ||
|
Often CBs can look through temporary swings in energy prices but these developments are not so temporary and are affecting other prices.
|
||||
 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
|
I thought that the lesson from supply shocks is that the central bank should not react and keep on going with its normal business.
|
||||
 Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
|
|
||||
Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
Given long term interest rates are still fairly low, I think it would be better to finance with debt rather than taxes.
|
||||
|
Pol Antras |
Harvard | Bio/Vote History | ||
|
|
||||
|
Oriana Bandiera |
London School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
|
on public finance grounds, some of it is for the future and can be financed by debt. And if demand is weak, deficit finance may be needed.
|
||||
|
Nicholas Bloom |
Stanford | Bio/Vote History | ||
|
The best way of financing government expenditures is generally independent of what that is, so likely both taxes and debt would be best.
|
||||
|
Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Elena Carletti |
Bocconi | Bio/Vote History | ||
|
|
||||
|
Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
|
Taxes for permanent military spending; debt preferable when feasible for temporary migration-linked and climate-related investments
|
||||
|
Paul De Grauwe |
LSE | Bio/Vote History | ||
|
|
||||
|
Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
|
|
||||
|
Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
|
|
||||
|
Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
|
Taxation during a stagflation period would not be the best strategy
|
||||
|
Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
|
It should not be independent of the initial debt/GDP ratio
|
||||
|
Francesco Giavazzi |
Bocconi | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Rachel Griffith |
University of Manchester | Bio/Vote History | ||
|
|
||||
|
Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
|
|
||||
|
Sergei Guriev |
Sciences Po | Bio/Vote History | ||
|
Migration is a temporary shock, should be financed via debt. Increased investment in defense and green - permanent, to be financed via taxes
|
||||
|
Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
|
Both will be needed, including imaginative tax changes to address distributional consequences of the associated relative price changes.
|
||||
|
Beata Javorcik |
University of Oxford | Bio/Vote History | ||
|
|
||||
|
Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
|
|
||||
|
Botond Kőszegi |
Central European University | Bio/Vote History | ||
|
|
||||
|
Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Christian Leuz |
Chicago Booth | Bio/Vote History | ||
|
Defense & energy transition are long-run expansions of public spending, so taxes better to avoid distortions from irregular tax patterns
-see background information here -see background information here |
||||
|
Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Costas Meghir |
Yale | Bio/Vote History | ||
|
|
||||
|
Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
|
Basic tax smoothing arguments prescribe that extraordinary defense spending (e.g. for a war) should be debt financed.
|
||||
|
Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Torsten Persson |
Stockholm University | Bio/Vote History | ||
|
|
||||
|
Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
|
It's not the time to hit the economy with higher taxes. The investment components should definitely not be financed by taxes
|
||||
|
Richard Portes |
London Business School | Bio/Vote History | ||
|
Borrowing at current rates is still a good deal!
|
||||
|
Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Carol Propper |
Imperial College London | Bio/Vote History | ||
|
|
||||
|
Imran Rasul |
University College London | Bio/Vote History | ||
|
|
||||
|
Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
|
|
||||
|
Ricardo Reis |
London School of Economics | Bio/Vote History | ||
|
Depends. Unclear for instance how permanent/transitory each of these are
|
||||
|
Rafael Repullo |
CEMFI | Bio/Vote History | ||
|
|
||||
|
Hélène Rey |
London Business School | Bio/Vote History | ||
|
|
||||
|
Antoinette Schoar |
MIT | Bio/Vote History | ||
|
|
||||
|
Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
|
Ageing populations will strain future budgets. Governments must save now, not increase the debt
|
||||
|
Daniel Sturm |
London School of Economics | Bio/Vote History | ||
|
If there is a sustained increase in (defence) spending, it will eventually have to be tax financed or displace other expenditure.
|
||||
|
John Van Reenen |
LSE | Bio/Vote History | ||
|
|
||||
|
John Vickers |
Oxford | Bio/Vote History | ||
|
|
||||
|
Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
|
|
||||
|
Karl Whelan |
University College Dublin | Bio/Vote History | ||
|
If these are permanent increases then yes eventually raise taxes but now would not be a good time given all the other negative factors.
|
||||
|
Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
|
I can't see a general rule. Some countries already have high taxes, other large deficits, and some both!
|
||||
|
Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
|
|
||||
Question C Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
|
Franklin Allen |
Imperial College London | Bio/Vote History | ||
|
Given the commodities affected, particularly wheat and oil, emerging countries are likely to be badly affect by these price changes.
|
||||
|
Pol Antras |
Harvard | Bio/Vote History | ||
|
|
||||
|
Oriana Bandiera |
London School of Economics | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
|
more dependence on food and energy.
|
||||
|
Nicholas Bloom |
Stanford | Bio/Vote History | ||
|
|
||||
|
Richard William Blundell |
University College London | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Elena Carletti |
Bocconi | Bio/Vote History | ||
|
|
||||
|
Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
|
|
||||
|
Paul De Grauwe |
LSE | Bio/Vote History | ||
|
|
||||
|
Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
|
|
||||
|
Ernst Fehr |
Universität Zurich | Bio/Vote History | ||
|
|
||||
|
Xavier Freixas |
Barcelona GSE | Bio/Vote History | ||
|
|
||||
|
Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
|
|
||||
|
Francesco Giavazzi |
Bocconi | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Rachel Griffith |
University of Manchester | Bio/Vote History | ||
|
|
||||
|
Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
|
|
||||
|
Sergei Guriev |
Sciences Po | Bio/Vote History | ||
|
|
||||
|
Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
|
On average, though much variation in the impact on different low and middle income countries.
|
||||
|
Beata Javorcik |
University of Oxford | Bio/Vote History | ||
|
Low and middle-income countries that are commodity importers.
|
||||
|
Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
|
|
||||
|
Botond Kőszegi |
Central European University | Bio/Vote History | ||
|
|
||||
|
Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Christian Leuz |
Chicago Booth | Bio/Vote History | ||
|
Shocks typically fall disprop. on these countries but commodity prices increases often positively affect those that have nat resources
|
||||
|
Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
|
|
||||
|
Costas Meghir |
Yale | Bio/Vote History | ||
|
|
||||
|
Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
|
These countries have the highest exposure and least resilience to these shocks, which are also likely to stir civil unrest in their society.
|
||||
|
Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
|
It is better to be a commodity exporter than importer right now, and will be for a while.
|
||||
|
Torsten Persson |
Stockholm University | Bio/Vote History | ||
|
|
||||
|
Christopher Pissarides |
London School of Economics and Political Science | Bio/Vote History | ||
|
Richer countries are more diversified and will absorb the shock more easily
|
||||
|
Richard Portes |
London Business School | Bio/Vote History | ||
|
|
||||
|
Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
|
|
||||
|
Carol Propper |
Imperial College London | Bio/Vote History | ||
|
|
||||
|
Imran Rasul |
University College London | Bio/Vote History | ||
|
|
||||
|
Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
|
|
||||
|
Ricardo Reis |
London School of Economics | Bio/Vote History | ||
|
Very heterogeneous group, including some large net exporters and net importers of different commodities.
-see background information here |
||||
|
Rafael Repullo |
CEMFI | Bio/Vote History | ||
|
Except for low- and middle-income countries producing these commodities.
|
||||
|
Hélène Rey |
London Business School | Bio/Vote History | ||
|
Depends whether commodity exporter/importer etc...
|
||||
|
Antoinette Schoar |
MIT | Bio/Vote History | ||
|
|
||||
|
Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
|
The energy crisis will hit the more energy dependent countries harder. Some but not all poorer countries are more energy dependent
|
||||
|
Daniel Sturm |
London School of Economics | Bio/Vote History | ||
|
|
||||
|
John Van Reenen |
LSE | Bio/Vote History | ||
|
|
||||
|
John Vickers |
Oxford | Bio/Vote History | ||
|
Effects will vary according to net commodity positions but overall disproportionate negative seems likely, including indirect effects too.
|
||||
|
Hans-Joachim Voth |
University of Zurich | Bio/Vote History | ||
|
|
||||
|
Karl Whelan |
University College Dublin | Bio/Vote History | ||
|
Poorer countries spend a higher share of their income on basic commodities and are less likely to have strategic reserves.
|
||||
|
Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
|
|
||||
|
Fabrizio Zilibotti |
Yale University | Did Not Answer | Bio/Vote History | |
|
|
||||
