Question 1:What damage will school closures have on economic growth over a 10-15 year horizon?
Answer:
Minor
Confidence level:
Not confident
Comment:
The baseline correlation from the work of Barro and others suggests that a loss of 1/2 year of school attainment would lower economic growth by about 0.15%. Work by Bils and Klenow though suggest that the causal effect is at most 1/3 of that, lowering the impact to 0.05%. This is minor in terms of growth, what the question asks for. But in terms of output levels, it can be significant so "moderate" would be a more appropriate choice. The best estimates I know of, from Caselli and Ciccone, show that extra schooling has a moderate impact on the level of income.
Question 2: What is the best way to (eventually) reduce public deficits and debt?
Answer:
None of the above, other, or no opinion
Confidence level:
Very confident
Comment:
High inflation will very likely fail at inflating the debt (https://ideas.repec.org/p/cpr/ceprdp/10078.html) and in itself produces insignificant revenues (http://personal.lse.ac.uk/reisr/papers/19-HofCB.pdf). In turn, perpetuities must still be paid for. So, probably the answer is a mix of public spending cuts, higher taxes, and financial repression. But, which mix depends on the country and on the future itself, so there is no best way that the question asks for.
Question 1: How urgently should the UK government address the rise in public debt?
Answer:
HM Treasury should present a long-term plan to reduce the deficit as soon as possible, but not introduce measures to do so in the upcoming budget
Confidence level:
Very confident
Comment:
It seems unwise to focus on paying for the public debt right now, when we are not even at the trough of the economic cycle. But having a clear long-term plan for fiscal policy would anchor expectations. It would remove one of the usually bigger sources of uncertainty for investment.
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Answer:
Expanded EU budget (with possible borrowing at the EU level)
Confidence level:
Confident
Comment:
Having the EU (i) create its own new fiscal space through new EU-wide taxes, (ii) issue its own bonds based on these revenues, (iii) choose how and what to spend it on, seems the option that best aligns incentives, accountability, and economic support. Importantly, this would not be very large, but it is missing at the margin. In spending, it would be smaller than national policies, complementing them. In bond issuance, it would be too small and still leave the need for a large EU-wide safe asset that banks can hold (to prevent sudden stops due to regional flights to safety and break the diabolic loop) and the best option for that would be ESBies.
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
Answer:
5-10% of GDP
Confidence level:
Not confident
Comment:
There is still so much uncertainty regarding the length of the lockdown, how gradual will be the unfreezing of the economy, or how safety measures will impact our productivity, that it is hard to forecast the future of the private economy let alone what should be the government's response to it. Still, roughly 10% of GGDP was the number put forward by the Eurogroup, and it is important to note that these would complement national policies.
The CFM surveys informs the public about the views held by prominent economists based in Europe on important macroeconomic and public policy questions. Some surveys focus specifically on the UK economy (as the CFM is a UK research centre), but surveys can in principle focus on any macroeconomic question for any region. The surveys shed light on the extent to which there is agreement or disagreement among these experts. An important motivation for the survey is to give a more comprehensive overview of the beliefs held by economists and in particular to include the views of those economists whose opinions are not frequently heard in public debates.
Questions mainly focus on macroeconomic and public policy topics. Although there are some questions that focus specifically on the UK economy, the setup of the survey is much broader and considers questions related to other countries/regions and also considers questions not tied to a specific economy.
The surveys are done in collaboration with the Centre for Economic Policy Research (CEPR).
The Economic Cost of School Closures
Question 1:What damage will school closures have on economic growth over a 10-15 year horizon?
COVID-19 and UK Public Finances
Question 2: What is the best way to (eventually) reduce public deficits and debt?
Question 1: How urgently should the UK government address the rise in public debt?
The Eurozone COVID-19 Crisis: EU Policy Options
Question 2: What is the best mechanism to pay for economic support provided by and to EU member states to combat the COVID-19 crisis?
Question 1: What is the total size of funding that you would advocate at the EU level in support of its members to weather the COVID-19 crisis this year?
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