These are pseudoscientists

h/t to Warren Mosler

High Debt Countries

Countries that let their debt loads get high risk losing control of their own fiscal sustainability, through an adverse feedback loop in which doubts by lenders lead to higher government bond rates, which in turn make debt problems more severe.

Responses weighted by each expert’s confidence

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Strongly Agree 7 Bio/Vote History
Alesina Alberto Alesina Harvard Strongly Agree 10 Bio/Vote History
Altonji Joseph Altonji Yale Agree 7 Bio/Vote History
Auerbach Alan Auerbach Berkeley Agree 7 Bio/Vote History
Autor David Autor MIT Agree 6
This is generically true, but we don’t the threshold where it matters. And not clearly true for countries that borrow in their own currency.
Bio/Vote History
Baicker Katherine Baicker Harvard Agree 3 Bio/Vote History
Bertrand Marianne Bertrand Chicago Strongly Agree 3 Bio/Vote History
Chetty Raj Chetty Harvard Agree 4 Bio/Vote History
Chevalier Judith Chevalier Yale Strongly Agree 8
“Risk” is the operative word here; it is hard to forecast ex ante at what point the negative feedback loop will become problematic.
-see background information here
Bio/Vote History
Currie Janet Currie Princeton Agree 4 Bio/Vote History
Cutler David Cutler Harvard Agree 3
Lots of particulars matter, including who it is owed to and whether the country has its own currency.
Bio/Vote History
Deaton Angus Deaton Princeton Strongly Agree 7 Bio/Vote History
Duffie Darrell Duffie Stanford Strongly Agree 10
In perfect transparent markets, the market clears at an appropriate yield in one step. In actuality, price discovery involves feedback.
Bio/Vote History
Edlin Aaron Edlin Berkeley Strongly Agree 10
Does gravity make bricks fall when dropped?
Bio/Vote History
Eichengreen Barry Eichengreen Berkeley Uncertain 7
Much depends on other factors like growth of the denominator of the debt/GDP ratio, which will vary with policies & circumstances.
Bio/Vote History
Fair Ray Fair Yale Strongly Agree 5 Bio/Vote History
Goldberg Pinelopi Goldberg Yale Agree 6 Bio/Vote History
Goldin Claudia Goldin Harvard No Opinion Bio/Vote History
Goolsbee Austan Goolsbee Chicago Did Not Answer Bio/Vote History
Greenstone Michael Greenstone MIT Agree 7
Tough question is definition of “high”. See Rogoff/Reinhardt for best evidence. Does “high” differ for country w global currency, like US?
Bio/Vote History
Hall Robert Hall Stanford Strongly Agree 8
Simple math…interesting that it has not happened to Japan, however.
Bio/Vote History
Holmström Bengt Holmström MIT Agree 8 Bio/Vote History
Hoxby Caroline Hoxby Stanford Agree 9 Bio/Vote History
Judd Kenneth Judd Stanford Agree 4
The debt load may be a factor in reputation but the US has experienced great increases in debt in the past without suffering these problems.
Bio/Vote History
Kashyap Anil Kashyap Chicago Strongly Agree 9
The only question is when the tipping point kicks in. Japan will face trouble after Europe is sorted out, as might the UK and maybe then US
-see background information here
Bio/Vote History
Klenow Pete Klenow Stanford Strongly Agree 7 Bio/Vote History
Levin Jonathan Levin Stanford Agree 6
Yes, but clearly conditions vary – right now US can borrow easily with high debt, but some euro countries cannot.
Bio/Vote History
Maskin Eric Maskin Harvard Agree 8 Bio/Vote History
Nordhaus William Nordhaus Yale Agree 7 Bio/Vote History
Obstfeld Maurice Obstfeld Berkeley Strongly Agree 10
Government vulnerability will depend on the maturity of its debt (more short term debt means more exposure) and the size of its deficit.
-see background information here
Bio/Vote History
Saez Emmanuel Saez Berkeley Uncertain 5 Bio/Vote History
Scheinkman José Scheinkman Princeton Did Not Answer Bio/Vote History
Schmalensee Richard Schmalensee MIT Agree 3 Bio/Vote History
Shin Hyun Song Shin Princeton Agree 7 Bio/Vote History
Stokey Nancy Stokey Chicago Strongly Agree 10
With debt/GDP around unity, a substantial risk premium can be the difference between the debt load being “sustainable” and “unsustainable.”
Bio/Vote History
Thaler Richard Thaler Chicago Agree 3
Yes I suppose so, but what of it?
Bio/Vote History
Udry Christopher Udry Yale Agree 3 Bio/Vote History
Zingales Luigi Zingales Chicago Strongly Agree 6 Bio/Vote History

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