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The Six-Year Hangover: An Assessment Of The Effectiveness Of Unconventional Monetary Policy In Dealing With Debt Overhang Within The U.S. Economy, Meredith Moshier
The Six-Year Hangover: An Assessment Of The Effectiveness Of Unconventional Monetary Policy In Dealing With Debt Overhang Within The U.S. Economy, Meredith Moshier
Honors Theses
After the Financial Crisis of 2007 to 2008, the Federal Reserve and the federal government used monetary and fiscal policy to buoy the economy out of the recession, but the Fed had to turn to non-standard forms of monetary policy, or unconventional monetary policy. The Federal Reserve used forward guidance, quantitative easing, and the maturity extension program to: lower interest rates, raise inflation expectations, and increase GDP. Six years after the Financial Crisis, the Federal Reserve has begun to taper from unconventional monetary policy. Yet, there has been much debate as to whether unconventional monetary policy is effective or not, …
Government Policy And Moral Hazard In The 2007-2009 Financial Crisis, Ariana Abrams
Government Policy And Moral Hazard In The 2007-2009 Financial Crisis, Ariana Abrams
Honors Theses
The US government has invested over $3 trillion in financial assistance programs and bailouts for ailing companies affected by the 2007-2009 financial crisis. This paper analyzes the different government policy efforts in response to the collapse of the U.S. financial sector and whether these efforts increased the risk of moral hazard for small, medium, and large banks. Moral hazard occurs when a company has an incentive to take greater risks than it otherwise would, because the company gains all the benefits from excessive risk-taking, but does not bear all of the losses. I measure moral hazard through the debt-to-equity ratio, …