Economic History Commons^™

The Public-Private Investment Program: The Legacy Loans Program (U.S. Gfc), Ben Henken

Journal of Financial Crises

On March 23, 2009, the U.S. Treasury, in conjunction with the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC), announced the Public-Private Investment Program (PPIP). PPIP consisted of two complementary programs designed to foster liquidity in the market for certain mortgage-related assets: The Legacy Loans Program and the Legacy Securities Program. This case study discusses the design and implementation of the Legacy Loans Program. Under this program, the FDIC and Treasury attempted to create public-private investment partnerships that—using a combination of private equity, Treasury equity, and FDIC-guaranteed debt—would purchase legacy mortgage loans from U.S. banks by way of …

The Term Asset-Backed Securities Loan Facility (Talf) (U.S. Gfc), June Rhee

Journal of Financial Crises

In the fall of 2008, the securitization market, which was the major provider of credit for consumers and small businesses, came to a near halt. Investors in this market abandoned not only the residential mortgage-backed securities that triggered the financial crisis but also consumer and business asset-backed securities (ABS), which had a long track record of strong performance, and commercial mortgage-backed securities (CMBS). Also, the unprecedented widening of spreads for these securities rendered new issuance uneconomical, and the shutdown of the securitization market threatened to exacerbate the downturn in the economy.

On November 25, 2008, the Federal Reserve (the Fed) …

The Money Market Investor Funding Facility (U.S. Gfc), Rosalind Z. Wiggins

Journal of Financial Crises

In mid-September 2008, money market mutual funds (MMMFs) began to experience run-like redemption requests after the Reserve Primary Fund “broke the buck.” As a result, MMMFs became reluctant to roll over or invest in commercial paper (CP) and faced the prospect of selling asset-backed commercial paper (ABCP) they held into a declining market to raise cash. The money markets quickly became negatively impacted, and on October 21, 2008, the Fed announced the Money Market Investor Funding Facility (MMIFF), which would loan funds to a series of special purpose vehicles (SPVs) established by the private sector. The SPVs would use the …

The Commercial Paper Funding Facility (U.S. Gfc), Rosalind Z. Wiggins

Journal of Financial Crises

In mid-September 2008, prime money market mutual funds (MMMFs) began experiencing run-like redemption requests sparked by one fund that had “broken the buck” because of large exposure to Lehman Brothers commercial paper (CP). As a result, MMMFs, which are significant investors in CP, became reluctant to hold CP. Within a week, outstanding CP had been reduced by roughly $300 billion. The CP market experienced severe shortening of maturities and increased rates, making it difficult for issuers to place new paper. When government efforts to assist the MMMFs did not resolve the stresses in the CP market, the Federal Reserve announced, …

The Primary Dealer Credit Facility (Pdcf) (U.S. Gfc), Karen Yang

Journal of Financial Crises

On March 16, 2008, the Federal Reserve created the Primary Dealer Credit Facility, or PDCF, to provide overnight funding to primary dealers in the tri-party repurchase agreement (repo) market, where lenders had become increasingly risk averse. Loans were fully secured by (initially) investment-grade securities and offered at the primary credit rate by the Federal Reserve Bank of New York. The eligible collateral was significantly expanded in September 2008, after rumors of Lehman Brothers potentially filing for bankruptcy, to include all of the types of instruments that could be pledged at the two major tri-party repo clearing banks. The PDCF was …

The Federal Reserve’S Response To The 1987 Market Crash (U.S. Historical), Kaleb B. Nygaard

Journal of Financial Crises

The S&P 500 lost 10% the week ending Friday, October 16, 1987, and lost an additional 20% the following Monday, October 19, 1987. The date would be remembered as Black Monday. The Federal Reserve (the Fed) responded to the crash in four distinct ways: (1) issuing a public statement promising to provide liquidity, as needed, “to support the economic and financial system”; (2) providing support to the Treasury securities market by injecting in-high-demand maturities into the market via reverse repurchase agreements; (3) allowing the federal funds rate to fall from 7.5% to 7.0% and below; and (4) intervening directly to …

Introduction To The Special Issue On The Economics Of Religion, Jared Rubin

Economics Faculty Articles and Research

"The economics and political science of religion have blossomed into full-fledged fields in the last decade and a half. What was once a field on the far outskirts of economics and political science now regularly publishes in its top journals (see Figure 1).¹ By 1998, the field was large enough for Iannaccone (1998) to write a survey of the shape of the field. The field was very much at its infancy at that time, and most of the best work was done by sociologists and/or published in sociology journals. This has changed significantly in the 22 years since Iannaccone's …

Friedrich Hayek On Monetary And Banking Systems Reforms, Adrian Ravier

Journal of New Finance

Throughout his life, Friedrich Hayek worked towards prescribing a monetary policy under which the world economy would again enjoy the stability it had known under the classical international gold standard system. This paper presents three banking and monetary systems that were pivotal in the history of banking and closely scrutinized by Hayek. The paper outlines those systems, summarizes Hayek’s comments on each and then discusses the recent literature on the subject in the light of Hayek’s influence.

English Chocolate, Ghanaian Cocoa, Ryan Minor

History in the Making

No abstract provided.

Lessons Learned: A Conversation With Paul A. Volcker, Andrew Metrick, Rosalind Z. Wiggins, Kaleb B. Nygaard

Journal of Financial Crises

On March 26, 2019, Andrew Metrick, the Janet Yellen Professor of Finance at the Yale School of Management and Founder and Director of the Yale Program on Financial Stabilitysat down with Paul A. Volcker to discuss his perspectives on the Federal Reserve, central banking autonomy, “too big to fail,” and how his perspectives on these topics have changed over the decades.It turned out to be one of the last interviews given by the former Chairman of the Federal Reserve System who passed away on December 8, 2019, at the age of 92.

The Federal Reserve’S Financial Crisis Response E: The Term Asset-Backed Securities Loan Facility, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

Securitization is a process that allows banks and other lenders to package loans and sell them as bonds called asset-backed securities (ABS), removing them from their balance sheets and immediately generating cash for new loans. ABS are an important component of the financing cycle for many types of loans to households and small businesses, including mortgages. In the fall of 2008, financial markets began experiencing disturbances as the effects of the U.S. subprime market meltdown spread. The ABS market froze decreasing the volume of new loans to households and small businesses. The Federal Reserve became very concerned about the potential …

The Federal Reserve’S Financial Crisis Response D: Commercial Paper Market Facilities, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

During the summer of 2007, the U.S. residential mortgage market began to decline sharply negatively impacting the asset-backed commercial paper (ABCP) market, which often relied on mortgages as underlying support. Money Market Mutual Funds (MMMFs), significant investors in commercial paper (CP), quickly retreated from the market, causing a substantial decline in outstanding ABCP. In September 2008, pressures on the markets severely escalated again, when the Reserve Primary Fund MMMF “broke the buck” and prompted run-like redemption requests by many MMMF investors. These disruptions resulted in higher rates and shorter maturities, practically freezing the market for term CP. Concerned about the …

The Federal Reserve’S Financial Crisis Response C: Providing U.S. Dollars To Foreign Central Banks, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

The financial crisis that began in late 2007 with the decline in the United States (U.S.) subprime mortgage markets quickly spread to other markets and eventually disrupted the interbank funding markets in the U.S. as well as overseas. To address the strain in the U.S. dollar (USD) funding markets, the Federal Reserve worked with foreign central banks around the world to provide USD liquidity to affected overseas markets by entering into currency swap agreements. Following the bankruptcy of Lehman Brothers in September 2008, and the resulting further destabilization of the world’s financial systems, the size and utilization of these swaps …

The Federal Reserve’S Financial Crisis Response B: Lending & Credit Programs For Primary Dealers, Rosalind Z. Wiggins, Patricia C. Mosser, Andrew Metrick

Journal of Financial Crises

Beginning in the summer 2007 the Federal Reserve (the Fed) deployed numerous conventional and innovative programs to address the credit crisis occurring in the wholesale lending markets that was beginning to affect the broader financial markets and threaten the economy at large. Two of those programs, the Term Securities Lending Facility (TSLF) and the Primary Dealer Credit Facility (PDCF) were aimed at providing liquidity to primary dealers and required the Fed to rely on its authority under Section 13(3) of the Federal Reserve Act. Section 13(3) is a Depression Era amendment that permits the Fed expanded powers in “unusual and …

The Federal Reserve’S Financial Crisis Response A: Lending & Credit Programs For Depository Institutions, Rosalind Z. Wiggins, Andrew Metrick

Journal of Financial Crises

Beginning in summer 2007, the Federal Reserve (the Fed) was called upon to address a severe disruption in the interbank lending markets sparked by a downturn in the subprime mortgage market. As these developments began to impact the ability of banks to raise adequate funding, the Fed encouraged them to utilize the Discount Window (DW), its standing facility for lending to depository institutions, and repeatedly decreased the lending rate to make the facility more accessible. Despite the Fed’s efforts, for a number of reasons, including historical perceptions of stigma, banks were reluctant to utilize the DW. In December 2007, the …

Working Paper No. 49, On Joseph Schumpeter And Economic Development, Serene Mistkawi

Working Papers in Economics

In his writings Joseph Schumpeter stresses the important role played by the entrepreneur, serving as the agent bringing about change and contributing dynamic activities to an economy. Also, Schumpeter views capitalism as an evolving system, with his entrepreneur contributing to this evolution. Schumpeter also stresses the importance of innovation for enabling an entrepreneur to earn and accumulate profits. Related to innovation, Schumpeter’s entrepreneur can help bring about a “creative destruction.” This is thought to take place as outmoded businesses fail and their productive assets are bought up and creatively reorganized and brought back into production. In this manner, Schumpeter’s entrepreneur …

Working Paper No. 44, The Evolution Of The Landlord, Jaye Balentine

Working Papers in Economics

This inquiry seeks to establish that the meaning of the term ‘the landlord’ has evolved over the course of history. In this sense, this inquiry contributes not only to the disciplines of History and Politics, but also to the field of the History of Economic Thought and the subfield of Evolutionary-Institutional Economics, carrying on the tradition established by Thorstein Veblen. A pervasive and dominant institution during the feudal era, the landlord has since evolved considerably, shifting away from the position of a predominantly political institution into a more economically oriented, capitalist institution. As a figure and agent operating within societies, …

“The Speechmaking Of A Girl-Orator”: Reason, Gender, And Authority In Dorothy Hunter’S Free Trade Oratory, Erinn Elizabeth Campbell

Honors Projects

Dorothy M. Hunter (1881-1977) rose to prominence during the 1906 United Kingdom general election as a markedly “girlish” yet widely respected free trade orator. While men on the Edwardian public political platform typically built a reputation for oratorical prowess through theatrical displays of “heroic” masculinity, Hunter established her authority as a speaker through two very different (and apparently contradictory) strategies. Her performance of “charming” middle-class femininity helped demonstrate her right to speak on free trade as a “women’s question,” extending women’s traditional authority over matters of domestic consumption to include questions of political economy. Trusting in the power of education …

Red Sea, White Tides, And Blue Horizons, John P. Devine

Dissertations, Theses, and Capstone Projects

Eric Hobsbawm, in his effort to explain the fundamental divide which produced the Second World War, convincingly argues that “the crucial lines in this civil war were not drawn between capitalism as such and communist social revolution, but between ideological families: on the one hand the descendants of the eighteenth-century Enlightenment and the great revolutions including, obviously the Russian revolution’, on the other hand, its opponents.” This thesis argues that the American Civil War was a “great revolution” that represented a crucial transformative point in the formation of these two waring factions. The struggle was especially influential on the theory …

Minimum Wages In China: Evolution, Legislation, And Effects, Shi Li, Carl Lin

Faculty Books

This book considers the positive and negative impacts of the minimum wage policy in China. Since China enacted its first minimum wage law in 1994, the magnitude and frequency of changes in the minimum wage have been substantial, both over time and across jurisdictions. The results from China’s experience show that rapidly increasing minimum wages have helped increase average wages and reduce the gender wage gap, income inequality, and poverty. However, the fast-rising minimum wage has also resulted in the loss of employment for young adults, women, low-skilled workers, and migrant workers. Additionally, higher minimum wages have a negative impact …

Hyman Minsky: An Advocate Of Big Government, Juan Ramon Rallo

Journal of New Finance

In The End of Laissez Faire (1926) and in The General Theory of Employment, Interest and Money (1936), Keynes advocated a new model of the State which put an end to the laissez faire and leave to the Government the task of reaching macroeconomic stability through monetary, fiscal and even demographic control of investment. One of the most original and modern thinkers within this Keynesian tradition in defense of “Big Government” was the post-keynesian economist Hyman Minsky. The Great Recession has revived and reinvigorated the minskyian positions up to the point of becoming a “required reading” especially for central bankers …

All Hail The Market: Immigration And Economics In A Post-Cold War Western Hemisphere, Jorge Ambriz

Master's Theses

The end of the Cold War lifted the United States to the role of the sole economic superpower, and an opportune moment to address hemispheric issues was presented to Washington policymakers. By the end of the 1980s, hemispheric forced migration was on the rise, with a large portion of those forced to flee from Central America. This moment coincided with the decade characterized by an increasingly connected world, where globalization in the form of economic linkages were being proposed in the Summit of the Americas, hemispheric meetings that began in the 1990s in hopes of addressing hemispheric issues. While the …

Income Inequality In America: Conclusions From 100 Years Of Income Tax Data And Cross-Country Comparisons, Noriel Campos

Master's Theses

In 1913, taxation of income was permanently introduced in the United States. Other similarly developed countries soon followed suit. From there, income inequality in the United States dropped significantly, and the decline in Europe was even more dramatic. First, this paper considers the changes over time of the share of national income gained by the top 1% of income earners in seven countries going back to World War Two. A second analysis considers the impact that tax policy may have had on the share of income accruing to the top 1% of U.S. income earners between 1980 and 2014, a …

Innovation Dynamics Of Cultural Production: Evidence In Rap Lyrics, James M. Zumel Dumlao, Junjie Lei, Emeka Nwosu, Li Yu Oon, Tsai Ling Jeffrey Wong, James Rising, Jesse Anttila-Hughes

Master's Theses

Culture is a driving force in organizing the structure of societies, and is conjoined with economic development. However, quantifying the impact of culture is difficult. Culture manifests itself in cultural production, through art, performance, music, etc. Innovation and influence in cultural production industries partially determines product quality. Using techniques from the “digitized humanities”, we agnostically identify informational distance to describe the spatiotemporal dynamics of innovation and influence in Rap music lyrics. Rap emphasizes lyricism and hometown pride more than other genres of popular music, and is interesting as a globally impactful manifestation of the racially segregated labor market in the …

How Socialism Failed Venezuela, Ben Abrahamson

Political Science Theses and Capstones

In the 1970s, Venezuela was considered one of the wealthiest nations in the world. They enjoyed high oil prices after the discovery of OPEC, they were a democratized country in a continent where most of it was still undeveloped. Unfortunately, in the 1980s a major cut in oil prices caused economic turmoil, and leading into the 90s there were bloody riots, political disparity, attempted coups and building poverty. In 1998 came Hugo Chavez, a newly elected president to rid their economic issues and end corruption. However, that all turned out to be the opposite of what he did. The country …

"A Glass Of Milk Strengthens A Nation." Law Development, And China's Dairy Tale, Xiaoqian Hu

Journal of Food Law & Policy

Historically, China was a soybean nation and not a dairy nation. Today, China has become the world’s largest dairy importer and third largest dairy producer, and dairy has surpassed soybeans in both consumption volume and sales revenue. This article investigates the legal, political, and socioeconomic factors that drove this transformation, and building upon fieldwork in two Chinese counties, examines the transformation’s socioeconomic impact on China’s several hundred million farmers and ex-farmers and political impact on the Chinese regime. The article makes two arguments. First, despite changes of times and political regimes, China’s dairy tale is a tale about chasing the …

Milk And The Motherland? Colonial Legacies Of Taste And The Law In The Anglophone Caribbean, Merisa S. Thompson

Journal of Food Law & Policy

This paper tells a story of the relationship between colonialism and capitalism through the lens of “milk” and “the law” in the Caribbean. Despite high levels of lactose intolerance amongst its population, milk is a regular part of many Caribbean diets and features prominently in its foodscapes. This represents a distinctive colonial inheritance that is the result of centuries of ongoing colonial violence and displacement. Taking a feminist and intersectional approach, the paper draws on analysis of key pieces of colonial legislation at significant historical junctures and secondary literature to do three things. Firstly, it examines how law aided the …

Incentivized Learning And Libraries: A Comparative Study Of Summer Reading Programs In Connecticut, Andrew Morrison

Honors Scholar Theses

With digital forms of entertainment and media more inescapable than ever, it has become increasingly difficult to encourage children and teens to read. Simultaneously, despite an overwhelming amount of literature demonstrating the educational benefits of reading, especially as a necessity in the summer between academic years, library budgets are shrinking as federal funding nears its end. How do libraries promote summer reading amidst declining interest and decreased funding? Using data from public libraries across Connecticut, this paper investigates how libraries are adapting their children's summer reading programs to a changing landscape, how programs are designed to incentivize reading without eliminating …

Crop Yield And Democracy, James B. Ang, Per G. Fredriksson, Satyendra Kumar Gupta

Faculty and Staff Scholarship

How does the historical legacy of agriculture affect democratic traditions in contemporary societies? This paper provides empirical evidence that inherent crop yield and democracy exhibit an inverted U-shaped relationship. This finding is supported by cross-country data from up to 147 countries, 186 pre-colonial societies, and the U.S. states. The relationship thus exhibits a highly persistent pattern. Crop yield is measured by kilocalories per hectare per year under rain-fed conditions, which has the advantage of being highly exogenous. The hump-shaped relationship holds up to a battery of robustness tests.

Technology In Major League Baseball: 2017 Houston Astros, Prisoner’S Dilemma, And Behavioral Solutions, Spencer Kinyon

Honors Scholar Theses

This paper compares and contrasts the economic model for baseball in the 20th century without technology and the economic model for baseball in the 21st century with technology. Major League Baseball (MLB) teams have evolved to use technology to improve the performance of players on the field. This paper explores the economics of penalties in MLB and how teams are penalized for their use of illegal technology. In the 2017 season, the Houston Astros used illegal technology that led the team to win the World Series. This paper provides a cost-benefit analysis to determine whether or not a team should …