Economic History Commons^™

Indonesia: Blanket Guarantee, 1998, Ayodeji George

Journal of Financial Crises

The Indonesian government closed 16 banks on November 1, 1997. At the time, the government said it would guarantee depositors up to 20 million Indonesian rupiah (IDR; USD 6,000) per account. The lack of immediate full protection for large depositors caused deposit runs throughout the banking sector and undermined foreign confidence in the Indonesian financial system. In response, the Indonesian president on January 26, 1998, announced a blanket guarantee and created the Indonesian Bank Restructuring Agency (IBRA) to administer the guarantee and other bank rehabilitation efforts. The blanket guarantee covered all depositors and nonsubordinated creditors in locally incorporated commercial banks. …

Ecuador: Blanket Guarantee, 1998, Bailey Decker

Journal of Financial Crises

After a series of exogenous shocks hit the Ecuadorian economy in 1997–1998, foreign creditors reassessed their emerging-market risk and reduced external credit lines to Ecuador, thus draining liquidity. The closure of a small bank called Solbanco in April 1998 triggered deposit runs at other banks. Banks sought assistance from the Central Bank of Ecuador (Banco Central del Ecuador, or BCE). By the end of September 1998, the BCE had issued emergency loans to 11 financial institutions, totaling nearly 30% of the money base. The crisis accelerated in August 1998 when Banco de Prestamos, the sixth-largest bank, was closed; the existing …

Finland: Government Guarantee Fund, Blanket Guarantee, 1992, Anmol Makhija

Journal of Financial Crises

Following a period of rapid financial liberalization and a record credit boom in the 1980s, Finland’s financial system suffered steadily increasing loan losses and falling earnings beginning in 1990. The Finnish Parliament created the Government Guarantee Fund (GGF) in April 1992 to support banks with loans, capital, and guarantees. In a press release issued on August 6, 1992, the government said the GGF would “secure the stable functioning of the banking system under any circumstances [emphasis added]”. Six months later, the Parliament of Finland specifically required the GGF to guarantee that all Finnish banks could meet their commitments. The government …

Denmark: General Guarantee Scheme, 2008, Benjamin Hoffner

Journal of Financial Crises

As foreign credit in Denmark dried up during the summer of 2008, Danish banks became increasingly reliant on short-term borrowing. The government took over the failing Roskilde Bank, the country’s eighth-largest bank, in late August. On October 5, 2008, the government announced a voluntary General Guarantee Scheme to fully insure deposits and other senior liabilities of participating banks. Banks could participate in the scheme by becoming members of the financial sector’s banking consortium, Det Private Beredskab, or in English, the Private Contingency Association (PCA), before October 13, 2008. The General Guarantee Scheme fully insured all depositors and senior unsecured creditors …

Reserve Requirements Survey, June Rhee, Carey K. Mott, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

Banks have a private motive to hold some level of cash and liquid reserves, but the negative externalities of bank runs create a public interest in setting a regulatory level higher than the privately optimal level. We can think of such reserve requirements (RRs) as the original form of liquidity regulation. In this paper, we focus on 14 cases in which central banks adjusted RRs after crises hit, typically to deal with liquidity shortages in the banking system. We observe that RR adjustments have several advantages in a crisis: (1) such changes require little process, and the change for banks …

Blanket Guarantees Survey, Christian M. Mcnamara, Carey K. Mott, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper surveys 10 blanket guarantee (BG) programs across 13 Key Design Decisions. The defining characteristics of these programs in terms of their inclusion in our BG series are (a) that they guaranteed a broader range of liabilities beyond deposit accounts and (b) that the guarantees covered existing liabilities in addition to newly issued ones. Each case represents an effort to eliminate creditors’ incentive to withdraw funding from institutions by guaranteeing that the funding will be paid back even if the institutions are unable to do so themselves. The main themes that emerge are: (a) the inability of blanket guarantees …

Fire Sales, The Lolr, And Bank Runs With Continuous Asset Liquidity, Ulrich Bindseil, Edoardo Lanari

Journal of Financial Crises

Banks’ asset fire sales and recourse to central bank credit are modeled with continuous asset liquidity, allowing us to derive the liability structure of a bank. Both asset sales liquidity and the central bank collateral framework are modeled as power functions within the unit interval. Funding stability is captured as a strategic bank run game in pure strategies between depositors. Fire sale liquidity and the central bank collateral framework determine jointly the ability of the banking system to deliver maturity transformation without endangering financial stability. The model also explains why banks tend to use the least liquid eligible collateral with …

The Federal Reserve System: Diversity And Governance, Kaleb Nygaard, Peter Conti-Brown

Journal of Financial Crises

A growing chorus has called on the Federal Reserve System to diversify its ranks at all levels to reflect better the heterogeneity of the United States. So far, most of these efforts speak to the diversity of the Fed’s principals, namely, the members of the Fed’s Board of Governors and the presidents of the 12 Federal Reserve Banks, who together form the Federal Open Market Committee. In this study, we look instead at a vital part of Federal Reserve governance that has so far not received the same sustained attention: the directors of the Federal Reserve Banks, those private citizens …

Unwilling Gamblers And Loaded Dice: Considering Recession And Crisis As A Natural Effect Of Financial Capitalism, Darlene N. Moorman

The Downtown Review: An Interdisciplinary Journal Written and Peer-Reviewed by Mandel Honors College Students at Cleveland State University

Under financial capitalism, ordinary people are increasingly becoming 'unwilling gamblers' of a risky and unstable system. This paper explores the social and institutional change behind the neoliberal movement and considers how the politics and policies of neoliberalism have contributed to a certain environment of financial instability. Looking at the changing nature of the economy, the rapid expansion of the financial sector, and the persisting issue of moral hazard underlying risky and speculative behaviors among other items, reveals a financial system in which recessions and crises can be considered a natural, although not inevitable, effect.

Working Paper No. 63, On Karl Polanyi And His Conception Of Fascism, Serene Mistkawi

Working Papers in Economics

This inquiry seeks to establish that the writings of author Karl Polanyi offered insights into key variables and historical conditions that gave rise to the system we know of as “fascism.” Integral to his insights, Polanyi describes economic conditions attendant for fascism to emerge, with one condition noted as widespread and persistent unemployment. Polanyi stresses that fascism needs to be understood as reactionary, a responding to features integral to classical liberalism. Considering a broad historical context Polanyi teaches us of the political conditions necessary for fascism to emerge and take form as political movements wielding power. He considers conflicts in …

Working Paper No. 73, “Placing-Out”: Dealing With Vagrant Children In 19th Century America, Josephine Cannistra

Working Papers in Economics

This inquiry seeks to convince the reader that motivations of 19th century aid societies were not necessarily rooted in the welfare of vagrant children, but rather in the goals of bolstering American agriculture and creating a new generation of farmers out of children that likely would have otherwise proved a direct social and economic burden. While apprenticeships have a long history in the United States, the joining of apprenticeships and indentured labor formed a 19th century system of placing children out into rural homes as contracted workers. This system, as social movement from above, offered economic benefits to farmers and …

Working Paper No. 67, Insights Into Project Cybersyn, Leah Herrera

Working Papers in Economics

This inquiry seeks to establish that back in the 1970s Chile’s “Project Cybersyn” offered novel approaches and specific technologies that appeared to have benefitted capitalism as a system. The Spanish name, SYNCO served as an acronym for Sistema de Información y Control. President Salvador Allende expected that the attributes associated with Project Cybersyn could assist his efforts in implementing his variant of socialism. Cybersyn consisted of a network (Cybernet), software (Cyberstride), computers, a economic simulator known as CHECO, and a control room (Opsroom.) Cybersyn reached an advanced prototype stage; however, its fate was also tied to the interests of the …

Working Paper No. 69, Towards An Evolutionary History Of Gleaning, Stella Burlingame

Working Papers in Economics

This inquiry seeks to establish that the act of gleaning can be understood through an evolutionary approach. Because gleaning has been practiced in some form in almost every agricultural system, this inquiry shall consider several different regions and time periods, taking into account the distinct economic and social structures. The segments of history to be explored here range from antiquity, as documented in Scripture, through early modernity, and into the post-modern era.

Working Paper No. 70, Industrialization, Retail Activities, And The Rise Of American Consumerism, Joseph French

Working Papers in Economics

This inquiry seeks to establish that the department store can be viewed as a novel institution that emerged to facilitate an economic relationship between a burgeoning American industrial sector and a new generation of working-class consumers with rising incomes and changing needs. The development of retail in America lagged behind Europe for many decades, until the rapid pace of American industrialization acted as a catalyst for retail to evolve into a modern institution. Alongside the creation of the department store, American cities were taking to the skies, and those who inhabited them would establish a new socio-economic class that was …

Working Paper No. 71, Max Weber: On Religion And Economic Outcomes, Celeste Aiu Taber

Working Papers in Economics

This inquiry seeks to establish that early sociologist Max Weber advances a view that religious faith could indeed affect economic outcomes. In his analysis of Reformed faiths, Weber determines that “the calling” inspired by Martin Luther transformed the work ethic of believers, instilling in them a spirit suitable for the advancement of modern capitalism. The Reformed work ethic observed by Weber served as a basis for individual Protestants to accumulate wealth. Weber also considers the developments of religious asceticism among the faiths of Calvinism, Pietism, Methodism, and the Baptist movements. The ascetic character of these religious communities assisted in generating …

Working Paper No. 72, The 1849 Gold Rush And The Roots Of California’S Economic Development, Matthew Phan

Working Papers in Economics

The Californian Gold Rush, commonly referred to as the “1849 Gold Rush” proved to be a major event which brought significant change to California. This inquiry seeks to establish that this 1849 Gold Rush provided a foundation for a broadly shared prosperity through contributing to the advancement of California’s industry. The first part in this inquiry goes into some detail regarding how the gold rush got initiated, would become a major event for the world. The second part explores what changes the gold rush had brought for California’s industry, economic development, and broadly shared prosperity. The third part explains more …

Working Paper No. 68, Variables Precipitating The Extermination Of The American Bison, Cameron Winterer

Working Papers in Economics

This inquiry seeks to establish that innovations in tanning technology advanced by Europeans in the late 19th century accelerated the destruction of the bison, and subsequently the downfall of bison-reliant indigenous groups of the Great Plains, especially. The North American bison is considered as a crucial natural resource in the plains region of North America. What this inquiry seeks to emphasize is that advancements in technology, coupled with a growing demand for bison hides, contributed to the demise of bison populations. Lastly, this inquiry seeks to examine the near extinction of the plains bison and some of the effects their …

Working Paper No. 74, Some Influential Effects Of The Typewriter On The American Economy, Bander Qadan

Working Papers in Economics

This inquiry seeks to establish that the introduction of the typewriter generated effects upon the American economy by promoting productivity increases, enhancing communications, and improving management. In addition, this inquiry seeks to illustrate how the typewriter affected American businesses by providing efficiency in time management and documents’ production. Furthermore, this inquiry shall showcase how the typewriter affected women’s work in the American economy, especially with respect to inclusivity within the workplace as well as the enhancement of communications. Additionally, this inquiry shall analyze how the development of the QWERTY keyboard and its related “lock-in” generated effects on the American economy.

The Future Of Our Economy - Part I, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

The future of any economy is closely linked with its present and the past. Pakistan’s economic past has gone through different phases with impressive growth and poverty reduction in the 1960s, 1980s, 2000-2007 and 2014-16, and 2020-22. The immediate precarious situation where both consumer and business confidence are at the lowest ebb, international ratings and market sentiment are negative and foreign exchange constraints are binding, if projected into the future and discounting the past, may result in an extremely dismal outlook. Should the present assumptions be carried forward as they are? Would these circumstances – both external and internal – …

The Limits Of Financial Equity: The Federal Reserve, The Depression Of 1921, And The End Of Wilsonian Progressivism, Terril Hebert

LSU Master's Theses

The Limits of Financial Equity: The Federal Reserve, the Depression of 1921, and the End of Wilsonian Progressivism is an examination of monetary policy and centralized macroeconomic planning in the American economy during the inflationary spiral of the 1910s that culminated in the Depression of 1921. Put forward for consideration is the successful populist campaign for agricultural credit equity by the burgeoning Federal Reserve System; set against a backdrop of intentional inflation, world and domestic citizens competed against as the price and supply chain distortions perpetuated by the policing of American commerce by the Food Administration, A. Mitchell Palmer’s Department …

While Waiting For Rain: Community, Economy, And Law In A Time Of Change, John Henry Schlegel

Books

What might a sensible community choose to do if its economy has fallen apart and becoming a ghost town is not an acceptable option? Unfortunately, answers to this question have long been measured against an implicit standard: the postwar economy of the 1950s. After showing why that economy provides an implausible standard—made possible by the lack of economic competition from the European and Asian countries, winners or losers, touched by the war—John Henry Schlegel attempts to answer the question of what to do.

While Waiting for Rain first examines the economic history of the United States as well as that …

India’S Economy At 75 : Part Iii, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

Despite impressive achievements since 1991, India is facing several major challenges. A major problem is absorbing its youth in a productive labour force and finding gainful employment for them. Half of its population is under the age of 25. Only 35 per cent of the working age population has a job while 12 million new entrants would enter the labour force every year. The past record in labour absorption, despite impressive economic growth, has not been stellar. The great divide between the organized and unorganized parts of the economy is growing. Ninety per cent of the jobs are in the …

India’S Economy At 75 : Part Ii, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

India’s success factors may be many but three salient features need emphasis. First, Indian entrepreneurs are dynamic, vibrant and innovative. They even used the socialist economy regime of control and license raj for ‘learning by doing’. Just to give an example, India had a ramshackle automobile industry dominated by two outdated models until the 1990s. The suppliers, engineers, vendors, parts manufacturers did acquire the techniques of supply chain management, production and distribution under most adverse circumstances. When the economy did open up in the post-1991 period and the private sector allowed to set up manufacturing industries without prior approvals, among …

Free Market: The History Of An Idea. By Jacob Soll. Basic Books, 2022. 326 Pp, Index. $32., James K. Galbraith

Emancipations: A Journal of Critical Social Analysis

Review of Free Market: The History of an Idea. Jacob Soll. New York, Basic Books, 2022. 326 pp.

The Euro And Bumps In The Road: Historical Patterns Of Nonresident Holdings In Eurozone Bonds, 1980–2018, Michael H. Scarlatos

Dissertations, Theses, and Capstone Projects

A developed bond market which attracts nonresident investors both enables and reflects a host currency’s transition from domestic to international status. My analysis of historical private nonresident holdings of Eurozone portfolio debt securities spanning the euro’s 1999 creation and its subsequent 2008 crisis reveals diverging patterns.

This analysis, complemented by coefficient stability tests, discovers that the conversion of national currencies to the euro was reflected by a pickup in nonresident holdings of bonds issued by countries adopting the euro, especially those of the periphery (Portugal, Ireland, Italy and Spain) relative to the core (Germany, Austria, Belgium, Finland, France, and the …

India’S Economy At 75 : Part I, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

India was considered by its colonial rulers as the brightest jewel in the British crown as it was relatively well-endowed in terms of natural and human resources, physical infrastructure, and entrepreneurship. India’s social and economic indicators at the time of independence were similar to those in the countries of Southeast Asia and China in terms of level of poverty, illiteracy, and health status. When independence was achieved, continuity with the past was least disrupted as the majority of the experienced civil servants who administered British India opted to serve the newly independent country. Another advantage was that the political party …

Seventy-Five Years Of Pakistan’S Economy, Ishrat Husain Dr.

Faculty Research - Newspaper and Magazine Articles

A large majority of Pakistan’s population was born after the country got its independence. The median age today is 23 years and the youth have only experienced economic difficulties and hardships in their lifetime. They are hardly aware of the glory days of Pakistan. Despite the many articles that have appeared on this subject, it is essential to make them aware of the historical context in which they are today leading their lives. At the time of independence, the prospects of the economic survival of a ramped Pakistan appeared quite dim as it inherited an extremely weak and fragile economy. …

From ‘Homo Economicus’ To ‘Homo Culturalis’: Review Of Irrationally Rational By V. Raghunathan, Milind M. Shrikhande

Markets, Globalization & Development Review

No abstract provided.

Medicaid Expansion: Changes In Individual Health Outcomes, Julie Norman

All Graduate Plan B and other Reports, Spring 1920 to Spring 2023

The Affordable Care Act is one of the biggest changes in the American healthcare system in the 21st century. One element of the ACA is medicaid expansion, which opened up federal funding for states to cover any individual earning below 138% of the federal poverty line. 21 states expanded medicaid in 2014 while 12 haven’t expanded. This paper utilizes the disparity for a natural experiment to determine the efficacy of the program. Outcome variables of interest include measurements of individual health, health access and utilization, and premature death rates. The results indicate positive, but small improvements due to the policy, …

Working Paper No. 54, Nicholas Georgescu-Roegen And Ecological Economics, Miriam Silverman

Working Papers in Economics

This inquiry seeks to establish that in his book The Entropy Law and the Economic Process [1971] (2013), author Nicholas Georgescu-Roegen provides a foundation for Ecological Economics. The Entropy Law implies that the economic process is limited because it is reliant on finite natural resources, e.g., fossil fuels and minerals, as the economic process involves relying upon low-entropy natural resources in the production of consumer goods, and then results in the discarding of high-entropy waste, e.g., heat in the form of CO₂ and other greenhouse gasses, into the environment, eventually resulting in noticeable degradation. Notably, these ideas from Georgescu-Roegen’s …