Macroeconomics Commons^™

The Macroeconomic Impacts Of Entitlements, Ateeb Akhter Shah Syed, Kaneez Fatima, Riffat Naseer

The Hilltop Review

The worries expressed by Alan Greenspan that the long run economic growth of the United States will fade away due to increasing burden of entitlements motivated us to empirically investigate the impact of entitlements of key macroeconomic variables. To examine this contemporary issue, we estimate a vector error-correction model to analyze the impact of entitlements on the price level, real output, and the long-term interest rate. The results show that a shock to entitlements leads to decrease in output and lends support to the assertion made by Alan Greenspan. Several robustness checks verify that the results remain unchanged qualitatively.

Bibliometric Review On Gold Currency And The Islamic Perspective, Muhammad Isa Mustafa, Aam Slamet Rusydiana, Muhammad Syamsul Bahri, Abdillah Arif Nasution

Library Philosophy and Practice (e-journal)

The use of gold is the beginning of the development of the monetary system in the world. The development of gold currency which has long been practiced, has undergone several evolutions from time to time. As a consequence, this evolution has implications for the development of research using gold currency. Therefore, this study aims to provide quantitative information on the development of gold currency literature. There are 917 papers in journals, books, book chapters, conference papers, and review papers indexed and indexed by the Scopus database from 1899-2021. We employed VOSViewer and Excel software to synthesize and analyze the data. …

Sales Capture Patterns Among Nebraska Counties, Eric Thompson, Spencer Cook

Business in Nebraska

Sales capture, the share of local spending power that is captured by area businesses, is an important measure of economic activity. Greater sales capture, which is typically measured using data on local taxable sales, creates multiple benefits for the economy. 1. EMPLOYMENT: Greater sales capture means more employment in retailers, wholesalers, restaurants, hotels, and other businesses subject to sales tax. 2. TAX REVENUE: Taxable sales are an important part of the tax base of many city governments. 3. QUALITY OF LIFE: Retail and hospitality (restaurants, lodging, amusement, and recreation) businesses account for a significant share of taxable sales. These industries …

Apakah Pemberdayaan Perempuan Dalam Ekonomi Dan Politik Telah Meningkatkan Ipm Perempuan Indonesia?, Abdurrahman Abdurrahman, Ema Tusianti

Jurnal Ekonomi dan Pembangunan Indonesia

Gender Development Index (GDI) shows that gender development inequality in Indonesia is still high because of lower female Human Development Index (HDI) than that of male. This research is pointed to analyse the impact of women empowerment on economy and politics to female HDI. By using multiple linear regression model and harnessing data of 514 regencies/municipalities, this research reveals that share of women on parliament, women on professional work, and women as entrepreneurs simultaneously affects women HDI in Indonesia.

Bank Assets Management Company (Bamc), Alexander Nye

Journal of Financial Crises

Slovenia weathered the initial shock of the Global Financial Crisis (GFC) of 2008 well enough to return to growth in 2010. However, non-performing loans continued mounting, banks experienced significant losses, and credit growth turned negative in a credit crunch. Slovenia entered a recession in 2011, experiencing the second largest GDP decline in the euro area. It was not certain whether Slovenia had the fiscal space to resolve these problems without requesting a Troika bailout from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF). In late 2012 the government tried to prevent such a program by …

Is Egypt On A Sustainable Path Of Debt Repayment: Evidence From Imf Framework And Fiscal Reaction Function, Maha Rashied

Theses and Dissertations

Fiscal policy is the starting point for an economy to achieve solid economic and social objectives through macroeconomic stability. Risks associated with excessive borrowing and the required fiscal adjustments are threatening especially to developing countries whose debt to GDP ratios are on the rise. Those countries’ fiscal policies’ sustainability is questioned; hence this research aims at testing for Egypt public debt sustainability and assessing the method capitalized on by the Egyptian authorities; the IMF Approach. By comparing the IMF Debt Sustainability Analysis Approach to the fiscal reaction function with ARDL and VAR as estimation methods, the results of both methods …

An Inferentially Robust Look At Two Competing Explanations For The Surge In Unauthorized Migration From Central America, Nick Santos

Dissertations

The last 8 years have seen a dramatic increase in the flow of Central American apprehensions by the U.S. Border Patrol. Explanations for this surge in apprehensions have been split between two leading hypotheses. Most academic scholars, immigrant advocates, progressive media outlets, and human rights organizations identify poverty and violence (the Poverty and Violence Hypothesis) in Central America as the primary triggers responsible. In contrast, while most government officials, conservative think tanks, and the agencies that work in the immigration and border enforcement realm admit poverty and violence may underlie some decisions to migrate, they instead blame lax U.S. immigration …

Lessons Learned: Alejandro Latorre, Maryann Haggerty

Journal of Financial Crises

At the time of the 2007-09 global financial crisis, Alejandro Latorre was an assistant vice president at the Federal Reserve Bank of New York (FRBNY). He was active in the bailout of American International Group (AIG) from its inception to the end, when AIG repaid its outstanding obligations to both the Federal Reserve and the U.S. Treasury. This Lessons Learned summary is based on a Feb. 26, 2020, interview. He emphasized that the views discussed here are his own, not the views of anyone else currently or previously within the Federal Reserve System or the views of his current employer.

Lessons Learned: Chester B. Feldberg, Maryann Haggerty

Journal of Financial Crises

Chester B. Feldberg worked for the Federal Reserve Bank of New York (FRBNY) for 36 years in a variety of roles. In the aftermath of the Global Financial Crisis, he served as a trustee for the AIG Credit Trust Facility (2009-2011). The trust was established in early 2009 to hold the equity stock of American International Group Inc. (AIG) that the U.S. government had received as a result of the 2008 AIG bailout. The three trustees were responsible for voting the stock, ensuring satisfactory corporate governance at AIG, and eventually disposing of the stock.

When he was named as a …

Lessons Learned: Eric Dinallo, Maryann Haggerty

Journal of Financial Crises

Eric Dinallo was New York State Superintendent of Insurance from January 2007 through July 2009. In New York, as throughout the United States, insurance companies are regulated at the state level. In his position as Superintendent, Dinallo oversaw the insurance operating companies of American International Group (AIG) within New York. AIG’s holding company, however, was supervised at the federal level. Much of AIG’s problems came from its non-insurance subsidiary AIG Financial Products (AIGFP), which was a major presence in the market for credit default swaps (CDS), a type of derivative that was a factor behind the 2007-09 financial crisis. This …

The Rescue Of Fannie Mae And Freddie Mac – Module Z: Overview, Rosalind Z. Wiggins, Ben Henken, Adam Kulam, Daniel Thompson, Andrew Metrick

Journal of Financial Crises

In September 2008, as the financial crisis that had begun the previous year escalated, the US government appointed a conservator for two government-sponsored enterprises (GSEs), the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac), that dominated the secondary mortgage market and were among the largest participants in the global capital markets. The conservatorships were the hallmark of a multipart rescue plan intended to save the firms from insolvency and a disorderly collapse and required the combined and coordinated efforts of several government agencies and instrumentalities. Ultimately, the government invested $191.5 billion into the …

The Rescue Of Fannie Mae And Freddie Mac–Module F: Federal Reserve’S Large-Scale Asset Purchase (Lsap) Program, Daniel Thompson, Adam Kulam

Journal of Financial Crises

By late 2008, the secondary mortgage markets were suffering high default rates, causing mortgage lending to slow and the value of mortgage securities to plummet. The Federal Reserve lowered the federal funds rate, and the government placed Fannie Mae and Freddie Mac into conservatorship, yet credit in housing and other financial markets remained tight. On November 25, the Fed announced its intent to purchase up to $500 billion in agency mortgage-backed securities (MBS) and $100 billion in agency debt to reduce the cost and increase the availability of mortgage credit, which would support housing markets and improve conditions in financial …

The Rescue Of American International Group Module Z: Overview, Rosalind Z. Wiggins, Aidan Lawson, Steven Kelly, Lily S. Engbith, Andrew Metrick

Journal of Financial Crises

In September 2008, in the midst of the broader financial crisis, the Federal Reserve Board of Governors used its emergency authority under Section 13(3) of the Federal Reserve Act to authorize the largest loan in its history, a $85 billion collateralized credit line to American International Group (AIG), a $1 trillion insurance and financial company that was experiencing severe liquidity strains. In connection with the loan, the government received an equity interest representing 79.9% of the company’s ownership. AIG continued to experience a depressed stock price, asset devaluations, and the risk of ratings downgrades leading to questions about its solvency. …

The Rescue Of American International Group Module D: Maiden Lane Ii, Lily S. Engbith, Devyn Jeffereis

Journal of Financial Crises

In September 2008, American International Group (AIG) faced increasing difficulty in returning cash collateral to counterparties looking to terminate, rather than roll over, their securities lending agreements, in part because the company had invested the collateral in residential mortgage-backed securities (RMBS), which were becoming illiquid. The Federal Reserve Bank of New York (FRBNY) provided liquidity to the company, including through the Securities Borrowing Facility (SBF), which allowed for the repayment of cash collateral but did not address the falling values of the RMBS. In November 2008, the Federal Reserve Board authorized the creation of Maiden Lane II (ML II), a …

The Rescue Of American International Group Module B: The Securities Borrowing Facility, Lily S. Engbith, Alec Buchholtz, Devyn Jeffereis

Journal of Financial Crises

In 2008, American International Group (AIG) was among the largest insurance corporations in the world and maintained a profitable securities lending program. However, AIG invested much of the cash collateral received from counterparties in residential mortgage-backed securities, whose value began to collapse rapidly and unexpectedly, creating liquidity strain for AIG when borrowers returned their securities. Because of these strains, credit downgrades, and losses, in September, the company sought assistance from the Federal Reserve which, on October 6, 2008, approved the establishment of the Securities Borrowing Facility by the Federal Reserve Bank of New York (FRBNY). The FRBNY agreed to loan …

Stress Tests And Policy, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

Ten years after the Federal Reserve’s crisis-era bank stress test, it is time to recalibrate the stress tests for “peacetime.” Outside of a crisis, supervisors should tailor stress tests to focus on their comparative advantages by taking a macroprudential focus, with severe scenarios that enable them to learn about emerging risks in both traditional and shadow banking sectors. In peacetime, also, supervisors should emphasize risk- management practices and be wary of forcing rapid changes in capital levels for individual banks, while linking stress-test results with countercyclical capital buffers across the system.

A Pandemic Of Protectionism: How Economic Isolationism Affects The Economy, Álvaro Martín

Journal of New Finance

The aim of this paper is to study the economic consequences of protectionism from a macroeconomic perspective. For that purpose, we estimate the impact of tariffs on different economic variables as GDP growth, trade volume or unemployment, comparing the effects for two groups of countries: high-income and low-income. For this, we build a regression model to estimate the effects of tariff changes on each of these variables, differentiating between the two groups of countries. Tariffs contribute to increase unemployment, generate lower economic growth and reduce trade volumes, but by how much? This is very relevant in the actual pandemic environment …

The Effects Of Imf's Lending And Conditionalities On Economic Growth: Case Of Sadc Countries, Lutete Celina Carlos

Masters Theses

I examine the impact of IMF credit use and its conditions on economic growth performance in 12 South African countries over a period of 1999-2019. The work adopts an empirical and quantitative approach to analyzing the relationship between the GDP per Capita, the use of IMF Credit, Government Final Consumption Expenditure, Net Domestic Credit and Current Account balance. These variables are the most recommended in the IMF conditionalities during the lending arrangements with SADC members. The study uses Fixed-effect approach to evaluate how the use of IMF program and the conditions imposed directly affects economic growth. A dummy variable is …

Sweden's Guarantee Scheme (Sweden Gfc), Lily S. Engbith, Kevin Kiernan

Journal of Financial Crises

Although Sweden was not as directly impacted by the Global Financial Crisis as some other economies, Lehman Brothers’ bankruptcy on September 15, 2008, prompted Swedish authorities to take preemptive measures to protect domestic banks and financial institutions. One such program, announced on October 20, 2008, and implemented on October 29, 2008, was designed to preserve credit extension to businesses and households through what became known as the Swedish Guarantee Scheme. Per the terms of the Scheme, new short- and medium-term debt of maturities ranging from 90 days to five years issued by eligible banks would be guaranteed by the Swedish …

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) …

Market Liquidity Programs: Gfc And Before, June Rhee, Greg Feldberg, Ariel Smith, Andrew Metrick

Journal of Financial Crises

The virulence of the Global Financial Crisis of 2007–09 (GFC) was explained in large part by the increased reliance of the global financial system on market-based funding and the lack of preexisting tools to address a disruption in that type of system. This paper surveys market liquidity programs (MLPs), which we define as government interventions in which the key motivation is to stabilize liquidity in a specific wholesale funding market that is under stress. Most of the MLPs surveyed in this paper were launched during and after the GFC, but two pre-GFC MLPs are included. A subsequent survey on MLPs …

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.

The Effect Of The Second-Stage Anti-Corruption Campaign On Provincial Development In China, 2015-2017, Zhenyao Yuan

Master's Theses

China had experienced long-term economic growth since the reform in 1978. With the communism system shifts in the socialist market economy, the country's legal institution and administration are facing corruption's challenge. President Xi Jinping takes action against deep corruption in China after coming to power in 2013. To observe the impact of the second stage of the anti-corruption campaign on provincial economic development since the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China in 2015 to the 19th National Congress of the Communist Party of China in 2017, this project downloads and extracts public …

Exchange Rate Regimes And Economic Growth, Amandarae Matthew

Undergraduate Theses

This paper explores the relationship between economic growth and exchange rate regimes among countries of lower income, lower middle income, upper middle income, and high-income countries. Countries must make careful consideration when choosing an exchange rate regime because each regime can have different long-term effects. A cross section pooled time series data will be used for a sample of 42 countries over the period of 2000-2018. Multiple models will examine the various relationships between types of exchange rate regimes, changes in exchange rate regimes, and economic growth. The components of the models being tested include political stability, change in terms …

Integration Of And Deliveries Among The World Zionist Organization, Israel, And Diaspora Countries: System Articulation With The Social Fabric Matrix, F. Gregory Hayden

Department of Economics: Faculty Publications

The religious economics (not economics of religion) concern here is the relationship between the World Zionist Organization (WZO) and Israel, which is known as a geopolitical power in its region and which is also known as an economic success story. Joseph Schumpeter and Karl Polanyi explained how the political economy of medieval Europe was influenced and guided by Christian morality. This paper extends the analysis of religious economics by using the social fabric matrix of original institutional economics to define and structure the integration of the WZO, Israel, and the Diaspora countries. This allows us to observe how to conduct …

Basel Iii A: Regulatory History, Christian M. Mcnamara, Thomas Piontek, Andrew Metrick

Journal of Financial Crises

From the earliest efforts to mandate the amount of capital banks must maintain, regulators have grappled with how best to accomplish this task. Until the 1980s, regulation had been based largely on discretion and judgment. In the wake of two bank failures, the central bank governors of the G10 countries established the Basel Committee on Banking Supervision (BCBS) and in 1988, the BCBS introduced a capital measurement system, Basel I. The system represented a triumph of the fixed numerical approach, however, critics worried that it was too blunt an instrument. In 1999, the BCBS issued Basel II, a proposal to …

Incorporating Macroprudential Financial Regulation Into Monetary Policy, Aaron Klein

Journal of Financial Crises

This paper proposes two insights into financial regulation and monetary policy. The first enhances understanding the relationship between them, building on the automobile metaphor that describes monetary policy: when to accelerate or brake for curves miles ahead. Enhancing the metaphor, financial markets are the transmission. In a financial crisis, markets cease to function, equivalent to a transmission shifting into neutral. This explains both monetary policy’s diminished effectiveness in stimulating the economy and why the financial crisis shock to real economic output greatly exceeded central bank forecasts.

The second insight is that both excess leverage and fundamental mispricing of asset values …

Intragovernmental Autonomous Stabilizers, Alex Williams

Theses - Graduate Programs in Economic Theory and Policy

We present a novel framework for understanding the relationship between the federal and state governments of the United States of America. Drawing on the experience of state government finances during and after the Great Recession in 2008, we propose the establishment of novel intragovernmental budgetary stabilization mechanisms. We draw out the flawed arguments of the existing fiscal federalism literature and demonstrate how the work of Michael Pettis and Modern Monetary Theory provide more usable insights when crafting public policy. We propose several potential policy responses and produce a counterfactual model of state finances after the Great Recession using the new …

Culture Of Countries And Country-Index Crash Risk, Jason Petri

Williams Honors College, Honors Research Projects

Previously crash- risk studies have focused on assessing at the firm level the likelihood of a firm’s equity to crash (a rapid decline in value), apart from the dynamics of its respective country-level market. In this study, however, I examine the determinants of an overall countrylevel equity crash apart from the dynamics of the global market. I will argue that this is a very different focus of analysis that will provide valuable information to both investors and policy makers. Expansion of credit and subsequent equity-market bubbles and crashes are of particular concern to foreign direct investors (FDI), as country-level equity …

European Banking Union C: Cross-Border Resolution–Fortis Group, Rosalind Z. Wiggins, Natalia Tente, Andrew Metrick

Journal of Financial Crises

In August 2007, Fortis Group, Belgium’s largest bank, acquired the Dutch operations of ABN AMRO, becoming the fifth largest bank in Europe. Despite its size and its significant operations in the Benelux countries, Fortis struggled to integrate ABN AMRO. Fortis’s situation worsened with the crash of the US subprime market, which impacted its subprime mortgage portfolio. By July 2008, Fortis’s CEO had stepped down, its stock had lost 70% of its value, and it was on the verge of collapse due to a severe liquidity crisis. The governments of Belgium, Luxembourg, and the Netherlands quickly came together and agreed to …