Political Economy Commons^™

Crisis And Catalonia: An Analysis On The Impact Of Crisis On The Public Opinion Of The Secessionist Movement In Catalonia, Rachel Ducker

Honors Theses

Catalonia, the autonomous region of Spain has seen an increase in secessionist sentiments in recent years. While the past inclination toward independence has been centered on economic autonomy and cultural identity, there has been a recent emphasis on political independence, particularly in the times of crisis. In this thesis. I analyze the relationship between the economic changes during the period of a crisis and the public opinion about the potential Catalan secession. Specifically, it investigates the relationships between the economic change and public sentiment during the financial crisis of 2008, the political crisis of 2017, and the pandemic crisis of …

Terrorism And Counter-Terrorism In Latin America: A Comparative Study Of Peru And Colombia, Reagan Shane

Global Tides

This paper investigates the counter-terrorism strategies employed against the Revolutionary Armed Forces of Colombia (FARC) in Colombia and the Shining Path (SL) in Peru and analyzes the effectiveness of those strategies. It begins by exploring the foundation of each organization and its respective goals, organization and tactics. Using this information, it then explores the counter-terrorism strategies employed by the government of each country in which the organizations were operating to determine the effectiveness of those strategies and how the structure of the terrorist organization might change that effectiveness. The paper concludes that military strategies have only been somewhat effective in …

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 Fannie Mae And Freddie Mac – Module E: The Housing And Economic Recovery Act Of 2008, Daniel Thompson

Journal of Financial Crises

As the U.S. housing crisis worsened in 2007, and through 2008, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) headed towards insolvency. At the same time, contractions in private securitization resulted in these two government-sponsored enterprises (GSEs) purchasing nearly half of all new mortgages. In July, the government passed the Housing and Economic Recovery Act of 2008 (HERA) to provide a more effective regulator and to address public uncertainty regarding whether the government would back the GSEs’ assets and liabilities. HERA provided Treasury and the newly formed Federal Housing Finance Agency (FHFA) …

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 E: Maiden Lane Iii, Lily S. Engbith, Devyn Jeffereis

Journal of Financial Crises

Starting in mid-2007, American International Group (AIG) faced increasing collateral calls from counterparties looking to protect their positions in credit default swap (CDS) contracts that AIG had written on residential and commercial collateralized debt obligations (CDOs) (US COP 2010, 28-30). Per these agreements, the AIG parent company was responsible for insuring the value of the CDOs against the risk of a negative credit event, such as default (GAO 2011, 5; US COP 2010, 29-30). AIG’s immediate need for liquidity on September 16, largely driven by a securities lending program and those collateral calls, prompted the Federal Reserve to lend the …

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.

Sustainable Economic Development In The Post-Covid Era In Asia And The Pacific, Yasuyuki Sawada

CBER Conference

The second day of the 1st International Conference at the CBER, IBA Karachi commenced with an opening address by the Chief Economist at the Asian Development Bank (ADB), Mr. Yasuyuki Sawada. Speaking about the outbreak of the Covid-19 virus and how it has destabilized the economic outlook and widened existing social inequalities, impacting lives and livelihoods of millions in Asia-Pacific region and beyond, Sawada remarked, “Regional GDP contracted by 0.2% in 2020 with East Asia faring much better. After a sharp contraction last year, growth in South Asia will rebound in 2021. However, the recovery will be uneven”. Dr. Sawada’s …

The Financial Facet To Sino-African Cooperation: Analyzing Potential Motivations Behind Chinese Investment In African Countries, Jacob T. Carnevale

Political Science Theses and Capstones

China’s reputation transitioned from political isolation throughout the twentieth century to international influence in the twenty-first century. We see this in the continent of Africa, especially, where multiple countries experience political and economic hardships. Today, China invests in African countries to alleviate these hardships and strengthen foreign relations. Some scholars contend that much of China’s approach to foreign direct investment (FDI) in Africa stems from China’s domestic interests, while other scholars contend it is more about relationship-building. Taking note that China does both, I ask which aspect to Sino-African relations primarily motivates Chinese lending in Africa. To analyze this question, …

Employment Trends And Poverty Status: Men And Women In The New York City Metro Area Between 2000 And 2017, Sarah Kostecki

Center for Latin American, Caribbean, and Latino Studies

Introduction:

This report examines employment trends and poverty status among men and women aged 25-54 in the New York City metropolitan area. The report assesses the characteristics of these persons, while examining trends and differences in poverty status by sex, race/ethnicity, and across the five largest Latino nationalities.

Methods:

This report uses the American Community Survey PUMS (Public Use Microdata Series) data for all years released by the Census Bureau and reorganized for public use by the Minnesota Population Center, University of Minnesota, IPUMSusa, (https://usa.ipums.org/usa/index.shtml). See Public Use Microdata Series Steven Ruggles, J. Trent Alexander, Katie Genadek, Ronald Goeken, Matthew …

Asset Classes, Nicolas L. Jacquet

Research Collection School Of Economics

This paper proposes a theory of endogenous differences in liquidity of assets based on the interaction between differences in the risk of assets and differences in liquidity needs of investors. An equilibrium of the model, which always exists and is unique, displays a class structure, where investors’ types sort themselves across different types of assets. I also provide a detailed analysis of the possible types of sorting and of the consequences for the cross-sectional properties of asset prices and their velocity. The framework can also be useful to think about what constitute a ""light-to-liquidity" and a "safe asset".

Space Exploration: Nasa Investment Into The Private Space Sector And Public Opinion, Brooke Ziegenhagen

Senior Theses

The space exploration industry has entered a new era with companies such as SpaceX and Blue Origin leading the way to the privatization of space. This paper examines public opinion regarding the source of space exploration funding and proposes possible motivations for these sentiments. This is followed by an assessment on NASA’s investment trends into the commercial space industry. Both probes review the past decade, to reveal the public-private relationship in this new era and finally, conclude whether or not public opinion plays a role in the degree of NASA investment and what that role may be.

Monetary And Fiscal Policies In The Covid-19 Crisis. Will They Work?, Daniel Lacalle

Journal of New Finance

The spread and mortality rate of the COVID-19 virus has created enormous strains on global healthcare systems and driven governments to take extreme measures to contain the virus, including the lock down of most citizens and shutting down most economic sectors. Due to these unique challenges and coming from an economy that was weak already in 2018 and 2019, the world faces a global crisis of unprecedented impact and high uncertainty about the recovery process. In this paper, we analyze how the world economy is addressing the COVID-19 pandemic. We start with the situation of the main economic regions at …

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 …