Monetary and Fiscal Policies to Remove Stagflation
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1 My Plan to Cancel Student Loan Debt on Day One of My Presidency We're Facing a Student Loan Crisis
My Plan to Cancel Student Loan Debt on Day One of My Presidency We’re facing a student loan crisis -- one that’s holding back our economy and crushing millions of American families. I have already proposed bold steps to broadly cancel student loan debt, provide universal tuition free public two- and four-year college and technical school, ban for- profit colleges from receiving federal aid, and help end racial disparities in college enrollment and resources. But the Department of Education already has broad legal authority to cancel student debt, and we can’t afford to wait for Congress to act. So I will start to use existing laws on day one of my presidency to implement my student loan debt cancellation plan that offers relief to 42 million Americans -- in addition to using all available tools to address racial disparities in higher education, crack down on for-profit institutions, and eliminate predatory lending. I spent my career studying why so many hard-working middle-class families were going broke. I discovered that they weren’t reckless or irresponsible -- they were being squeezed by an economy that forced them to take on more debt to cling to their place in America’s middle class. Student debt is no different: for decades, students have worked hard and played by the rules. They took on loans on the promise that a college education would justify their debt and provide a ticket to the middle class. But our country’s experiment with debt-financed education went terribly wrong: instead of getting ahead, millions of student loan borrowers are barely treading water. -
Uncertainty and Hyperinflation: European Inflation Dynamics After World War I
FEDERAL RESERVE BANK OF SAN FRANCISCO WORKING PAPER SERIES Uncertainty and Hyperinflation: European Inflation Dynamics after World War I Jose A. Lopez Federal Reserve Bank of San Francisco Kris James Mitchener Santa Clara University CAGE, CEPR, CES-ifo & NBER June 2018 Working Paper 2018-06 https://www.frbsf.org/economic-research/publications/working-papers/2018/06/ Suggested citation: Lopez, Jose A., Kris James Mitchener. 2018. “Uncertainty and Hyperinflation: European Inflation Dynamics after World War I,” Federal Reserve Bank of San Francisco Working Paper 2018-06. https://doi.org/10.24148/wp2018-06 The views in this paper are solely the responsibility of the authors and should not be interpreted as reflecting the views of the Federal Reserve Bank of San Francisco or the Board of Governors of the Federal Reserve System. Uncertainty and Hyperinflation: European Inflation Dynamics after World War I Jose A. Lopez Federal Reserve Bank of San Francisco Kris James Mitchener Santa Clara University CAGE, CEPR, CES-ifo & NBER* May 9, 2018 ABSTRACT. Fiscal deficits, elevated debt-to-GDP ratios, and high inflation rates suggest hyperinflation could have potentially emerged in many European countries after World War I. We demonstrate that economic policy uncertainty was instrumental in pushing a subset of European countries into hyperinflation shortly after the end of the war. Germany, Austria, Poland, and Hungary (GAPH) suffered from frequent uncertainty shocks – and correspondingly high levels of uncertainty – caused by protracted political negotiations over reparations payments, the apportionment of the Austro-Hungarian debt, and border disputes. In contrast, other European countries exhibited lower levels of measured uncertainty between 1919 and 1925, allowing them more capacity with which to implement credible commitments to their fiscal and monetary policies. -
Mapping Exploitation
MAPPING EXPLOITATION Examining For-Profit Colleges as Financial Predators in Communities of Color July 2021 PROTECTBORROWERS.ORG MAPPING EXPLOITATION 2021 Table of Introduction 3 Contents Student Debt is a Crisis for Black and Latino Borrowers and Their Communities 5 For-Profit Colleges are Another Example of Firms Engaging in “Predatory Inclusion" 9 For-Profit Colleges and the Geography of Financial Predation 10 For-Profit Schools Target Communities of Color with Predatory Products That Produce Suboptimal Outcomes 13 Mapping For-Profits in the Midwest 14 Recommendations 26 Conclusion 31 Endnotes 32 2 MAPPING EXPLOITATION 2021 Introduction The country is in the midst of an unprecedented student debt crisis with 45 million borrowers collectively owing more than $1.7 trillion in student debt. Student loan borrowers have been sold the narrative that education is the key to social mobility—that it is “the great equalizer.”1 Meanwhile, the rising cost of higher education has brought with it rising levels of student debt—debt that is often excused or ignored as a personal shortcoming, the result of individual choices rather than a broad array of deep systemic failures.2 These parallel trends perpetuate the narrative that student loan borrowers are not entitled to assistance or that their distress does not merit policymakers’ attention. However, as we have seen time and time again, the vision of higher education as the key to individual opportunity and student debt as “good debt” has consistently failed to account for a host of interconnected -
The Federal Reserve System: History and Structure
Printed Page 253 [Notes/Highlighting] The Federal Reserve System: History and Structure The history of the Federal Reserve System The structure of the Federal Reserve System How the Federal Reserve has responded to major financial crises Module 26: The Federal Reserve System: H... Printed Page 253 The Federal Reserve System [Notes/Highlighting] Who’s in charge of ensuring that banks maintain enough reserves? Who decides how large the monetary base will be? The answer, in the United A central bank is an States, is an institution known as the Federal Reserve (or, informally, as institution that oversees and “the Fed”). The Federal Reserve is a central bank—an institution that regulates the banking system oversees and regulates the banking system, and controls the monetary and controls the monetary base. Other central banks include the Bank of England, the Bank of Japan, base. and the European Central Bank, or ECB. The Federal Reserve System Printed Page 253 An Overview of the Twenty-first Century [Notes/Highlighting] American Banking System Under normal circumstances, banking is a rather staid and unexciting business. Fortunately, bankers and their customers like it that way. However, there have been repeated episodes in which “sheer panic” would be the best description of banking conditions—the panic induced by a bank run and the specter of a collapse of a bank or multiple banks, leaving depositors penniless, bank shareholders wiped out, and borrowers unable to get credit. In this section, we’ll give an overview of the behavior and regulation of the American banking system over the last century. -
Incomes Policies As Tools to Promote Strong, Sustainable and Balanced Growth
UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT UNCTAD contribution to the G20 Framework Working Group BACKGROUND NOTE: IncOMES POLICIES AS TOOLS TO PROMOTE STROng, SUStaINABLE AND BALANCED GROWTH Extract from the Trade and Development Report, 2011 September 2011 UNITED NATIONS UNCTAD contribution to the G20 Framework Working Group iii Table of contents Page I. THE ROLE OF WAGES IN ECONOMIC GROWTH ................................................................................. 1 II. INCOMES POLICY AND INFLATION CONTROL ................................................................................... 5 III. THE EUROPEAN CRISIS AND THE NEED FOR PROACTIVE INCOMES POLICIES ..................... 7 References ................................................................................................................................................................... 8 Charts 1 Share of wages in national income, selected economies, 1980–2010 ................................................................ 2 2 Total wage bill and private consumption at constant prices, selected countries, 1996–2010 ............................. 4 Table 1 Real wage growth, selected regions and economies, 2001–2010 ................................................................3 UNCTAD contribution to the G20 Framework Working Group 1 BACKGROUND NOTE: INCOMES POLICIES AS TOOLS TO PROMOTE STRONG, SUStaINABLE AND BALANCED GROWTH Over the past year, the instruments available other hand, higher public-debt-to-GDP ratios have to policymakers for supporting -
Is Theworld Undergoing Afiscal/Debt Revolution?
A SYMPOSIUM OF VIEWS Is the World Undergoing A Fiscal/Debt Revolution? he need to go into debt to support the economy during the pandemic has a broad consensus of agreement. Even after adding 10–15 percent of GDP to debt levels, though, some economists are arguing that the world needs to keep expansionary fiscal policy for at least the next decade. In today’s era of ultra-low interest rates, they believe that monetary policy is pushing on Ta string. They further argue that so long as growth and interest rates are so low, fiscal stimulus is near riskless. The argument claims that it is more appropriate to compare debt stocks to the present value of future GDP or interest rate flows to GDP flows. This thinking implies, for example, that the reasoning that went into the formation of the Maastricht Treaty or various debt-reduction efforts in the United States is no lon- ger relevant for the advanced economies. Some advocates go so far as to argue that in light of dynamic scoring, borrowing to finance appropriate categories of Federal spend- ing “pays for itself” in budgetary terms based on “reasonable” assumptions. Therefore, some economies may be less constrained by fiscal limits even properly benchmarked be- cause fiscal expansions can raise GDP more than they raise debt and interest payments. Is the global economics profession truly undergoing such a revolution? Is it—like many revolutions—likely to end in tears, or something to be applauded? Or is it like China’s Premier Zhou Enlai said about the French Revolution, too soon to tell? The opinions of nearly two dozen noted experts. -
An Indicator of Credit Crunch Using Italian Business Surveys
Munich Personal RePEc Archive An Indicator of Credit Crunch using Italian Business Surveys Girardi, Alessandro and Ventura, Marco and Margani, Patrizia Parliamentary Budget Office, PBO, Rome, Italy, Italian National Institute of Statistics, ISTAT, Rome, Italy September 2018 Online at https://mpra.ub.uni-muenchen.de/88839/ MPRA Paper No. 88839, posted 14 Sep 2018 15:29 UTC An Indicator of Credit Crunch using Italian Business Surveys Alessandro Girardia,b, Patrizia Marganib, Marco Venturab a Parliamentary Budget Office, PBO, Rome, Italy b Italian National Institute of Statistics, ISTAT, Rome, Italy Abstract This paper presents a two-step procedure to derive a credit crunch indicator for the Italian manufacturing sector. Using qualitative firm-level data over the years 2008-2018, nonlinear discrete panel data techniques are first applied in order to identify the loan supply curve controlling for firm-specific observable characteristics. In the subsequent step, the variation of the estimated supply curve that cannot be explained by proxies for loan demand is interpreted as the degree of credit squeeze prevailing in the economy at a given point in time. The empirical evidence shows that credit crunch episodes are less likely to occur during periods of sustained economic growth, or when credit availability for the manufacturing sector is relatively abundant. In contrast, a tight monetary policy stance or a worsening of the quality of banking balance sheets tend to increase the likelihood of experiencing a credit squeeze. JEL: G30; G32; C23 Keywords: business survey, credit crunch, access to credit 1 1. Introduction During periods of financial distress, troubles affecting the credit system are likely to spread to the real sector, especially in countries where the banking sector is the most relevant financing channel to the business sector and/or the productive structure is predominantly based on small and medium enterprises (Ferrando et al., 2014; Berger and Udell, 2006). -
Financial Catastrophe Research & Stress Test Scenarios
Cambridge Judge Business School Centre for Risk Studies 7th Risk Summit Research Showcase Financial Catastrophe Research & Stress Test Scenarios Dr Andy Skelton Research Associate, Cambridge Centre for Risk Studies 20 June 2016 Cambridge, UK Financial Catastrophe Research 1. Catalogue of historical financial events 2. Development of stress test scenarios 3. Understanding contagion processes in financial networks (eg, interbank loans) - Network models & visualisations - Role of central banks in financial crises - Practitioner model – scoping exercise 2 Learning from History Financial systems and transaction technologies have changed But principles of credit cycles, human trust and financial interrelationships that trigger crises remain relevant 12 Historical Financial Crisis Crises occur periodically – Different causes and severities – Every 8 years on average – $0.5 Tn of lost annual economic output – 1% of global economic output Without FinCat global growth could be 4% a year instead of 3% Financial catastrophes are the single greatest economic risk for society – We need to understand them better 3 Historical Severities of Crashes – Past 200 Years US Stock Market Crashes UK Stock Market Crashes 1845 Railway Mania… 1845 Railway Mania… 1997 Asian Crisis 1997 Asian Crisis 1866 Collapse of Overend… 1866 Collapse of Overend… 1825 Latin American Crisis 1825 Latin American Crisis 1983 Latin American Debt… 1983 Latin American Debt… 1837 Cotton Crisis 1837 Cotton Crisis 1857 Railroad Mania… 1857 Railroad Mania… 1907 Knickerbocker 1907 Knickerbocker -
Replacing Humpty Dumpty
Replacing Humpty THE MAGAZINE OF INTERNATIONAL ECONOMIC POLICY 888 16th Street, N.W. Suite 740 Washington, D.C. 20006 Phone: 202-861-0791 Fax: 202-861-0790 Dumpty www.international-economy.com The new role of central bank credit targets. he Fed has a way other than open market operations to prevent economic crises— which is what it was set up to do long ago. We here present an alternative view of central bank power that has more to do with systemic effects, and with animal spirits as well. When the Fed was initially set up in 1913, in imitation of European George A. Akerlof is the central banks, direct lending by the Federal Reserve banks in Daniel E. Koshland Sr. Ttimes of crisis—in times of special need for liquidity—was Distinguished Professor thought to be its major tool. The Fed was supposed to be deal- of Economics at the ing with systemic effects—the contagion of failure from one University of California, business to another. Berkeley, and was Throughout the nineteenth century there were periodic awarded the 2001 Nobel banking panics. The depositors would literally line up in front Prize in Economics. of their bank, fearful that those ahead of them in line would be Robert J. Shiller is the Arthur M. Okun Professor the last to make their withdrawals and that the bank would then of Economics at Yale University. This article is be out of money. Such runs on banks were contagious. Word adapted from their book, that one bank had failed its obligations led depositors at other banks to line up as well. -
The Great Moderation: Causes & Condition
THE GREAT MODERATION: CAUSES & CONDITION WORKING PAPER SERIES Working Paper No. 101 March 2016 David Sutton Correspondence to: David Sutton Email: [email protected] Centre for Accounting, Governance and Taxation Research School of Accounting and Commercial Law Victoria University of Wellington PO Box 600, Wellington, NEW ZEALAND Tel: + 64 4 463 5078 Fax: + 64 4 463 5076 Website: http://www.victoria.ac.nz/sacl/cagtr/ Victoria University of Wellington P.O. Box 600, Wellington. PH: 463-5233 ext 8985 email: [email protected] The Great Moderation: Causes and conditions David Sutton The Great moderation: causes and conditions Abstract The period from 1984-2007 was marked by low and stable inflation, low output volatility, and growth above the prior historical trend across most of the developed world. This period has come to be known as the Great Moderation and has been the subject of much enquiry. Clearly, if it was the result of something we were ‘doing right’ it would be of interest to ensure we continued in the same vein. Equally, in 2011 the need to assess the causes of the Great Moderation, and its end with the Great Financial Crisis, remains. Macroeconomists have advanced a suite of potential causes of the Great Moderation, including: structural economic causes, the absence of external shocks that had been so prevalent in the 1970s, the effectiveness and competence of modern monetary policy, and (long) cyclical factors. To this point the enquiry has yielded only tentative and conflicting hypotheses about the ‘primary’ cause. This paper examines and analyses the competing hypotheses. The conclusions drawn from this analysis are that the Great Moderation was primarily the product of domestic and international financial liberalisation, with a supporting role for monetary policy. -
The Return of Stagflation?
University of Nebraska - Lincoln DigitalCommons@University of Nebraska - Lincoln Cornhusker Economics Agricultural Economics Department 4-16-2008 The Return of Stagflation? Jeffrey S. Royer University of Nebraska-Lincoln Follow this and additional works at: https://digitalcommons.unl.edu/agecon_cornhusker Part of the Agricultural and Resource Economics Commons Royer, Jeffrey S., "The Return of Stagflation?" (2008). Cornhusker Economics. 363. https://digitalcommons.unl.edu/agecon_cornhusker/363 This Article is brought to you for free and open access by the Agricultural Economics Department at DigitalCommons@University of Nebraska - Lincoln. It has been accepted for inclusion in Cornhusker Economics by an authorized administrator of DigitalCommons@University of Nebraska - Lincoln. C ORNHUSKER April 16, 2008 CONOMICS Institute of Agriculture & Natural Resources E Department of Agricultural Economics http://www.agecon.unl.edu/Cornhuskereconomics.html University of Nebraska–Lincoln Extension The Return of Stagflation? Within the past few months, there has been a Yr 4 Wks Market Report Ago Ago 4/11/08 substantial increase in the news media’s use of the term Livestock and Products, “stagflation” in reference to the future of the U.S. economy. Weekly Average Economists use stagflation to refer to a prolonged period Nebraska Slaughter Steers, characterized by both stagnation, represented by slow 35-65% Choice, Live Weight.. 98.33 89.78 88.31 economic growth and high unemployment, and inflation, Nebraska Feeder Steers, Med. & Large Frame, 550-600 lb.. 127.02 121.81 115.28 which is an increase in the general price level. Nebraska Feeder Steers, Med. & Large Frame 750-800 lb. 110.33 102.26 99.01 Stagflation was an important economic problem for Choice Boxed Beef, many countries during the 1970s. -
Understanding International Debt Crisis James R
Case Western Reserve Journal of International Law Volume 19 | Issue 1 1987 Understanding International Debt Crisis James R. Barth Michael D. Bradley Paul C. Panayotacos Follow this and additional works at: https://scholarlycommons.law.case.edu/jil Part of the International Law Commons Recommended Citation James R. Barth, Michael D. Bradley, and Paul C. Panayotacos, Understanding International Debt Crisis, 19 Case W. Res. J. Int'l L. 31 (1987) Available at: https://scholarlycommons.law.case.edu/jil/vol19/iss1/3 This Article is brought to you for free and open access by the Student Journals at Case Western Reserve University School of Law Scholarly Commons. It has been accepted for inclusion in Case Western Reserve Journal of International Law by an authorized administrator of Case Western Reserve University School of Law Scholarly Commons. Understanding International Debt Crisis by James R. Barth,* Michael D. Bradley** and Paul C. Panayotacos** INTRODUCTION I t is not unusual for borrowing and lending to take place across national borders. But when Mexico declared a moratorium on foreign debt pay- ments in August 1982 and subsequent debt servicing problems surfaced in countries such as Argentina, Brazil and Venezuela,' it became widely apparent that international debt is a mixed blessing.2 Although borrow- ing funds from abroad enables a country to obtain investment goods needed for economic growth, the inefficient use of those funds or exoge- nous shocks3 causing real interest rates to rise abruptly, oil prices to fluc- tuate widely, and commodity prices to fall sharply4 can severely limit a debtor country's ability or willingness to repay its borrowings.' Simi- * James R.