Abstract This paper studies corporate debt structure over the business cycle and its implications for aggregate macroeconomic dynamics. We develop a tractable macro-finance model featuring debt heterogeneity with both secured and unsecured debt. Unlike secured debt, unsecured debt gives the lenders no access to the borrowers' assets in the event of default, and borrowers keep their assets at the cost of losing future access to the unsecured debt market. The difference in the nature of debt contracts leads to different risk taking behavior in the two debt markets. Our model generates strongly procyclical unsecured debt and weakly procyclical secured debt, in line with the stylized facts in US data. Moreover, we show that the inclusion of heterogeneous debt structures creates additional amplification effects relative to Bernanke et al. (1999) .
{"title":"Dynamics of Secured and Unsecured Debt over the Business Cycle","authors":"Paul Luk, Tianxiao Zheng","doi":"10.2139/ssrn.3841430","DOIUrl":"https://doi.org/10.2139/ssrn.3841430","url":null,"abstract":"Abstract This paper studies corporate debt structure over the business cycle and its implications for aggregate macroeconomic dynamics. We develop a tractable macro-finance model featuring debt heterogeneity with both secured and unsecured debt. Unlike secured debt, unsecured debt gives the lenders no access to the borrowers' assets in the event of default, and borrowers keep their assets at the cost of losing future access to the unsecured debt market. The difference in the nature of debt contracts leads to different risk taking behavior in the two debt markets. Our model generates strongly procyclical unsecured debt and weakly procyclical secured debt, in line with the stylized facts in US data. Moreover, we show that the inclusion of heterogeneous debt structures creates additional amplification effects relative to Bernanke et al. (1999) .","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121485592","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies how fiscal decentralization aects local services. It exploits a 1993 reform that increased the fiscal autonomy of Italian municipalities by introducing a local property tax. The identification leverages cross-municipal variation in the degree of decentralization stemming from Allied bombings during WWII. Decentralization reduced overall spending, but expanded municipal services, such as nursery schools. These effects are larger in areas with higher political competition. The paper also investigates how these changes in local services aected the labor markets. Decen- tralization, likely through expanded nursery schools, increased female labor supply, reducing the gender gap in employment.
{"title":"The Effects of Fiscal Decentralization on Publicly Provided Services and Labor Markets","authors":"Nicola Bianchi, Michela Giorcelli, E. M. Martino","doi":"10.2139/ssrn.3407825","DOIUrl":"https://doi.org/10.2139/ssrn.3407825","url":null,"abstract":"This paper studies how fiscal decentralization aects local services. It exploits a 1993 reform that increased the fiscal autonomy of Italian municipalities by introducing a local property tax. The identification leverages cross-municipal variation in the degree of decentralization stemming from Allied bombings during WWII. Decentralization reduced overall spending, but expanded municipal services, such as nursery schools. These effects are larger in areas with higher political competition. The paper also investigates how these changes in local services aected the labor markets. Decen- tralization, likely through expanded nursery schools, increased female labor supply, reducing the gender gap in employment.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129162033","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Kilian Dinkelaker, Andreas Mattig, Stefan Morkoetter
Based on a dataset including 11,636 private debt placements issued globally between 1999 and 2016, we investigate the association between borrower-lender information asymmetry and the cost of debt for issuers. We observe that information asymmetry due to being a private or unrated firm is associated with higher cost of private debt. Our results equally inform corporate financing decisions and government initiatives aimed at promoting private debt markets in order to expand funding sources for the private sector.
{"title":"Information Asymmetry and the Pricing of Privately Placed Debt","authors":"Kilian Dinkelaker, Andreas Mattig, Stefan Morkoetter","doi":"10.2139/ssrn.3777161","DOIUrl":"https://doi.org/10.2139/ssrn.3777161","url":null,"abstract":"<br>Based on a dataset including 11,636 private debt placements issued globally between 1999 and 2016, we investigate the association between borrower-lender information asymmetry and the cost of debt for issuers. We observe that information asymmetry due to being a private or unrated firm is associated with higher cost of private debt. Our results equally inform corporate financing decisions and government initiatives aimed at promoting private debt markets in order to expand funding sources for the private sector.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"160 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115820133","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract: Налог на добычу полезных ископаемых является главным способом изъятия природной ренты в России. Однако уровень налогообложения в отношении твёрдых полезных ископаемых очень низок и не соответствует их доли в производстве и экспорте сырья. Ввиду этого становится актуальной задача поиска новых подходов к налогообложению твёрдых полезных ископаемых исходя из принципов, принятых в мировой практике.
Russian Abstract: Tax on mineral extraction is the main method of collection of the resource rent in Russia. However, the tax level on solid minerals is very low, so it does not correspond to their share in the production as well as the export of raw materials. In connection with that, an investigation of new approaches to the taxation of solid minerals based on the best world practices becomes the burning issue.
{"title":"Разработка подходов к совершенствованию налогообложения добычи твердых полезных ископаемых (Development of Approaches to Improving Taxation of Solid Minerals Extraction)","authors":"Andrey Korytin, Natalia Kostrykina, Elena Melkova","doi":"10.2139/ssrn.3860258","DOIUrl":"https://doi.org/10.2139/ssrn.3860258","url":null,"abstract":"<b>Russian Abstract:</b> Налог на добычу полезных ископаемых является главным способом изъятия природной ренты в России. Однако уровень налогообложения в отношении твёрдых полезных ископаемых очень низок и не соответствует их доли в производстве и экспорте сырья. Ввиду этого становится актуальной задача поиска новых подходов к налогообложению твёрдых полезных ископаемых исходя из принципов, принятых в мировой практике.<br><br> <b>Russian Abstract:</b> Tax on mineral extraction is the main method of collection of the resource rent in Russia. However, the tax level on solid minerals is very low, so it does not correspond to their share in the production as well as the export of raw materials. In connection with that, an investigation of new approaches to the taxation of solid minerals based on the best world practices becomes the burning issue.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121594200","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Russian Abstract: Объектом исследования являлись российская экономика и виды деятельности отдельных регионов. Основной целью исследования являлось теоретико-методологическое обоснование механизмов влияния кредитного рынка, отечественного фондового рынка, институциональных инвесторов на долгосрочное экономическое развитие страны.
Russian Abstract: The object of the research was the Russian economy and the types of activities of individual regions. The main purpose of the study was the theoretical and methodological substantiation of the mechanisms of influence of the credit market, the domestic stock market, institutional investors on the long-term economic development of the country.
{"title":"ДОЛГОВОЕ И ДОЛЕВОЕ ФИНАНСИРОВАНИЕ КАК ФАКТОРЫ ДОЛГОСРОЧНОГО ЭКОНОМИЧЕСКОГО РОСТА (Debt and Equity Financing as Factors of Long-Term Economic Growth)","authors":"Alexey Vedev","doi":"10.2139/ssrn.3860272","DOIUrl":"https://doi.org/10.2139/ssrn.3860272","url":null,"abstract":"<b>Russian Abstract:</b> Объектом исследования являлись российская экономика и виды деятельности отдельных регионов. Основной целью исследования являлось теоретико-методологическое обоснование механизмов влияния кредитного рынка, отечественного фондового рынка, институциональных инвесторов на долгосрочное экономическое развитие страны.<br><br><b>Russian Abstract:</b> The object of the research was the Russian economy and the types of activities of individual regions. The main purpose of the study was the theoretical and methodological substantiation of the mechanisms of influence of the credit market, the domestic stock market, institutional investors on the long-term economic development of the country.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"1973 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2021-01-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130098440","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-12-22DOI: 10.35609/jfbr.2020.5.3(3)
GATR Journals Submitter, Onome Christopher Edo, Anthony Okafor, Akhigbodemhe Emmanuel Justice
Objective – Tax policies play significant role in the direction of foreign direct investments. We investigate the proposition that tax policies enacted by military and democratic regimes differ on the influence the foreign direct investments. Methodology/Technique – Our hypotheses are tested using the error correction model as we compare the impact of tax policies on flow foreign direct investments in Nigeria between two dispensations: military rule from 1983 to 1999 and democratic rule from 1999 to 2017. Panel data between 1983 and 2017 were obtained from the databases of the World Bank, Central Bank of Nigeria and the Federal Inland Revenue Services. The explanatory variables include company income tax, value added tax, tertiary education tax and customs and exercise duties. Findings – The study reveals that tax variables during the military regime exerted more explanatory power of 79% compared to the civilian administration of 66% with respect to the impact of corporate taxes on FDI. The effect of company income tax on FDI was more pronounced during the military regime than in the civilian regime. FDI had a higher degree of convergence during the military regime compared to civilian rule, and this is vital for policy assessments and comparison. Novelty – We bring to light new evidences on the effects of taxes polices on FDI. Type of Paper: Empirical Keywords: Corporate taxes; Tax Policies; Foreign Direct Investments; Error Correction Model; Military regime; Civilian regime. Reference to this paper should be made as follows: Edo, O.C; Okafor, A; Emmanuel, A. (2020). Tax Policy and Foreign Direct Investment: A Regime Change Analysis., J. Fin. Bank. Review, 5 (3): 84 – 98 https://doi.org/10.35609/jfbr.2020.5.3(3) JEL Classification: E22, F21, H2, P33.
{"title":"Tax Policy and Foreign Direct Investment: A Regime Change Analysis.","authors":"GATR Journals Submitter, Onome Christopher Edo, Anthony Okafor, Akhigbodemhe Emmanuel Justice","doi":"10.35609/jfbr.2020.5.3(3)","DOIUrl":"https://doi.org/10.35609/jfbr.2020.5.3(3)","url":null,"abstract":"Objective – Tax policies play significant role in the direction of foreign direct investments. We investigate the proposition that tax policies enacted by military and democratic regimes differ on the influence the foreign direct investments.\u0000Methodology/Technique – Our hypotheses are tested using the error correction model as we compare the impact of tax policies on flow foreign direct investments in Nigeria between two dispensations: military rule from 1983 to 1999 and democratic rule from 1999 to 2017. Panel data between 1983 and 2017 were obtained from the databases of the World Bank, Central Bank of Nigeria and the Federal Inland Revenue Services. The explanatory variables include company income tax, value added tax, tertiary education tax and customs and exercise duties.\u0000Findings – The study reveals that tax variables during the military regime exerted more explanatory power of 79% compared to the civilian administration of 66% with respect to the impact of corporate taxes on FDI. The effect of company income tax on FDI was more pronounced during the military regime than in the civilian regime. FDI had a higher degree of convergence during the military regime compared to civilian rule, and this is vital for policy assessments and comparison.\u0000Novelty – We bring to light new evidences on the effects of taxes polices on FDI.\u0000Type of Paper: Empirical\u0000Keywords: Corporate taxes; Tax Policies; Foreign Direct Investments; Error Correction Model; Military regime; Civilian regime.\u0000Reference to this paper should be made as follows: Edo, O.C; Okafor, A; Emmanuel, A. (2020). Tax Policy and Foreign Direct Investment: A Regime Change Analysis., J. Fin. Bank. Review, 5 (3): 84 – 98 https://doi.org/10.35609/jfbr.2020.5.3(3)\u0000\u0000JEL Classification: E22, F21, H2, P33.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"26 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132692742","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Some countries currently face historically low interest rates on government debt due to a positive ‘convenience yield’ arising from an excess demand for safe and liquid assets. This low interest rate environment has raised interest in the role of fiscal stabilization policy. We study the convenience yield and its implications for fiscal policy in a New Keynesian model where households derive utility from government bonds. We find that the convenience yield expands the set of sustainable fiscal policies and renders countercyclical fiscal policy successful in stabilizing business cycle fluctuations. Conveniently, fiscal policies that stabilize output rather than debt are feasible, welfare enhancing and can even reduce the risk of exploding debt dynamics if the convenience yield is positive.
{"title":"A Convenient Truth: The Convenience Yield, Low Interest Rates and Implications for Fiscal Policy","authors":"Dennis Bonam","doi":"10.2139/ssrn.3749167","DOIUrl":"https://doi.org/10.2139/ssrn.3749167","url":null,"abstract":"Some countries currently face historically low interest rates on government debt due to a positive ‘convenience yield’ arising from an excess demand for safe and liquid assets. This low interest rate environment has raised interest in the role of fiscal stabilization policy. We study the convenience yield and its implications for fiscal policy in a New Keynesian model where households derive utility from government bonds. We find that the convenience yield expands the set of sustainable fiscal policies and renders countercyclical fiscal policy successful in stabilizing business cycle fluctuations. Conveniently, fiscal policies that stabilize output rather than debt are feasible, welfare enhancing and can even reduce the risk of exploding debt dynamics if the convenience yield is positive. <br>","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"165 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122069994","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In 2020, Argentina and Ecuador were the first sovereigns to conduct a debt restructuring using the cross series aggregation feature included in the International Capital Market’s standard Collective Action Clauses (ICMA CACs), published in 2014. The legal strategy of both countries articulated two features: (i) “re-designation” (ie, the possibility for the issuer, with bondholder consent, to re-define the pool of bond series to be considered for aggregation purposes); and (ii) the sequential use of the aggregation methods contemplated in the ICMA CACs (dubbed the “Pac-Man”). The combination of these two features in a sovereign debt workout could hypothetically result in a sovereign relying on a minority of its creditors to ultimately bind and restructure a majority. This new found flexibility initially led the creditor community to demand the eradication of the possibility to re-designate and the complete removal of the innovations introduced by ICMA in 2014 from Argentina’s bond documentation. Ultimately, Argentina and Ecuador persuaded their creditors to permit re-designation, as well as the sequential use of aggregation methods, and proposed adjusting the ICMA CACs by introducing certain limits that would foreclose the possibility for a sovereign to effect a restructuring over all creditors if its original offer failed to attract the support of a meaningful majority.
This article describes the terms and processes of the Argentine and Ecuadorian debt workouts and argues that (i) in certain cases, the downside of prohibiting a sovereign from “re-designating” outweighs the benefits of re-designation, as it may turn a restructuring into an “all-or-nothing” game, further complicating inter-creditor dynamics, and (ii) the ability to use different aggregation methods sequentially, within certain limits, also advances the objectives of the ICMA CACs.
{"title":"CACs at Work: What Next?","authors":"Andrés de la Cruz, Ignacio Lagos","doi":"10.2139/ssrn.3765825","DOIUrl":"https://doi.org/10.2139/ssrn.3765825","url":null,"abstract":"In 2020, Argentina and Ecuador were the first sovereigns to conduct a debt restructuring using the cross series aggregation feature included in the International Capital Market’s standard Collective Action Clauses (ICMA CACs), published in 2014. The legal strategy of both countries articulated two features: (i) “re-designation” (ie, the possibility for the issuer, with bondholder consent, to re-define the pool of bond series to be considered for aggregation purposes); and (ii) the sequential use of the aggregation methods contemplated in the ICMA CACs (dubbed the “Pac-Man”). The combination of these two features in a sovereign debt workout could hypothetically result in a sovereign relying on a minority of its creditors to ultimately bind and restructure a majority. This new found flexibility initially led the creditor community to demand the eradication of the possibility to re-designate and the complete removal of the innovations introduced by ICMA in 2014 from Argentina’s bond documentation. Ultimately, Argentina and Ecuador persuaded their creditors to permit re-designation, as well as the sequential use of aggregation methods, and proposed adjusting the ICMA CACs by introducing certain limits that would foreclose the possibility for a sovereign to effect a restructuring over all creditors if its original offer failed to attract the support of a meaningful majority.<br><br>This article describes the terms and processes of the Argentine and Ecuadorian debt workouts and argues that (i) in certain cases, the downside of prohibiting a sovereign from “re-designating” outweighs the benefits of re-designation, as it may turn a restructuring into an “all-or-nothing” game, further complicating inter-creditor dynamics, and (ii) the ability to use different aggregation methods sequentially, within certain limits, also advances the objectives of the ICMA CACs.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"98 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127495086","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Leveraged asset price bubbles, i.e., boom-bust phases in asset prices accompanied by credit overhangs, are more harmful than unleveraged ones, in terms of financial and macroeconomic stability. If bubbles are not all alike, neither are all bubbles likely? As bubbles are difficult to detect in real-time data, early researches focused on the macroeconomic conditions exacerbating the bubbles' nature. We specifically look at a condition that could become more persistent in the aftermath of COVID-19 pandemic: low risk-free interest rates. In an OLG model, we show that the existence condition for a leveraged bubble is more easily met than that of an unleveraged bubble with low interest rates, and thus leveraged bubbly episodes are relatively more likely to emerge than unleveraged ones. Then, we show that this result holds empirically for post-World War II bubbles in advanced economies.
{"title":"Asset Price Bubbles with Low Interest Rates: Not All Bubbles are Likely to Emerge","authors":"Jacopo Bonchi, Francesco Simone Lucidi","doi":"10.2139/ssrn.3744344","DOIUrl":"https://doi.org/10.2139/ssrn.3744344","url":null,"abstract":"Leveraged asset price bubbles, i.e., boom-bust phases in asset prices accompanied by credit overhangs, are more harmful than unleveraged ones, in terms of financial and macroeconomic stability. If bubbles are not all alike, neither are all bubbles likely? As bubbles are difficult to detect in real-time data, early researches focused on the macroeconomic conditions exacerbating the bubbles' nature. We specifically look at a condition that could become more persistent in the aftermath of COVID-19 pandemic: low risk-free interest rates. In an OLG model, we show that the existence condition for a leveraged bubble is more easily met than that of an unleveraged bubble with low interest rates, and thus leveraged bubbly episodes are relatively more likely to emerge than unleveraged ones. Then, we show that this result holds empirically for post-World War II bubbles in advanced economies.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"15 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114409035","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Half way through her terms as Fed chair, Janet Yellen presided over the Fed’s controversial decision to start raising interest rates — a decision many viewed then, and many more view now, as premature. Was that decision consistent with Yellen's supposed commitment to full employment? Or was she instead a hawk in dove’s clothing, whose monetary overtightening kept millions out of work for no good reason? I argue that neither view is correct. Instead, the roots of the Fed's untimely rate hike, and Yellen's part in it, lay in her and other Fed officials’ ill-conceived plans for “normalizing” monetary policy.
{"title":"Janet Yellen's Lift Off","authors":"G. Selgin","doi":"10.2139/ssrn.3742029","DOIUrl":"https://doi.org/10.2139/ssrn.3742029","url":null,"abstract":"Half way through her terms as Fed chair, Janet Yellen presided over the Fed’s controversial decision to start raising interest rates — a decision many viewed then, and many more view now, as premature. Was that decision consistent with Yellen's supposed commitment to full employment? Or was she instead a hawk in dove’s clothing, whose monetary overtightening kept millions out of work for no good reason? I argue that neither view is correct. Instead, the roots of the Fed's untimely rate hike, and Yellen's part in it, lay in her and other Fed officials’ ill-conceived plans for “normalizing” monetary policy.","PeriodicalId":119398,"journal":{"name":"Political Economy - Development: Fiscal & Monetary Policy eJournal","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125641481","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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