scholarly journals Can the Federal Reserve Effectively Target Main Street? Evidence from the 1970s Recession

2021 ◽  
Vol 2021 (060) ◽  
pp. 1-75
Author(s):  
John Kandrac ◽  
Keyword(s):  
Federal Reserve ◽  
Employment Growth ◽  
The United States ◽  
Real Economy ◽  
Payroll Taxes ◽  
Local Areas ◽  
Historical Episode ◽  
The Government ◽  
The Cost ◽  
Central Bankers

Modern central bankers confront a challenge of providing economic stimulus even when the policy rate is constrained by a lower bound. This challenge has led to substantial innovation by policymakers and a proliferation of new policy tools. In this paper, I offer evidence on the efficacy of a new tool known as funding for lending, which provides banks with subsidized funding to make additional loans. I focus on a historical episode from the United States in which the Federal Reserve provided banks with steeply subsidized loans to promote the expansion of credit within their local communities. I show that the cheap funding succeeded in generating more lending by countering banks' excessive liquidity preference. The additional credit benefited the real economy. Local areas enjoyed higher rates of small business formation and more rapid employment growth. Finally, I show that the cost of the subsidy provided by the government was more than offset by the additional payroll taxes paid out of higher wages and salaries. These results suggest that funding for lending programs deserve consideration for the modern central banker's toolkit and demonstrate that certain unconventional tools can offer monetary policymakers the means to pursue more targeted objectives.

Impact of Government Bailout on Banks’ Cost of Equity: Additional Evidence from the Financial Bailout of 2008–2009

2021 ◽  
Vol 24 (01) ◽  
pp. 2150003
Author(s):  
Daphne Wang ◽  
Robert Houmes ◽  
Thanh Ngo ◽  
Omar Esqueda
Keyword(s):  
Institutional Ownership ◽  
The United States ◽  
Matched Sample ◽  
Cost Of Equity ◽  
Troubled Asset Relief Program ◽  
Low Concentrations ◽  
The Government ◽  
The Cost ◽  
Relief Program ◽  
Robust Evidence

The Capital Purchase Program (CPP) was the first and most significant program under the Troubled Asset Relief Program (TARP) during 2008–2009 financial crisis. This study evaluates the effect of the CPP during this period on the cost of equity of 170 publicly listed banks in the United States that received funding. To control for the potential effects of endogeneity on our results, we use a propensity score matched sample of non-CPP banks. Using this approach, we document robust evidence that the liquidity provided by the government bailout reduced the cost of equity for recipient banks, especially for those banks that repaid their bailout funds in full. This decrease in the cost of equity is particularly significant for banks with high market-to-book ratios, low concentrations of institutional ownership, and those banks with at least one large blockholder. Our findings have important implications for the assessment of government bailout programs and the future regulation of financial institutions.

scholarly journals SUBPRIME MORTGAGE CRISIS IN THE UNITED STATES IN 2007–2008: CAUSES AND CONSEQUENCES (PART I)

Ekonomika ◽  
2015 ◽  
Vol 93 (4) ◽  
pp. 85-118 ◽  
Author(s):  
Vaidotas Pajarskas ◽  
Aldona Jočienė
Keyword(s):  
United States ◽  
Federal Reserve ◽  
The United States ◽  
Mortgage Market ◽  
Subprime Mortgage ◽  
Market Expansion ◽  
Mortgage Crisis ◽  
Subprime Mortgage Crisis ◽  
The Government ◽  
The Impact

The main purpose of this article is to determine which factors and how contributed to the subprime mortgage crisis in the United States in 2007–2008, what their causal links and effects on the markets and the whole economy were, and to assess what actions could have been taken by the Federal Reserve and the Government in order to mitigate or prevent the consequences of subprime mortgage crisis and housing bubble. In order to obtain the research results, the authors performed a qualitative analysis of the scientific literature on the course of events and their development that led to the subprime mortgage crisis, and focused on the insufficiently regulated home mortgage market expansion, the impact on the subprime mortgage crisis of financial innovations and financial engineering, poorly evaluated systemic risks and policy undertaken by both the U.S. Government and the Federal Reserve before and after the crisis. The quantitative research focused on two main parts: firstly, analysis of the dependence between the causes of subprime mortgage crisis and the consequences, using a statistical and regression analysis, and secondly, an alternative path the Government and the Federal Reserve could have taken in their policy actions and the results they could have produced. The authors believe that the results of the research could give useful guidelines to the central bankers and government officials on how to make long-term decisions that can help in preparing for the financial distress, mitigating the consequences when the crisis strikes, accelerating the recovery and even preventing the crisis it in the future. The second part of the qualitative research will appear in the next issue of the journal.

Recognizing barriers to entry of biosimilars in the United States market and highlighting the solutions

2020 ◽  
pp. 174113432097215
Author(s):  
Arpit Bana ◽  
Priti J Mehta
Keyword(s):  
Patent Protection ◽  
Reference Product ◽  
Market Competition ◽  
The United States ◽  
Living Cells ◽  
Barriers To Entry ◽  
The Us ◽  
The Government ◽  
The Cost ◽  
The U.S

Drugs that are procured from living cells and are used to treat acute and chronic diseases are called biologics, whereas biosimilars are the drugs which are highly similar but not identical to the original reference product. The main advantage of these drugs is that they are highly targeted with great therapeutic activity and can be used for multiple indications. Despite all the advantages biologics are still extremely costly. The main purpose of developing and introducing biosimilars was and is to increase market competition leading to a decrease in the cost of the biologics. However, until now the cost of the treatment has not decreased in the US market because there are many barriers to the entry of biosimilar in the US market which are discussed in this article. In this article, we argue that the barrier or hurdle in the US market entry of the biosimilars is not only limited to patent protection or exclusivity but other less discussed barriers are also there which are to be discussed. Due to these barriers till June 10, 2020, only 9 biosimilars are available commercially in the US market out of the 27 biosimilars approved for marketing by the U.S. Food and Drug Administration (FDA). We argue that the introduction of these biosimilars in the US market is essential for increasing market competition and thus decreasing the overall treatment cost for both the government and the payers. In this article, we are also providing perspective on the possible solutions to reduce these barriers and to encourage the entry of biosimilar in the US market.

2. American Retrospect

1886 ◽  
Vol 32 (138) ◽  
pp. 265-274
Author(s):  
D. Hack Tuke
Keyword(s):  
The United States ◽  
Great Satisfaction ◽  
State Institutions ◽  
Personal Liberty ◽  
The Government ◽  
Extension Of State ◽  
The Cost ◽  
Open Wards ◽  
Cost Of Construction ◽  
General Adoption

Among the papers read at this Conference eight are by experts in the Psychological Department of Medicine, and occupy more than 60 pages. Dr. Chapin, the Superintendent of the Penn. Hospital, Philadelphia, presents a report of the Committee on the Provision for the insane, in which it is stated that of the 92,000 insane persons in the United States 43,000 are not in asylums. Of Boards of State Charities it is held that their powers in respect to asylums should be limited to the examination and report of their condition and the investigation of abuses. The policy of committing the responsibility of administration to such Boards is not wise. It is observed that whatever may be the objections to Local Boards entrusted with State Institutions, there are other largely compensating advantages in their favour. It is added that “Boards of State Charities” may exercise a wholesome oversight and supervision, observe the best methods, and urge their general adoption. Great satisfaction is expressed at the wide departures that have been made from former plans of asylum construction, as at Willard; Middletown; the open wards of the Government Asylum, Washington; the asylum at Kankakee; the Bancroft wards at the Concord Asylum; the “Cottage by the Sea,” under the direction of the Friends' Asylum, Philadelphia; and the Mountain House connected with the Vermont Asylum. Such asylums as Kankakee have succeeded in showing that the cost of construction and the maintenance of patients may be considerably reduced, thus removing a great obstacle to the extension of State provision for the insane; while there has been an increase of personal liberty and a greater opportunity for the various occupations in which a community engages. Dr. Chapin makes this honourable acknowledgment:—“Candour compels us to acknowledge some of the results have been aided by fair and wholesome criticism, which has furnished moral support to bring about changes as well as incentment to devise ways for improvement. It is an unfortunate error to cultivate an opinion that any human work is perfect or cannot be improved.” He advocates for the accommodation of bed-ridden patients, feeble dements, and epileptics, large associated dormitories (like our Caterham and Leavesden), with an efficient staff of night attendants, or a total separate building one storey in height, comprising a day-room or ward, and a dormitory with a few adjoining single rooms. Of the patients at Willard, 10 per cent. were of the class suited for this arrangement.

scholarly journals The economic crisis, the Pharmaceutical Benefits Scheme, and the dilemmas of medicines policy

2009 ◽  
Vol 33 (2) ◽  
pp. 171
Author(s):  
Hans Löfgren
Keyword(s):  
Health Insurance ◽  
Middle Class ◽  
The United States ◽  
Insurance Companies ◽  
Real Economy ◽  
Access To Health Services ◽  
Australian Health ◽  
The Media ◽  
Social Disaster ◽  
The Cost

AS THIS SPECIAL ISSUE of Australian Health Review was finalised, the media reported daily on the global financial debacle and its deepening into a crisis in the real economy. The causes of the crisis are hazy ? but its impact, across the globe, on people?s lives is real and distressing. Many people are affected by worsening poverty and deteriorating access to health services and medicinal drugs. In the United States, unemployment often means the loss of health insurance, reinforcing risks of financial and social disaster for many families who would have previously considered themselves comfortable middle class. For those lucky enough to retain jobs, the cost of health insurance may rapidly become unaffordable; ?Healthcare a Budget-Buster for Families; Even County?s Middle Class Can?t Afford It?, ran a typical recent headline in a non-metropolitan newspaper.1 Even before the present crisis, tens of millions of Americans were excluded from health insurance. Those not excluded pay premiums to insurance companies that spend vast resources trying to insure the healthy, avoid the sick, and deny payment for claims wherever possible. Gaining power partly on a wave of resentment against the excesses of neo-liberalism, President Barak Obama has promised public health insurance for those not otherwise covered. Should this reform be successfully implemented, it will belatedly bring to US citizens a level of security approximating what Australians, and many Europeans, have had for decades.

scholarly journals Post COVID-19 Will Telemedicine replace Traditional Medicine?

2020 ◽  
pp. 1-5
Keyword(s):  
The United States ◽  
Care Plan ◽  
Life Care ◽  
Licensed Practical Nurse ◽  
Care Plans ◽  
Practical Nurse ◽  
The Government ◽  
The Cost ◽  
New Industry ◽  
Trump Administration

Telehealth services have grown exponentially in 2020. Both the government and more than 275 technology companies have made significant investments in this new industry. The Trump Administration has streamlined the process to benefit 13.7 million Medicare Advantage enrollees. Amwell, the leading telemedicine company in the United States received a $100 million investment from Google, plus $100 million towards a pilot program from the FCC. Attorneys will be affected because any life care plan attributes the largest expense to the hiring of a Licensed Practical Nurse (LPN), and their services are being impacted by telehealth technology in the last five years. Thanks to telehealth technology, nurses can work remotely, and this may lower the cost of support care mentioned in the life care plans that attorneys use.

Outcomes Research in the Treatment of Asthma

2010 ◽  
pp. 78-99
Author(s):  
Ram C. Neupane ◽  
Jason Turner
Keyword(s):  
United States ◽  
Chronic Disease ◽  
Medical Expenditure Panel Survey ◽  
The United States ◽  
Medical Expenditure ◽  
National Inpatient Sample ◽  
Therapeutic Goals ◽  
Common Chronic Disease ◽  
The Government ◽  
The Cost

Asthma is a common chronic disease in the United States, with increasing prevalence. Many patients do not realize therapeutic goals because of poor disease management. The purpose of this study is to examine the costs of the commonly used drugs used to treat asthma. We examined the contribution of individual, government and private agencies for medication payment. We next compared the prescription cost to the cost of emergency room visits. The data are taken from the Medical Expenditure Panel Survey. SAS Enterprise Guide was used for preprocessing and data visualization. It was found that prednisone is the cheapest drug and the drug, albuterol, is the most common, even if it is more expensive. The contribution of the government is higher than the amount paid by individuals and other agencies. We examined data from the National Inpatient Sample to investigate trends in asthma as well.

scholarly journals Private shareholding: An analysis of an eclectic group of central banks

2016 ◽  
Vol 19 (1) ◽  
pp. 150-159 ◽  
Author(s):  
Jannie Rossouw
Keyword(s):  
South Africa ◽  
Central Bank ◽  
Federal Reserve ◽  
European Central Bank ◽  
The United States ◽  
Central Banks ◽  
European Central ◽  
Dividend Payments ◽  
Implementation Of Monetary Policy ◽  
The Government

Although the title seems to be a contradictio in terminis, this paper identifies a small, eclectic number of central banks with private shareholders about which little has been published. It is shown that only the central banks of Belgium, Greece, Italy, Japan, South Africa, Switzerland, Turkey and the United States (US) Federal Reserve allow shareholding other than by the government of the respective countries, although not in all instances by the general public. This paper considers private shareholding in this eclectic group of central banks, despite the trend of nationalising central banks that commenced in 1935. Private shareholding is defined as shareholding in a central bank by any party other than the respective government or governments (e.g. the European Central Bank) where the central bank is located.Large differences in the classes of shareholders of these eclectic central banks and differences in their approaches to dividend payments are highlighted in the paper. The conclusions reached are, firstly, that investment only in the shares of the central banks of Belgium and Greece (albeit only for residents in the latter instance) can be regarded as growth investments. Secondly, shareholding in the Italian central bank has been used to recapitalise ailing commercial banks. Thirdly, shareholders play no role in the formulation and implementation of monetary policy. Lastly, the shareholding structure of these banks contributes to improved governance in the case of the central banks of Belgium, Greece, Italy, South Africa, Switzerland and Turkey, but no evidence can be found that central banks with shareholders in any way outperform central banks without shareholders.

scholarly journals PIERWSZY BANK STANÓW ZJEDNOCZONYCH JAKO PIERWOWZÓR SYSTEMU REZERWY FEDERALNEJ

2017 ◽  
Vol 9 (1) ◽  
pp. 171
Author(s):  
Wojciech Kwiatkowski
Keyword(s):  
United States ◽  
Supreme Court ◽  
Federal Government ◽  
Federal Reserve ◽  
Financial Stability ◽  
The United States ◽  
The Supreme Court ◽  
The Government ◽  
Banking Institution ◽  
The Right

First Bank of the United States as a Prototype for the Federal Reserve SystemSummaryThe article describes the history of the First Bank of the United Statesfirst banking- institution, that was charted in XVII-th century North America as an effect of a cooperation of two federal bodies – Congress and the President. Although, the federal government possessed only 20 %, of the shares with federal licences it could conduct its activity on territory of the whole country. Moreover – the Bank is now referred to as the first central bank in the United States because of its national scope and services rendered to the federal government. The Bank helped the government to obtain emergency loans, facilitated the payment of taxes, and served as the receiver and disburser of the public funds. In addition, it issued bank notes and made them fully redeemable in coin. During a 20-years period the Bank achieved a commercial success and maintained a financial stability. However, in 1811 Congress did not renew the charter because the Bank’s constitutionality was questioned.Alexander Hamilton (the first U.S. Secretary of the Treasury), who was [the followerof creation of the bank, already in 1790 assumed that the federal government had the power to charter banks because the Constitution granted the government the right to establish institutions necessary for its operations. Addifferent viewpoint was presented by Thomas Jefferson who favored a more decentralized government and believed that only the states could charter banks under the Constitution. Furthermore – because the Constitution did not expressly grant the power to Congress, he reasoned that federally chartered banks were unconstitutional. Finally in 1819, as a far-reaching decision, the Supreme Court Chief Justice John Marshall followed Hamilton’s reasoning and ruled in case McCulloch vs Maryland that the Second Bank of the United States was constitutional. For U.S. federal government this decision of the Supreme Court was very important about 200 years later – in 1913, when president Wilson, many politicians’ and main U.S. bankers decided to create the Federal Reserve System.

scholarly journals A Unified Welfare Analysis of Government Policies*

2020 ◽  
Vol 135 (3) ◽  
pp. 1209-1318 ◽  
Author(s):  
Nathaniel Hendren ◽  
Ben Sprung-Keyser
Keyword(s):  
Willingness To Pay ◽  
Low Income ◽  
Social Insurance ◽  
Welfare Analysis ◽  
The United States ◽  
Future Research ◽  
Long Term Effects ◽  
Marginal Value ◽  
The Government ◽  
The Cost

Abstract We conduct a comparative welfare analysis of 133 historical policy changes over the past half-century in the United States, focusing on policies in social insurance, education and job training, taxes and cash transfers, and in-kind transfers. For each policy, we use existing causal estimates to calculate the benefit that each policy provides its recipients (measured as their willingness to pay) and the policy’s net cost, inclusive of long-term effects on the government’s budget. We divide the willingness to pay by the net cost to the government to form each policy’s Marginal Value of Public Funds, or its ``MVPF''. Comparing MVPFs across policies provides a unified method of assessing their effect on social welfare. Our results suggest that direct investments in low-income children’s health and education have historically had the highest MVPFs, on average exceeding 5. Many such policies have paid for themselves as the government recouped the cost of their initial expenditures through additional taxes collected and reduced transfers. We find large MVPFs for education and health policies among children of all ages, rather than observing diminishing marginal returns throughout childhood. We find smaller MVPFs for policies targeting adults, generally between 0.5 and 2. Expenditures on adults have exceeded this MVPF range in particular if they induced large spillovers on children. We relate our estimates to existing theories of optimal government policy, and we discuss how the MVPF provides lessons for the design of future research.

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