The British origins of the US endowment model

David Chambers, Elroy Dimson 20 October 2014

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In recent years much attention has been given to the so-called ‘Yale model’, an approach to investing practised by the Yale University Investments Office in managing its $24 billion endowment. The core of this model is an emphasis on diversification and on active management of equity-orientated, illiquid assets (Yale 2014). Yale has generated returns of 13.9% per annum over the last 20 years – well in excess of the 9.2% average return on US college and university endowments. Other leading US university endowments have followed this model (Lerner et al. 2008).

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Topics:  Financial markets

Tags:  investment, endowments, university endowments, college endowments, Universities, Keynes, asset management, diversification, Great Depression, Great Recession, buy-and-hold, equity investing, portfolio management, Yale, Cambridge

The halo of victory: What Americans learned from World War I

Hugh Rockoff 04 October 2014

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World War I had important consequences for the structure of the US economy and its role in the world economy. This was especially true in the world of finance. The US transitioned from being a debtor nation to a creditor nation, and financial leadership moved from London to New York. But equally important were the lessons that Americans drew from the war. Although the war had much to teach, Americans tended, I will argue below, to learn too much from the war, drawing strong conclusions from a war in which the US was actively engaged for only 19 months.

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Topics:  Competition policy Economic history

Tags:  World War I, WWI, planning, rationing, New Deal, Great Depression, fiscal policy, monetary policy, stimulus, financial crisis, conscription, inflation, unemployment, price controls, Competition policy, antitrust, National Industrial Recovery Act

TARGET balances, Bretton Woods, and the Great Depression

Michael Bordo 21 March 2014

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During the Eurozone crisis, an analogy was made between the events in Europe between 2007 and 2012 and the collapse of the Bretton Woods System between 1968 and 1971. There has been a build-up of TARGET liabilities since 2007 by some central banks (notably Greece, Ireland, Portugal, and Spain, or the ‘GIPS’), and of TARGET assets by Germany and others.

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Topics:  Economic history International finance

Tags:  ECB, eurozone, euro, global imbalances, Central Banks, financial crisis, Great Depression, Eurosystem, Eurozone crisis, Bretton Woods, TARGET

Monetary alchemy, fiscal science

Jeffrey Frankel 29 January 2013

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The year 2013 marks the 100th anniversary of two major institutional innovations in US economic policy:

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Topics:  Global crisis Macroeconomic policy

Tags:  monetary policy, Federal Reserve, fiscal policy, Great Depression, Keynes

Jobless recoveries and the disappearance of routine occupations

Henry Siu, Nir Jaimovich 06 November 2012

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Economic recoveries aren’t what they used to be. Since the end of the Great Recession in June 2009:

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Topics:  Global crisis Labour markets Poverty and income inequality

Tags:  unemployment, Great Depression, jobs, Great Recession, labour

New preface to Charles Kindleberger, The World in Depression 1929-1939

J. Bradford DeLong, Barry Eichengreen 12 June 2012

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The parallels between Europe in the 1930s and Europe today are stark, striking, and increasingly frightening. We see unemployment, youth unemployment especially, soaring to unprecedented heights. Financial instability and distress are widespread. There is growing political support for extremist parties of the far left and right.

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Topics:  Economic history Global crisis Global economy

Tags:  Great Depression, Eurozone crisis, Kindleberger

How did US and EU trade policy withstand the Great Recession?

Chad P Bown, Meredith Crowley 28 April 2012

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During the Great Recession, import protection increased around the world (Evenett, 2011). Popular policies included antidumping tariffs, safeguards, and other temporary trade barriers (Bown 2011a,b). Despite this, for high-income economies such as the US and EU, such trade barriers increased much less than initially feared. In this column, we ask how and why.

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Topics:  International trade

Tags:  trade policy, Great Depression, protectionism

A tale of two depressions redux

Barry Eichengreen, Kevin Hjortshøj O’Rourke 06 March 2012

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Topics:  Global crisis Macroeconomic policy

Tags:  fiscal policy, Great Depression, Great Recession

Right-wing political extremism in the Great Depression

Alan de Bromhead, Barry Eichengreen, Kevin Hjortshøj O’Rourke 27 February 2012

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The impact of the global crisis has been more than just economic.

  • In both parliamentary and presidential democracies, governments have been ousted.
  • Hard economic times have bred support for nationalist and right-wing political parties, including some that are actively hostile to the prevailing political system.

All this gives rise to fears that economic hard times will feed political extremism, as it did in the 1930s.

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Topics:  Politics and economics

Tags:  elections, Great Depression, Fascism

When markets freeze: Tobin’s q and QE

Marcus Miller, John Driffill 27 September 2011

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The economies of the North Atlantic look in poor shape. But it could be worse. Central banks have been doing their best to save capitalism from its own self-fulfilling fears, using the policy of quantitative easing to take frozen assets onto their balance sheets until confidence returns. Why they are doing this – and why it matters – can best be seen in the light of history.

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Topics:  Global crisis Monetary policy

Tags:  monetary policy, Central Banks, Great Depression, global crisis, quantitative easing

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