We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
The original Operation Twist: the War Finance Corporation's war bond purchases, 1918–1920.
- Authors
Butkiewicz, James L.; Solcan, Mihaela
- Abstract
In 1918 the United States Treasury delegated to the War Finance Corporation, a newly created off-budget federal agency, the task of buying Liberty bonds and later Victory notes in an effort to stabilize prices. Bayesian vector autoregression analysis of the security purchases indicates that the WFC purchases provided statistically significant price support, and marginally lowered bond yields while the program operated. Once WFC purchases ended, war bond yields increased substantially. Between bond issues, the Treasury financed its operations, including security purchases from the WFC, by issuing short-term debt, which affected the money market interest rate. The WFC's bond purchases are found to have a positive and significant impact on the call loan rate. Thus the WFC's bond purchases twisted the yield curve.
- Subjects
SAVINGS bonds; WAR Finance Corp.; WAR finance; RATE of return on bonds; YIELD curve (Finance); SHORT-term debt; TWENTIETH century
- Publication
Financial History Review, 2016, Vol 23, Issue 1, p21
- ISSN
0968-5650
- Publication type
Article
- DOI
10.1017/S0968565016000068