What part of speech is an “-ing” form at the very beginning of a sentence?

Question

I have been reading this paper and the following sentence is quite confusing to me:

Hiking interest rates to get inflation under control when unemployment is rising could push unemployment even higher. Cutting interest rates to stimulate the economy could produce more inflation.

My question is, whether "Hiking" and "Cutting" are verbs, or gerunds?

I had a look at this question which has a very complete answer, but it really confuses me the fact that in my sentence the subject ("Interest rates") is followed by the preposition "to" which is used with verbs, but in the question I linked, the verbs starting with -ing are gerunds. Thank you for your time.

Answer 1

Gerunds/participles are a form of a verb. The clause that is headed by an -ing verb can be a subject. But first remember that all gerunds are verbs.

The subject in these sentences isn't "interest rates". Considering the second sentence, the subject is, "Cutting interest rates to stimulate the economy". This long subject is headed by the -ing verb, "cutting". The word "interest rates is the object of the -ing verb "cutting". The infinitive clause, "to stimulate the economy" is a catetative clause, it gives the the purpose of "cutting interest rates".

The word "to" is a subordinator that marks the infinitive "stimulate..." as a subordinate clause.

So we have the rough bracketing

[subject 
   [-ing verb Cutting] 
   [object interest rates] 
   [
       [subordinator to] 
       [infinitive verb stimulate]
       [object the economy]
   ] 
 ] could...

Now you may have read that "A gerund is an -ing clause that functions like a noun" or even "Gerund clauses are nouns". This is confused and confusing. Nouns are words. Verbs are words. Adjectives and prepositions are words. Nouns can head noun phrase. Adjectives can head adjective phrases. Verbs head clauses.

The subject of a clause can be a noun phrase or a subordinate clause, such as a clause headed by an -ing verb. This doesn't mean that the clause "acts like a noun", it just means that the subject of some clauses is a subordinate clause.

Nouns can be modified by adjective phrases (often just a one-word phrase) or by participle clauses, or by relative clauses, or by other nouns. Again the fact that a participle clause is modifying a noun doesn't mean it is "acting like an adjective".

Finally note that not every word ending in "-ing" is a participle. There are some adjectives and nouns that have derived from participles. If you write "He's living in a boring building" then "living" is a participle, "boring" is an adjective, and "building" is a noun.

Answer 2

My question is, whether "Hiking" and "Cutting" are verbs, or a gerunds?

All gerunds are a subcategory of verb functions/forms, so the choice cannot be between gerund and verb, but between gerund and some other type of verb function/form, such as a participle.

...it really confuses me the fact that in my sentence the subject ("Interest rates") is followed by the preposition "to" which is used with verbs...

In English the preposition "to" in this usage can be freely used after both nouns and verbs, so you cannot use its presence to diagnose whether a verb form is a gerund or not. All of the following sentence are equivalent, although not equally idiomatic. Only the last example uses "hiking" as a gerund:

1. The government is hiking rates to control inflation.
2. The government is making rate hikes to control inflation.
3. Rate hikes to control inflation are being made by the government.
4. Hiking rates to control inflation is what the government is doing.

You could, of course, use "hiking" as a participle, and not as gerund. For example:

5. This is a government hiking interest rates to control inflation.

You could even start the sentence with a participle phrase acting as an adverb, saying:

6. Hiking interest rates to control inflation, the government will only push employment higher.

Although this last sentence is perfectly grammatical, it is not the best way to express things, since the semantic relationship between the participle phrase and the rest of the sentence is unclear and puts a large burden on the reader/listener to infer the relationship. If the semantics of such a phrase is not immediately resolved, it is more common to say something like:

7. While/Though hiking interest rates to control inflation, the government will only push employment higher.

8. Despite hiking interest rates to control inflation, the government will only push employment higher.

Notice that "hiking" is a participle used used to create an adverb clause in 7, but is a gerund used to create a noun phrase in 8, despite the same form. To prove this difference, note that you could rephrase 8 to say: "Despite the interest rate hikes to control inflation,..."; however, you could not rephrase 7 in this way.

The fact that the same form of verb can be used used with similar semantics, while creating different parts of speech, is one reason that gerunds can be confusing.