Search Results
Working Paper
Innovations in Mortgage Markets and Increased Spending on Housing
Innovations in the mortgage market since the mid-1990s have effectively reduced a number of financing constraints. Coinciding with these innovations, we document a significant change in the propensity for households to own their homes, as well as substantial increases in the share of household income devoted to housing. These changes in housing expenditures are especially large for those groups that faced the greatest financial constraints, and are robust across the changing composition of households and their geographic location. We present evidence that young, constrained households may ...
Journal Article
IT investment: will the glory days ever return?
While the growth in IT investment has picked up during the recovery and expansion, it has not regained the very rapid pace of the glory days of the late 1990s. Will those glory days ever return? In exploring this question, this Economic Letter looks at one of the main drivers behind the earlier strength in IT investment?the falling prices of IT goods, which themselves were brought about by rapid technological advances in the field. The good news is that some evidence suggests that continued advances should help real IT investment achieve rates of growth that exceed the growth in other ...
Journal Article
Financial innovations and the real economy: conference summary
This Economic Letter summarizes the papers presented at the conference ?Financial Innovations and the Real Economy? held at the Federal Reserve Bank of San Francisco by the Bank?s Center for the Study of Innovation and Productivity on November 16?17, 2006.
Journal Article
House prices and subprime mortgage delinquencies
In this Economic Letter, we explore how the pace of and change in house-price appreciation can affect the incentives and opportunities for borrowers in a market to avoid delinquencies and foreclosures. For instance, with likely gains in home equity in markets where house prices have risen significantly, a homeowner should have greater incentives and opportunities to keep a mortgage loan current. Indeed, we show that markets that recently experienced greater house-price appreciation tended to have lower delinquency rates and smaller increases in delinquency rates. We also find that ...
Working Paper
Understanding productivity: lessons from longitudinal microdata
This paper reviews research that uses longitudinal microdata to document productivity movements and to examine factors behind productivity growth. The research explores the dispersion of productivity across firms and establishments, the persistence of productivity differentials, the consequences of entry and exit, and the contribution of resource reallocation across firms to aggregate productivity growth. The research also reveals important factors correlated with productivity growth, such as managerial ability, technology use, human capital, and regulation. The more advanced literature in ...
Journal Article
The Bay Area economy: down but not out
After being the quintessential darling of the nation's economy, the San Francisco Bay Area has been battered by the information technology (IT) downturn; nearly one in ten jobs in the Bay Area has disappeared since the peak of late 2000, and half of those were in the IT sector. This Economic Letter explores the sources of the boom and bust in the Bay Area and puts the region's recent contraction in the context of the U.S. and other regional IT centers. This Letter also compares the current episode of weakness in the Bay Area to the long and deep recession in the Los Angeles area in the early ...
Journal Article
Summer reading: New research in applied microeconomics - conference summary
This Economic Letter summarizes several papers presented at the Federal Reserve Bank of San Francisco's Applied Microeconomics Summer Conference, held June 25-27, 2008. The papers are listed at the end and are available at http://www.frbsf.org/economics/conferences/0806/index.html ; The conference included papers on a number of topics, including analyses of the impacts of government programs and insights into the behavior of businesses. All the papers shared a common approach of applying detailed, microeconomic data to understand behavior and to distinguish causation from correlation.
Working Paper
Endogenous Skill Bias in Technology Adoption: City-Level Evidence from the IT Revolution
This paper focuses on the bi-directional interaction between technology adoption and labor market conditions. We examine cross-city differences in PC adoption, relative wages, and changes in relative wages over the period 1980-2000 to evaluate whether the patterns conform to the predictions of a neoclassical model of endogenous technology adoption. Our approach melds the literature on the effect of the relative supply of skilled labor on technology adoption to the often distinct literature on how technological change influences the relative demand for skilled labor. Our results support the ...
Journal Article
The boom and bust in information technology investment
The growth rate of business investment in information technology boomed in the 1990s and 2000 before plunging in 2001. This boom and bust raises some natural questions: what were the reasons for the accentuated swings in growth rates, and, more importantly, what do those reasons portend for the future of IT investment? Much of the increase in IT investment in the late 1990s appears to be attributable to falling prices of IT goods, which in turn is largely attributable to technological change. However, IT investment was much higher in 1999 and 2000 than a model would predict. Another reason ...
Working Paper
Consumer sentiment, the economy, and the news media
The news media affects consumers' perceptions of the economy through three channels. First, the news media conveys the latest economic data and the opinions of professionals to consumers. Second, consumers receive a signal about the economy through the tone and volume of economic reporting. Last, the greater the volume of news about the economy, the greater the likelihood that consumers will update their expectations about the economy. We find evidence that all three of these channels affect consumer sentiment. We derive measures of the tone and volume of economic reporting, building upon the ...