Search Results
Journal Article
Sentiment Analysis of the Fifth District Manufacturing and Service Surveys
This article uses basic text analytic techniques to examine the sentiment embodied in two surveys conducted by the Richmond Fed: the Manufacturing and Service Sector Surveys. Specifically, the article develops several sentiment indicators based on the comments provided by survey participants, contrasts the sentiment measures against responses to other survey questions, and analyzes the monthly evolution of the sentiment indicators during the period 2002-18. Two main conclusions emerge from the analysis. First, the indicators reflect reasonably well changes in economic sentiment along time. ...
Journal Article
The Rise and Decline of Petersburg, Va.
Early Virginians looked at Petersburg, with its location on the Appomattox River, as a town of economic vibrancy and promise. Incorporated in 1748 by the Virginia General Assembly, the town fulfilled that early promise and grew to become the commonwealth's third independent city in 1850. But turmoil as well as prosperity for Petersburg were ahead. {{p}} Throughout its 270 years, three factors have dominated Petersburg's economic history: tobacco, trade, and transportation. The city's early economic prominence was due to its tobacco plantations and warehouses as well as various mills powered ...
Journal Article
Land-Use Regulations: A View from the Fifth District
Land and housing can be costly in a city or region for a number of possible reasons. Places with recreational or cultural attractions or other amenities draw population so the demand for housing and, consequently, land is high in those areas. Prices could also be high at some locations if the supply of land is constrained by the geography. In some areas, however, the price of land is high as the result of heavy land-use regulations (LURs), which restrict the availability of houses.
Working Paper
Taxation, Compliance, and Clandestine Activities
We investigate the delicate balance policymakers have to strike between raising tax revenues for public good provision and controlling the distortionary effects of taxes on (i) tax evasion, (ii) total work hours, and (iii) the allocation of work hours to illegal activities. These distortions lower the constrained optimal tax rate and result in the under-provision of the public good. This under-provision problem is mitigated when surplus from the audit agency is seamlessly transferred to the taxing authorities. Extensions of the basic model incorporate agent heterogeneity and a more general ...
Working Paper
Learning About Consumer Uncertainty from Qualitative Surveys: As Uncertain As Ever
We study diffusion indices constructed from qualitative surveys to provide real-time assessments of various aspects of economic activity. In particular, we highlight the role of diffusion indices as estimates of change in a quasi extensive margin, and characterize their distribution, focusing on the uncertainty implied by both sampling and the polarization of participants' responses. Because qualitative tendency surveys generally cover multiple questions around a topic, a key aspect of this uncertainty concerns the coincidence of responses, or the degree to which polarization comoves, across ...
Briefing
Are Place-Based Policies a Boon for Everyone?
Despite the widespread implementation of locally targeted "place-based" interventions, their optimal design and effectiveness in addressing regional economic disparities remains open. Proponents argue that they can leverage powerful agglomeration economies and benefit underserved areas. Critics highlight potential pitfalls like inefficiency, gentrification and negative spillovers. Evaluating their effectiveness is challenging due to policy heterogeneity and data limitations, as existing evidence presents a mixed picture: Some programs seem to contribute to job creation and poverty reduction, ...
Journal Article
Using the Richmond Fed Manufacturing Survey to Gauge National and Regional Economic Conditions
We evaluate the Federal Reserve Bank of Richmond (FRBR) manufacturing survey and assess its contribution to explaining national and regional economic conditions. Specifically, we examine the predictive accuracy of a variety of static and dynamic models. The models include the composite diffusion index reported by the FRBR and other information readily available from the FRBR surveys but not currently employed in the calculation of the composite index. The paper concludes, first, that the diffusion indices currently reported perform reasonably well at explaining both the national and the ...
Briefing
Why Use a Diffusion Index?
Diffusion indexes are a useful way to summarize economic information from surveys because they are easy to understand and correlate well with economic activity over time. To use diffusion indexes most effectively as a measure of change, however, it is important that the extensive margin of the indicator in question explains more of the change in that indicator than the intensive margin. This article, and the papers described in it, can also be used to develop a confidence interval around any diffusion index.
Briefing
How Does Trade Policy Get Decided?
The interests of districts play a crucial role in trade policymaking. Districts with heterogenous political and economic preferences form coalitions and bargain in the legislature to reach an acceptable trade policy. Such complicated process has been overlooked in canonical political economy models of trade. Our work brings to focus the role districts play in the political process by proposing a model that aggregates heterogeneous district preferences into a national trade policy. The approach uncovers districts and sectors that are more influential in the political process and identifies ...
Briefing
Understanding Diffusion Indexes: Insights and Applications
Diffusion indexes (DIs) are statistics that offer timely glimpses into the state of the economy.1 Frequently constructed from responses to qualitative surveys, these indexes provide a snapshot of the direction and breadth of change in key economic variables.Typically, these surveys ask participants to report whether a specific variable — such as employment or business conditions — improved, declined or remained unchanged compared to a previous period. The responses are then aggregated to calculate a DI, often expressed as a percentage. A DI above a certain threshold — which varies ...