Living beyond our means
Both the current account deficit and the federal fiscal deficit are symptoms of living beyond our means. In this essay, we first provide the basic conceptual background, starting with some elements of national income accounting. We show how the two deficits are related to each other, and how they may be affected by public policy and private actions that impact economic behavior. We then cover the facts about the two deficits--their magnitude and their recent history. Next comes the question of sustainability and the long term consequences of the deficits. We conclude with an overview of the ...
Trade and growth in New England
From the time when New England timber built the British navy and Salem boys sailed ginseng root to China and returned as wealthy men, New England?s growth has been tightly linked with international trade. The ties are no less compelling today. Trade raises living standards by promoting the efficient use of resources and encouraging the adoption of new technologies and productivity improvements. New England is a region that specializes in new technologies, a region with limited natural resources, and trade is essential to its future well-being. However, like technological change, increased ...
Reforming the U. S. health care system: where there's a will, there could be a way
The essay in the 2005 annual report summarizes the themes and consensus-based prescriptions for action that emerged from the Boston Fed's 50th economic conference, Wanting It All: The Challenge of Reforming the U.S. Health Care System, held in June 2005.
Re-balancing act : global imbalances in a changing world
The world has been confronting unusually large current account imbalances for so long now that international policy makers have almost stopped warning that these represent a major risk to the world economic outlook. This essay featured in the 2006 annual report summarizes presentations and discussion at the 51st economic conference of the Federal Reserve Bank of Boston, ?Global Imbalances - As Giants Evolve,? which was held in June 2006.
The outlook for New England banking
Resilience has historically characterized the New England region, and the past year has exemplified that long-standing quality. Coming out of the worst regional recession since the Great Depression has been slow and painful, and the lives of many of our neighbors have been disrupted along the way. Fortunately, by the end of 1992 there were signs that the economic decline in New England was nearing the bottom.
The procyclical application of bank capital requirements
Capital requirements have long been considered important to bank safety and the protection of the federal deposit insurance fund. But widespread banking problems and heavy losses to the deposit insurance fund have intensified the focus on capital. Supervisory agencies have become even more rigorous in applying and enforcing capital standards, imposing higher requirements on damaged banks. Furthermore, capital requirements have taken on greater significance as a result of a key provision of the recently enacted banking legislation, the Federal Deposit Insurance Corporation Improvement Act of ...
One view of what the future holds for New England
After a decade of truly remarkable growth, the New England economy has weakened. Employment fell in 1989 and the unemployment rate increased. Further weakening seems to have occurred in the early months of 1990. New England continues to compare favorably with the nation according to such common indicators as the unemployment rate and per capita income, but recent developments suggest that the region is returning to a more normal relationship with the rest of the country. This transition is proving to be quite painful for some sectors of the economy, resulting in a high degree of confusion and ...
Building communities: making a difference
One of the most vexing economic problems facing the United States has been the persistence of pockets of poverty in the midst of prosperity. The reasons for this are many and complex. Prominent among them are economic isolation in the case of rural areas, and language and cultural barriers in the case of many inner-city communities. Discrimination has played a role, but so too has simple ignorance. Resources and opportunities exist in these communities, but getting the recognition from market sources necessary to leverage these assets is difficult. For whatever reason, human and physical ...
Small steps in the right direction?: restructuring public education
When the term "knowledge-based economy" first entered popular discussion - sometime around the early 1980s - the focus was exclusively on scientific, technological, and business leadership. Only gradually did our society come to appreciate the pervasiveness of the knowledge-based economy. It affects not just the demand for high-level technical and entrepreneurial talent but, indeed, the job requirements for virtually all types of work. This growing realization has laid the foundation for broad-scale reforms of education in the United States and many other nations.