Economic Letter
Brief summaries of SF Fed economic research that explain in reader-friendly terms what our work means for the people we serve.
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How Will a Credit Crunch Affect Small Business Finance?
Gregory F. Udell
There is considerable concern about the duration and severity of the credit crunch caused by the current financial crisis. Some evidence indicates that this could become one of the worst credit crunches in recent history.
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Tax Credits for Job Creation and Retention: What Can We Learn from the States?
Daniel J. Wilson and Charles Notzon
During the current recession, the economy has lost about 3.6 million jobs. In January, the nation’s unemployment rate hit 7.6%, and forecasters expect further job losses and higher unemployment rates in the months ahead. In order to boost the economy and stem job losses, Congress has just approved a substantial fiscal stimulus package, and further measures may well be introduced in the future. One measure not included in the package is a temporary federal tax credit for businesses that create jobs in the United States. But such a provision was part of the original plan proposed by the Obama transition team before the president took office and is often cited as a potential addition to the federal government’s arsenal of tax incentives.
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Out-of-Market Small Business Loans
Liz Laderman
Small businesses play a critical role in the U.S. economy, accounting for roughly half of all private employment and more than half of output, according to the U.S. Small Business Administration. Small businesses need financing to operate and grow, and bank lending is an important source of this financing.
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House Prices and Bank Loan Performance
John Krainer
The current financial crisis in the United States has its roots in falling real estate values. Indeed, a number of studies have shown a strong link between house price depreciation and defaults on residential mortgages (Doms, Furlong, and Krainer 2007).
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Labor Supply Responses to Changes in Wealth and Credit
Mary C. Daly
Recent declines in house prices and the stock market have led to the most substantial contraction in household wealth since the Great Depression. From the third quarter of 2007 through the third quarter of 2008, household wealth shrank by $6.7 trillion (Federal Reserve Board of Governors 2008).
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Behavior of Libor in the Current Financial Crisis
Simon Kwan
One of the key features of the financial turmoil of the past year has been the credit crunch. For borrowing of many kinds, terms are tougher and interest rates are higher, reflecting skyrocketing risk premiums.
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The Tech Pulse Index: Recent Trends in Tech-Sector Activity
Bart Hobijn
This Economic Letter introduces the new Tech Pulse Index, a measure that tracks economic activity in the U.S. information technology (IT) sector. The index first appeared under the sponsorship of the Federal Reserve Bank of New York; due to substantial revisions of the econometric model and source data used in the current version, it is not directly comparable to versions released by the New York Fed before August 2008.
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U.S. Monetary Policy Objectives in the Short and Long Run
Janet L. Yellen
This Economic Letter is adapted from a speech delivered by Janet L. Yellen, president and CEO of the Federal Reserve Bank of San Francisco, on January 4, 2009, to the Andrew Brimmer Policy Forum during the IBEFA/ASSA meeting held in San Francisco.
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Economic Conditions in Korea and Japan: A Monetary Policymaker’s Report
Janet L. Yellen
Each year, the President of the San Francisco Fed joins the Federal Reserve Board Governor responsible for liaison with Asia on a “fact-finding” trip to the region. These trips advance the Bank’s broad objectives of serving as a repository of expertise on economic, banking, and financial issues relating to the Pacific Basin and of building ties with policymakers and economic officials there.
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Convergence of Long-Term Bond Yields in the Euro Area
Eric T. Swanson
Following years of negotiations involving over a dozen European nations, the Maastricht treaty was signed on February 7, 1992, and established the terms and basic timeline for European Economic and Monetary Union (EMU). Despite some bumps along the way, such as the exchange rate mechanism (ERM) crisis in September 1992, the monetary union went ahead largely according to schedule.