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 and Why Does Age at Kindergarten Entry Matter?
Elizabeth Cascio
Those who have spent time in a kindergarten classroom know that there are remarkable differences in children’s skills. Research has shown that these skill differences are strongly tied to age, with students who enter kindergarten later in life doing better than younger entrants.
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Unanchored Expectations? Interpreting the Evidence from Inflation Surveys
Wayne Huang and Bharat Trehan
Recent surveys have shown that households are expecting higher inflation in the future. These readings, coming at the same time as surging commodity prices, have raised concerns that inflation expectations are no longer well-anchored and that the Fed has lost credibility.
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Can Young Americans Compete in a Global Economy?
Elizabeth Cascio
Young Americans entering the labor market today face substantial competition. Employers can look all over the world for workers with the skills to meet their firms’ needs.
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Monetary Policy and Asset Markets: Conference Summary
Richard Dennis
This Economic Letter summarizes the papers presented at a conference on “Monetary Policy and Asset Markets” held at the Federal Reserve Bank of San Francisco on February 22, 2008. The papers are listed at the end and are available online.
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Research on the Effects of Fiscal Stimulus: Symposium Summary
Dan Wilson
This Economic Letter summarizes the presentations at a symposium held at the Federal Reserve Bank of San Francisco on May 9, 2008, sponsored by the Bank’s Center for the Study of Innovation and Productivity (CSIP). Presentations are listed at the end, and three of the four are available online.
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Consumer Sentiment and Consumer Spending
James A. Wilcox
In the U.S. economy, two-thirds of production and expenditures are devoted to consumer spending, or personal consumption expenditures (PCE), which include most of retail sales, as well as households’ expenditures on such items as rent, utilities, and much of medical care. Because this is such a large sector of the economy, the forecast accuracy of PCE affects the forecast accuracy of some of the key variables that policymakers focus on, such as unemployment, incomes, inflation, and interest rates.
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Speculative Bubbles and Overreaction to Technological Innovation
Kevin J. Lansing
The magnitude of short-term movements in asset prices remains a challenge to explain within a framework of rational, efficient markets. Numerous empirical studies have shown that stock prices appear to exhibit “excess volatility,” that is, prices move too much to be explained by changes in the underlying fundamentals, such as dividends or cash flows.
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Did Large Recalls of Chinese Consumer Goods Lower U.S. Imports from China?
Christopher Candelaria and Galina Hale
In the latter half of 2007, the media were full of stories about recalls of consumer goods produced in China, with the majority related to high concentrations of lead used in the paint for toys. The volumes and the values of the affected goods were large; for example, the value of toy industry recalls totaled almost 20% of the overall monthly import of toys and related products from China.
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Retirement Savings and Decision Errors: Lessons from Behavioral Economics
Mary C. Daly
Long gone are the days when most American workers could rely on their employers to manage their retirement savings. Today, most people handle their retirement portfolios themselves, gaining the right and responsibility to determine their own best strategies.
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Small Business Lending and Bank Competition
Liz Laderman
Small businesses are a vital part of the fabric of the U.S. economy—according to the Small Business Administration, small businesses employ roughly half of the nation’s workers. So the question of how much bank financing small businesses are able to obtain is of real importance.