Federal Reserve Bank
of San Francisco Federal Reserve Bank
of San Francisco

Economic Letter

Brief summaries of SF Fed economic research that explain in reader-friendly terms what our work means for the people we serve.

  • Sovereign Wealth Funds: Stumbling Blocks or Stepping Stones to Financial Globalization?

    2007-38

    Joshua Aizenman and Reuven Glick

    Sovereign wealth funds (SWFs) are saving funds controlled by sovereign governments that hold and manage foreign assets. Private analysts put current sovereign wealth fund assets in the range of $1.5 to 2.5 trillion.

  • The U.S. Economy and Monetary Policy

    2007-36-37

    Janet L. Yellen

    This Economic Letter is adapted from a speech by Janet L. Yellen, president and chief executive officer of the Federal Reserve Bank of San Francisco, to the Seattle Community Development Roundtable and the Seattle Chamber of Commerce Board of Trustees in Seattle, Washington, on December 3, 2007.

  • Fixing the New Keynesian Phillips Curve

    2007-35

    Richard Dennis

    Price rigidity is a key mechanism through which monetary policy is thought to affect the economy. When some prices are hard to change, firms may respond to a monetary impetus by changing instead their production and employment levels.

  • Financial Globalization and Monetary Policy

    2007-34

    Mark M. Spiegel

    This Economic Letter is adapted from a speech by Mark Spiegel, Vice President and Director of the Center for Pacific Basin Studies, delivered at the Bank of Korea’s 15th annual Central Banking Seminar, “Increasing Capital Flows among Countries and Monetary Policy,” in Seoul, Republic of Korea, September 18-21, 2007.

  • Labor Force Participation and the Prospects for U.S. Growth

    2007-33

    Mary C. Daly

    Growth in the labor force is one of two key determinants of the nation’s maximum sustainable, or potential, rate of economic expansion. For more than five decades, a growing labor force provided a sizeable boost to the potential rate of expansion in the U.S. economy.

  • Asset Price Bubbles

    2007-32

    Kevin J. Lansing

    Speculative bubbles have occurred throughout history in numerous countries and asset markets. The term “bubble” was coined in England in 1720 following the famous price run-up and crash of shares in the South Sea Company.

  • Corporate Access to External Financing

    2007-31

    Jose A. Lopez

    Access to external finance, such as bank loans or trade credit, is a key determinant of a firm’s ability to develop, operate, and expand. Economic researchers have studied how various macroeconomic and microeconomic factors influence such access; for example, it has been shown to depend on the macroeconomic environment, since economic downturns tend to limit firms’ ability to borrow and banks’ willingness to lend.

  • Relative Comparisons and Economics: Empirical Evidence

    2007-30

    Mary C. Daly

    For most people, the idea that individuals compare themselves to others in determining their own utility, that is, their sense of happiness or well-being, rings true. Memories from the school yard, the neighborhood, and the workplace support the notion that we care both about our own accomplishments and how they stack up against those of others.

  • Internal Risk Models and the Estimation of Default Probabilities

    2007-29

    Jens Christensen

    A major advancement in risk management among large financial institutions has been the development of internal risk models. The models encompass institutions’ procedures and techniques for assessing portfolio risk.

  • Changes in Income Inequality across the U.S.

    2007-28

    Tali Regev and Daniel Wilson

    Over the past four decades, overall income inequality has increased in the U.S. One particularly striking feature of the data is that the income gap has widened most between the top and the middle of the distribution, while it has remained relatively stable between the middle and the bottom.