Economic Letter

According to several measures, the difference in wages between men and women, the so-called “male-female wage gap” (MFWG), has shrunk substantially–by about half–over the past several decades. This phenomenon has been the subject of much research, speculation, and contention.

While credit unions have been able to convert their charters more easily since the late 1990s, two conversions of very large credit unions–over $1 billion in assets each–in 2006 have put the issue on the front burner for the industry. This Economic Letter outlines some costs and benefits to their member-owners of credit unions’ converting to stock thrifts and describes one way to reform the process in order to spread the benefits of conversion more broadly to credit union members.

Today the Federal Open Market Committee is a good deal more transparent about its policy actions and deliberations than it was only 15 years ago.

The recent sharp increase in subprime mortgage delinquencies has captured the public spotlight and led analysts to search for the factors that are likely to have contributed to the problem. These factors commonly include the lack of income documentation, high loan-to-income ratios, the lowering of credit standards, and the resets on adjustable-rate loans, to name but a few.

In recent years, the U.S. economy has expanded at a healthy pace, employment has grown substantially, and the unemployment rate has dropped to very low levels. Despite these favorable trends, some recent news stories have emphasized worker anxiety and uncertainty about their job stability and security, reinvigorating a theme that gained substantial prominence in the mid-1990s.

This Economic Letter summarizes the papers presented at a conference on “Monetary Policy, Transparency, and Credibility” held at the Federal Reserve Bank of San Francisco on March 23 and 24, 2007. The papers are listed at the end and are available online.

The U.S. bank supervisory agencies recently issued for public comment revised guidance regarding the implementation of the proposed Basel II-related, risk-based capital requirements. Among the revisions is an important update to guidance regarding operational risk management.

The European Central Bank (ECB) and the Federal Reserve share a similar goal, price stability, and their strategies to pursue their goals are similar–with one notable difference. When considering long-term risks to price stability, the ECB places an explicit emphasis on the link between prices and measures of the money supply (also known as monetary aggregates); the Federal Reserve System, in contrast, does not specifically emphasize monetary aggregates.

Strong productivity growth is essential for improving living standards and can have an important impact on economic policy, yet economists are far from being experts at predicting when the trend of productivity growth might shift. In the 1960s, productivity growth boomed, growing at an average annual rate of 2-1/2%. It weakened in the early 1970s, and for the next two decades or so averaged an annual growth rate of only about 1-1/4%.

On March 14, the Bureau of Economic Analysis reported that the U.S. current account deficit for 2006 increased from the previous year to over 6% of GDP. This deficit reflects the difference between U.S. income and expenditures, and the additional indebtedness that the country needs to take on to cover this difference.