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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International Financial Integration and the Current Account Balance
Michele Cavallo
For several years, the U.S. has had a large and growing deficit in its current account, the broadest measure of the country’s trade with the rest of the world. While in 1991 the current account was roughly in balance, at the end of 2005 it reached a deficit of 7% of GDP.
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Monetary Policy in a Global Environment
Janet L. Yellen
This Economic Letter is adapted from remarks by Janet L. Yellen, President and CEO of the Federal Reserve Bank of San Francisco, delivered at the conference, “The Euro and the Dollar in a Globalized Economy” at the University of California, Santa Cruz on May 27, 2006.
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Central Bank Capital, Financial Strength, and the Bank of Japan
Thomas F. Cargill
Central bank balance sheets and capital structure in the context of legal independence, transparency, and flexibility to pursue price stability have increasingly been recognized as important issues in the optimal design of central banks. However, capital structure is more complex than a set of accounting conventions designed to organize central bank operations.
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Bank Diversification, Economic Diversification?
Philip E. Strahan
Business cycle volatility has fallen in the United States during the past two decades. Trehan (2005) explains some of the possible mechanisms behind our now more stable economy.
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Prospects for the Economy
Janet L. Yellen
This Economic Letter is adapted from remarks by Janet L. Yellen, President and CEO of the Federal Reserve Bank of San Francisco, delivered to the Bay Area Council 2006 Outlook Conference in San Jose, California, on April 18, 2006.
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Job Matching: Evidence from the Beveridge Curve
Rob Valletta and Jaclyn Hodges
Conditions in labor markets are largely reflected in the number of jobs employers want to fill (job vacancies) and the number of people seeking jobs (the unemployed). Over the business cycle, for example, job vacancy rates and unemployment rates generally exhibit negative co-movement, with high vacancies and low unemployment when the economy is growing and vice versa when the economy is contracting.
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Security Analysts and Regulatory Reform
Robert Marquez
Just a few years ago, Wall Street was rocked by scandals about conflicts of interest involving stock analysts’ reports. In response, the U.S. Securities and Exchange Commission (SEC) undertook investigations and filed a number of complaints against some major securities firms and analysts.
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What Is the Federal Reserve Banks’ Imputed Cost of Equity Capital?
Michelle L. Barnes and Jose A. Lopez
The Federal Reserve System is an important participant in the nation’s payments system, which is the infrastructure used for transmitting and settling payments between individuals, firms, and government entities. For example, as reported in the Federal Reserve System’s 2004 annual report, the twelve Federal Reserve Banks processed about 16 billion checks, or about 45%, of the 37 billion checks written in 2003.
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Enhancing Fed Credibility
Janet L. Yellen
This Economic Letter is adapted from remarks by Janet L. Yellen, President and CEO of the Federal Reserve Bank of San Francisco, delivered to the Annual Washington Policy Conference sponsored by the National Association for Business Economics (NABE) in Washington, D.C., on March 13, 2006.
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External Imbalances and Adjustment in the Pacific Basin: Conference Summary
Reuven Glick and Mark Spiegel
This Economic Letter summarizes the papers presented at the conference on “External Imbalances and Adjustment in the Pacific Basin” held at the Federal Reserve Bank of San Francisco on September 22-23, 2005, under the sponsorship of the Bank’s Center for Pacific Basin Studies.