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Business Review

JANUARY/FEBRUARY 1998

The Downtown Parking Syndrome: How Does Curing the Illness Kill the Patient?

Richard Voith

Consumers and businesses alike cite the lack of free parking as one of the major problems associated with working, playing, and shopping downtown. A shortage of parking spaces can also lead to higher prices for those parking slots available as well as violation of parking ordinances by frustrated citizens. In light of widespread concerns about parking downtown, should large cities adopt policies to encourage more parking in a central business district (CBD), or should they improve public transit as an alternative to driving? Cities must consider many factors before answering such questions. Effective parking policies must strike a balance between convenient parking and maintenance of the dense urban fabric that makes the CBD unique.
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That Thing Venture Capitalists Do

Mitchell Berlin

Although many people know the term venture capital, not many people know precisely what role venture capitalists play in the economy. How do they identify entrepreneurs with promising new ideas? What kinds of services do they provide to these entrepreneurs? Mitchell Berlin answers these and other questions as he describes "that thing venture capitalists do."
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MARCH/APRIL 1998

Does Trade With Low-Wage Countries Hurt American Workers?

Stephen Golub

Does trade with low-wage countries steal American jobs and, hence, rob American workers of higher wages and a higher standard of living? Most economists think trade is not guilty as charged. Instead, they cite concepts such as comparative and absolute advantage and differences in productivity to explain why trade, particularly trade with low-wage countries, doesn't pack the economic wallop its critics claim. In this article, Steve Golub shows that popular fears are based on a misunderstanding of the causes and effects of wage disparities.
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Has Globalization Created a Borderless World?

Janet Ceglowski

Globalization. The word often conjures up an image of a worldwide society — no boundaries, no borders, no barriers. Economically speaking, in a truly borderless world, financial capital, production activities, and labor would flow as easily between countries as they do within a country. But is this picture of an economic "global village" accurate? Not quite, according to Janet Ceglowski. In this article, she explains why, despite the expansion of international economic activity in recent years, we haven't yet achieved a barrier-free world.
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MAY/JUNE 1998

The Retail Revolution and Food-Price Mismeasurement

Leonard I. Nakamura

If a product sells for $3 this week at the local supermarket and $2 next week, what is the "real" price? What if that same product has a different price at a different store? Thanks to scanner technology, food prices differ a lot these days because they can be changed quickly and easily. How do our official statistics take these price movements into account? Not too well, according to Leonard Nakamura. In this article, he describes the retail revolution of recent years and how it has led to mismeasurement of food prices.
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Restructuring During Recession: The Silver Lining in the Cloud?

Keith Sill

Recessions usually mean bad times for many workers and firms: companies close; jobs are lost. However, recessions can present certain opportunities for organizations. For example, restructuring can be less costly during a recession: workers can be retrained and machines upgraded. In turn, these actions position a company to take advantage of the next economic upturn. In this article, Keith Sill discusses the "creative destruction" that takes place during recessions and outlines some of the policy implications of restructuring.
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JULY/AUGUST 1998

Trends in Metropolitan Employment Growth

Gerald A. Carlino

In the early part of this century, both employment and population tended to concentrate in large metropolitan areas such as New York. Over the past 40 years, however, jobs and people have spread out as both firms and workers have sought the lower costs of smaller, less congested places. In fact, Jerry Carlino argues that "congestion costs" — traffic, pollution, and a higher cost of living — are a major factor in the relatively slower growth of large metropolitan areas in the second half of the century.
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Low Inflation: The Surprise of the 1990s

Dean Croushore

For most of the 1990s, forecasters have been predicting an upturn in inflation. Yet, over that same period, the United States has experienced stable or declining inflation. Why have forecasts been at odds with reality? And why does it matter? In this article, Dean Croushore considers some answers to these questions and explains why inflation is the economic surprise of the decade.
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SEPTEMBER/OCTOBER 1998

House Prices and the Quality of Public Schools: What Are We Buying?

Theodore M. Crone

Do house prices reflect the quality of the local public schools? To what extent do school district policies determine how well students perform? How do such factors as neighborhood, family, and peers affect school quality and house prices? Ted Crone examines these questions, and others, to determine whether house prices do, indeed, include a school premium.
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What's Happening in Manufacturing: “Survey Says…”

Michael E. Trebing

In recent years, the Philadelphia Fed’s Business Outlook Survey (BOS) has received a great deal of attention from financial journalists and market participants. The monthly survey gathers information from manufacturers in the Third Federal Reserve District about current conditions at their plants and their expectations for the future. In this article, Mike Trebing evaluates whether the survey provides new information on short-term changes in the regional and national manufacturing sectors.
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November/December 1998

Is the Fed Being Swept Out of (Monetary) Control?

Jeffrey M. Wrase

What are "reserves," and why do banks hold them? What are "sweep accounts," and how do they work? What’s the relationship between the two? And what’s the Fed’s role in all of this? In this article, Jeff Wrase considers the effect sweep accounts have had on the market for bank reserves and on the Fed’s job of managing reserves in the banking system. He also looks at changes the Federal Reserve has made to keep the federal funds rate from becoming too volatile as the use of sweep accounts spreads.
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Why Is Europe Forming a Monetary Union?

Gwen Eudey

On January 1, 1999, 11 European countries will officially become a monetary union with one currency, the euro. Forming a monetary union brings benefits, such as increased trade between countries. But it carries costs as well. To join the union, each country must cede its right to set individual monetary and exchange-rate policies. Yet each country’s economic situation may differ from that of its fellow union members. How will these countries--and the union--fare when economic shocks hit, especially shocks that affect one country or region more than another? In this article, Gwen Eudey weighs the benefits and costs of European monetary union and discusses some of the issues involved.
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