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Contact: Rachel Brown, Media Relations, 215-574-3840

Philadelphia, PA —The second quarterly issue of the Philadelphia Fed’s new Economic Insights examines lingering concerns regarding the housing market, the international sovereign bond market, and public pension balance sheets.

Homebuilding has been notoriously slow to bounce back after the Great Recession. Economists have been eager to trace the roots of this slow turnaround because the housing market is believed to have been a key drag on the overall economic recovery. In "Housing’s Role in the Slow Recovery" economic advisor and economist Burcu Eyigungor points out some unusual supply and demand factors that were at work during the historic boom and bust.

Global sovereign debt risk continues to rise, and as the world has witnessed several times in recent decades, the mere threat of sovereign default can be highly disruptive. Yet, the international system for dealing with this risk remains flawed, according to senior economic advisor and economist Satyajit Chatterjee. His article "Chapter 11 for Countries?" explains why it might be time to revive a debt restructuring proposal that the international community rejected in 2003.

Pennsylvania and New Jersey’s public pension systems are severely straining their state budgets, while Delaware's funds also carry shortfalls. State pension gaps matter to more than public-sector workers and retirees, as failing to accumulate enough money to make good on promised benefits can force states to raise taxes, cut programs, or both. In "Regional Spotlight: Pension Gap Perils" senior economic analyst Elif Sen examines whether assumed returns on pension fund investments project the full extent of the gaps.

Research Update summarizes recent working papers produced by Philadelphia Fed economists, analysts, and visiting scholars.

The Federal Reserve Bank of Philadelphia helps formulate and implement monetary policy, supervises banks and bank and savings and loan holding companies, and provides financial services to depository institutions and the federal government. It is one of the 12 regional Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Philadelphia Federal Reserve Bank serves eastern Pennsylvania, southern New Jersey, and Delaware.