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Journal Article
Summer reading: New research in applied microeconomics - conference summary
This Economic Letter summarizes several papers presented at the Federal Reserve Bank of San Francisco's Applied Microeconomics Summer Conference, held June 25-27, 2008. The papers are listed at the end and are available at http://www.frbsf.org/economics/conferences/0806/index.html ; The conference included papers on a number of topics, including analyses of the impacts of government programs and insights into the behavior of businesses. All the papers shared a common approach of applying detailed, microeconomic data to understand behavior and to distinguish causation from correlation.
Journal Article
Regional growth and resilience: evidence from urban IT centers
After being emblematic of the U.S. economic surge in the late 1990s, urban areas that specialize in information technology (IT) products struggled in the aftermath of the IT spending bust, with most experiencing deeper and longer periods of economic decline than the nation as a whole. Seven years later, most have recovered, but only a few have regained the prominence of earlier years. In this paper, we consider the rise, the fall, and the recovery of urban IT centers and distinguish between the factors leading to temporary gains and those contributing to a more lasting growth path. ...
Working Paper
Prices for local area network equipment
In this paper we examine quality-adjusted prices for local area network (LAN) equipment. Hedonic regressions are used to estimate price changes for the two largest classes of LAN equipment, routers and switches. A matched model was used for LAN cards and the prices for hubs were inferred by using an economic relationship to switches. Overall, we find that prices for the four groups of LAN equipment fell at a 17 percent annual rate between 1995 and 2000. These results stand in sharp contrast to the PPI for communications equipment that is nearly flat over the 1990s.
Journal Article
The boom and bust in information technology investment
The growth rate of business investment in information technology boomed in the 1990s and 2000 before plunging in 2001. This boom and bust raises some natural questions: what were the reasons for the accentuated swings in growth rates, and, more importantly, what do those reasons portend for the future of IT investment? Much of the increase in IT investment in the late 1990s appears to be attributable to falling prices of IT goods, which in turn is largely attributable to technological change. However, IT investment was much higher in 1999 and 2000 than a model would predict. Another reason ...
Journal Article
House prices and subprime mortgage delinquencies
In this Economic Letter, we explore how the pace of and change in house-price appreciation can affect the incentives and opportunities for borrowers in a market to avoid delinquencies and foreclosures. For instance, with likely gains in home equity in markets where house prices have risen significantly, a homeowner should have greater incentives and opportunities to keep a mortgage loan current. Indeed, we show that markets that recently experienced greater house-price appreciation tended to have lower delinquency rates and smaller increases in delinquency rates. We also find that ...
Working Paper
Subprime mortgage delinquency rates
We evaluate the importance of three different channels for explaining the recent performance of subprime mortgages. First, the riskiness of the subprime borrowing pool may have increased. Second, pockets of regional economic weakness may have helped push a larger proportion of subprime borrowers into delinquency. Third, for a variety of reasons, the recent history of local house price appreciation and the degree of house price deceleration may have affected delinquency rates on subprime mortgages. While we find a role for all three candidate explanations, patterns in recent house price ...
Working Paper
Consumer sentiment, the economy, and the news media
The news media affects consumers' perceptions of the economy through three channels. First, the news media conveys the latest economic data and the opinions of professionals to consumers. Second, consumers receive a signal about the economy through the tone and volume of economic reporting. Last, the greater the volume of news about the economy, the greater the likelihood that consumers will update their expectations about the economy. We find evidence that all three of these channels affect consumer sentiment. We derive measures of the tone and volume of economic reporting, building upon the ...
Journal Article
The Bay Area economy: down but not out
After being the quintessential darling of the nation's economy, the San Francisco Bay Area has been battered by the information technology (IT) downturn; nearly one in ten jobs in the Bay Area has disappeared since the peak of late 2000, and half of those were in the IT sector. This Economic Letter explores the sources of the boom and bust in the Bay Area and puts the region's recent contraction in the context of the U.S. and other regional IT centers. This Letter also compares the current episode of weakness in the Bay Area to the long and deep recession in the Los Angeles area in the early ...
Journal Article
The narrowing of the male-female wage gap
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. For example, some seek to explain why the gap narrowed so dramatically in the 1980s only to narrow much more slowly in subsequent years. Others have considered the role of new technology, which may have helped level the playing field between the sexes; this view recalls the rise of office work at the turn of the ...
Journal Article
The rise in homeownership
After decades of relative stability, the rate of U.S. homeownership began to surge in the mid-1990s, rising from 64% in 1994 to a peak of 69% in 2004, near which it has hovered ever since; this translates into 12 million more homeowners over the period. Understanding the forces behind such trends in homeownership is important not only because supporting homeownership has been an unequivocal public policy goal for decades but also because homes are an important part of people?s net worth and, therefore, can affect their spending, working, and saving decisions. ; In this Economic Letter, we ...