In the Regional Economist: Too Big to Fail, Inflation, the Gender Pay Gap and More

ST. LOUIS – A new issue of The Regional Economist, the Federal Reserve Bank of St. Louis’ quarterly review of regional, national and international economic issues of the day, has been posted online at https://www.stlouisfed.org/publications/regional-economist/july-2016.

The articles include:

President’s Message: The State of the Debate on “Too Big to Fail”: St. Louis Fed President James Bullard discusses several proposals aimed at addressing the issue of financial institutions that are “too big to fail.” He also shares some of his perspectives on the topic.

Neo-Fisherism: A Radical Idea or the Most Obvious Solution to the Low-Inflation Problem? Central banks around the world are struggling with inflation rates that are below their targets. According to conventional central banking wisdom, interest rate cuts should increase inflation, but that’s not working. Maybe—by Irving Fisher’s logic—increasing nominal interest rates increases inflation.

Gender Gap May Be Linked to Flexible and Irregular Hours:  The gender pay gap persists, even within occupations and even though women’s educational attainments are surpassing men’s. Is it because women tend to choose jobs with hours that are more irregular than those taken by men?

Which Persists More from Generation to Generation – Income or Wealth?  Are you likely to be in the same income situation as your parents? How about being in the same wealth category? Analyzing such intergenerational mobility can shed light on economic inequality and lead to better policy to deal with this issue.

Scale Matters: Community Banks and Compliance Costs: Research shows that complying with government regulations is more burdensome for smaller community banks than larger community banks. Despite spending proportionately more resources on compliance, the smaller banks do not perform as well as the larger ones, at least in one key metric.

Government Spending Might Not Create Jobs, Even during Recessions: A review of government spending over 120 years seems to show little, if any, impact on job creation. The result is the same whether the economy is in a recession or not.

Despite Weakness, Economic Expansion Marks Seven Years:  The U.S. economic expansion marked its seventh anniversary in June. Among the challenges to its continuation are low inflation and a slowdown in the growth of labor productivity.

District Households Buck the Trend on Debt: While at a national level households have decreased their debt substantially since the financial crisis, in the St. Louis Fed’s District household debt has remained constant. The evolution of house prices may be the key.

Health Care, Hospitality and Retirees Keep Hot Springs, Ark., Afloat: Although this small metropolitan statistical area has strong health care and tourism sectors, it also has its share of challenges: income inequality, no airport and Americans’ changing vacation patterns.

Ask an Economist: Recent college graduates have a higher chance of unemployment than their more experienced counterparts.  How could student loans be designed to mitigate this risk?  A St. Louis Fed economist responds.