For release: June 30, 2006

Contact:	Charles Henderson
	Office:	(314) 444-8311
	E-mail:	charles.b.henderson@stls.frb.org
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St. Louis Fed’s The Regional Economist: Wealth Gains Don't Offset Decline in Saving; Inflation's Economic Cost: How Large? How Certain?; Families Digging Deeper in Debt; District Economic Profiles: Memphis and Louisville Zones; Community Profile: Dyersburg, Tenn.

ST. LOUIS, Mo. — The July edition of The Regional Economist, the Federal Reserve Bank of St. Louis’ quarterly publication of economic and business issues, features the following articles. (The publication is also available on the Bank’s web site.)

• "Wealth Gains Don't Offset Decline in Saving." Statistics indicate that household wealth is rising, but U.S. households are saving less and less. Economist William R. Emmons analyzes household asset values and finds that conventional measures are both misleading and incomplete, giving a false sense of future security. He concludes that most Americans aren't putting enough money away to ensure the rising standard of living to which we've all become accustomed.
• "Inflation's Economic Cost: How Large? How Certain?" For central bankers, the cornerstone of monetary policy is the belief that low inflation leads to sustainable economic growth. The evidence about the costs of inflation, however, is not as clear-cut as this belief. Economist Richard G. Anderson explores the evidence that sustained inflation reduces output growth. He concludes that while there is uncertainty regarding rapid inflation, central bankers generally agree that sustained low inflation is a prerequisite to sustaining the public's confidence in their policymakers—and, hence, to achieving maximum, long-run growth.
• "Families Digging Deeper into Debt." The Federal Reserve's latest Survey of Consumer Finances found that median household debt rose almost 34 percent between 2001 and 2004. Net worth during the same period, however, rose just 1.5 percent. Economist Kevin L. Kliesen finds that these results are consistent with previous surveys, and that nearly half of all families did not save any portion of their income over the previous year—which is expected to become a serious liability for those families.
• "District Overview: Memphis and Louisville Zones" In Memphis, the professional and business services sector is boosting the post-recession recovery. In the Louisville zone, Bowling Green and Elizabethtown have seen considerable job growth since 2001, while Evansville and Owensboro haven't fared as well.
• "Community Profile: Dyersburg, Tenn." The extension of the so-called NAFTA highway to this western Tennessee city is expected to bring more traffic and money, while city officials are also optimistic about the construction of a port nearby on the Mississippi River.

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